A few stories over the last few months have forced me to think again about whether OECD was right to admit Russia to the OECD and whether BIAC was right to support this proposal. I always felt uncomfortable about the process at the time, but the argument put forward was that a Russia within the OECD was more likely to adhere to international standards than a Russia outside. I realise that Russia has been sent to the OECD “sin bin” for a period of time, but unfortunately I think we are seeing that Russia isn’t very good at adhering to international standards and doesn’t respond to appeasement very much at all. This poses the question as to whether there are some countries who do not want to participate in an international concensus and for whom their own viewpoint is paramount. A good example is Argentina, which is in the process of defaulting on its debts for a second time in a very short period of time and has gold model position as the country with the most disputes about natural resource ownership (based on Chatham House research). Lest we forget Argentina is not a member of OECD, but both Russia and Argentina are members of the G20 who have a larger role in global tax policy now.
But returning to Russia, we are all aware of the tragic shooting down of MH17 by Russian military hardware and the participation in operations within Ukraine. In addition, Russia has aggressively challenged the decision in The Hague concerning compensation for Yukos shareholders after it’s expropriation.
When we were considering Russia’s application to join OECD , it was expected that this would increase the observance of the law. What is happening doesn’t look that way, in fact things appear to be getting worse. If I’m right then we did make a mistake and we need to think about what we do about that mistake – and learn from that mistake in future decisions.