"Tax havens, banking secrecy, that's all over," said French President Nicolas Sarkozy on the eve of the G-20 meeting in Pittsburgh on September 24-25. Well, it's not over yet. One of the key tools for combating tax haven abuses is supposed to be an effective exchange of information. The G-20 countries, at their April 2009 meeting, declared that countries that refuse to meet the international standard for effective information exchange would be blacklisted and subject to sanctions. So far, the blacklist has been a sad joke. The OECD also has a gray list, and that list is also a joke.

Instead of promoting an effective exchange of information, the OECD and leading G-20 countries treat the OECD's discredited 2002 model tax information exchange agreement as the international standard for transparency and cooperation. The view is widely held that the OECD [Tax Information Exchange Agreement] TIEA is ineffective -- not nothing, but not much. Tax haven countries that agree to this ineffective TIEA are provided with an undeserved patina of respectability. They have been eager to sign up, and most have done so.

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President Sarkozy was premature, at best, in announcing the end of tax haven abuses and bank secrecy. As noted above, the OECD efforts at getting countries to sign information exchange agreements based on its model TIEA is a sideshow, even a charade. With all these illusory TIEAs being signed with great fanfare, some may fear that we are seeing the end of the reform movement rather than the beginning.

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I am encouraged by the action of the French banks, under pressure from their government, to close their branches located in noncomplying countries. Sure, the French banks are not major players in those locations. At a minimum, nevertheless, it is important symbolism. Also encouraging is the initiative of the Cayman Islands to offer automatic exchange of information to selected countries. And there are some encouraging signals coming out of the U.S. Congress. The Stop Tax Haven Abuse Act, recently introduced by Sen. Levin to pay some of the costs of healthcare reform, contains a grab bag of provisions that would give the IRS better tools to combat offshore tax evasion.

The next step in the campaign against international tax evasion is for the responsible elements in the international tax community to push for effective information exchange.

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We all should understand that the trillion dollar business of tax evasion is going to have a lot of vocal defenders. No one should imagine that controlling tax abuses will be easy. Right now, however, the momentum is with the tax reformers and not with the tax cheats and their enablers.

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