Sarkozy, Brown Look to Crack Down on Tax Havens

EVIAN, France – The leaders of France and Britain pushed Monday for ambitious targets for tackling climate change and cracking down on uncooperative tax havens, ahead of upcoming meetings with other heads of state this week and in September.

The two leaders showed little sign of headway, however, on a stalled European military cargo plane project. The French and British immigration ministers did sign an agreement aimed at reinforcing joint measures to clamp down on the illegal flow of immigrants crossing the English Channel from France to Britain.

British Prime Minister Gordon Brown said he and French President Nicolas Sarkozy agreed at a summit in this Alpine resort to call for a March 2010 deadline for sanctions against tax havens that fail to bring their transparency up to international standards.

"The world should be in no doubt that the writing is on the wall for tax havens," Brown said. "Tax transparency, full exchange of tax information and reducing tax avoidance are crucial for the health of the global economy," Brown said.

Sanctions under consideration include cutting investment, imposing taxes on funds held in tax havens, and the withdrawal of aid, Brown said.

Neither leader named specific tax havens. The Organization for Economic Cooperation and Development has named several countries, including Switzerland and Liechtenstein, on a so-called "gray list" of tax havens that have yet to implement commitments to accept new information-exchange standards.

Sarkozy and a half-dozen government ministers met with Brown and their counterparts just two days before they join world leaders from the United States, Russia, Germany, Italy, Japan and Canada for a Group of Eight summit in L'Aquila, Italy.

The two men discussed their G-8 strategies and a September meeting in Pittsburgh of the Group of 20 developed and developing countries. Sarkozy said he and Brown would insist on tangible, timely results at the G-20.

"We won't be satisfied with very long-term goals," Sarkozy said, "we want Pittsburgh's targets to be as ambitious" as those set out at April's G-20 meeting in London, Sarkozy said.

Sarkozy and Brown spent much of their approximately 90-minute meeting discussing efforts to combat climate change, including so-called carbon taxes on goods from heavily polluting companies, Brown said.

Both leaders called for progress on the issue ahead of a December climate change conference in Copenhagen, where the United Nations aims to conclude a new, worldwide climate pact.

"I don't want the world to be set back at Copenhagen," Brown said. "The failure to reach agreement there will be seen as a huge blow to the environmental movement and to the ability of the world to work together on other issues."

The overall aim of the treaty is to cut greenhouse gas emissions by between 25 and 40 percent from 1990 levels starting in 2012.

The 27-nation European Union already has agreed to reduce CO2 emissions by 20 percent of 1990 levels by 2020 — a number that could be increased to 30 percent if other countries sign on.

Sarkozy and Brown also called for talks with oil producing countries on ways to reduce the volatility of oil prices, which plunged from around $147 a barrel last July to $32 late last year, then to $73 last week.

"The most important commodity the world needs is one of the most volatile and unstable," Brown said. "We have to look at how we can change this."

The leaders agreed that G-8 and G-20 leaders "have got to take seriously some of the warning signals that exist in the world economy," and finish reforms that were agreed at the last G-20 meeting in London, Brown said.

"We have to increase bank lending, and both of us are worried that banks have yet to respond in full to the situation we have where industries and sectors are calling for help from the banks," Brown added.

The two immigration ministers signed an agreement that called for a security zone near the French port of Calais — where immigrants have clustered seeking to cross into Britain — stronger border controls and a "global humanitarian scheme" for asylum seekers.

Neither leader said much about their talks on Europe's long-delayed and loss-making A400M military transport plane.

In a joint statement released later, the two leaders said they are "committed to finding a positive outcome for the renegotiation of the A400M program."

Airbus and parent company EADS, which are developing the aircraft, must "bear the consequences of the program delays and contribute to compensating for the resulting capability deficit," according to the statement.

The A400M transporter program was launched in 2003 with an order for 180 planes from seven governments — Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey.

But the manufacturer, European aerospace giant EADS, missed a March 31 contractual deadline for the first flight, and it could have to repay as much as euro5.7 billion ($8 billion) to governments if the project were canceled.