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Mauritius Banking Act 2004 integration of onshore and offshore banking licences provides for greater confidentiality on client information, such that any request under POCA [Prevention of Corruption Act 2002], or under Financial Development Services Act 2001, or under the United Revenue Act will require formal applications to a Judge in Chambers. Prior to Promulgation in October 2004, I had intervened as Chief Economist of the Barclays Group, on behalf of the Mauritius Bankers Association Chairman, on matters of substance pertaining to regulatory loopholes and consistency in banking guidelines deemed to be within the spirit of the Act. The Seal of enhanced Confidentiality and Lifting of Corporate Veil to establish Economic Substance in 'offshore' global business operations were bound to become an uneasy thorn in our international economic diplomacy. Tax Information Exchange Agreements (TIEA), signed by Mauritius, effectively removed our Jurisdiction off the potential "grey list" of offshore tax havens listed by the Organization for Economic Cooperation and Development. The upcoming Global Forum on Transparency and Information Exchange [Mexico, September 2012] will create a new organization to oversee the progress of Tax Information Exchange Agreements. The Forum guides the OECD's work in the area of tax evasion. The postponement of India's GAAR (General Anti-Avoidance Rules to counter aggressive tax avoidance practices via overseas jurisdictions) hails an opportune moment for Mauritius to seize the economic diplomacy window and query offshore policy fundamentals. GAAR is a watershed opportunity to sanitise the World Investment image of Mauritius in the global business sector. GAAR Provisions conceptually plugs the loopholes within our Tax Jurisdiction, and performs the due diligence role relinquished by the Financial Services Commission [FSC], and other regulatory and tax authorities of Mauritius. GAAR highlights the hazy status prevailing in our Treaty Shopping image, and the ensuing opacity in our international economic diplomacy since 1995. Notwithstanding the application timing of GAAR, who will bear the responsibility of a rigorous assessment and a formal regulatory ruling pertaining to the adequacy of commercial and economic substance of a Third Party seeking the cloak of a TRC [Tax Residency Certificate]? Has the FSC relinquished its prerogative to establish a comprehensive list of all Global Business transactions which could be legally construed as colourable devices [a dubious method or subterfuge clothed with apparent dignity] as per the Mc Dowell ruling? Is it not an opportune moment for FSC Mauritius to upgrade its own operational standards to internalise the core essence of GAAR, without duress or undue external diplomatic pressure? GAAR should not be viewed as an obstacle to be circumvented, but a Global Business Policy Tool to be rendered statutory within the FSC Regulatory Framework in a bid to cleanse the opacity and apparent breach of international confidence in the sanctity of our TRC status. Prime Minister Ramgoolam letter to India's PM Manmohansingh creates more mistrust in the Offshore quagmire. Why does Prime Minister Ramgoolam display such eagerness to urge a forgiveness of all Tax Residency Certification beneficiaries prior to GAAR's potential implementation? The Government of Mauritius had a clear responsibility since 2006 which hailed the diplomatic exasperation of our staunchest ally on the World stage - Mother India. India tags our Government's 'unwillingness' to carve a path to thwart Treaty Shopping and global business transactions devoid of economic substance. The Government of Mauritius has a duty of care towards the international economic community to issue an unambiguous Policy Statement to FIIs [Foreign Institutional Investors] using the shield of our TRC status, that Treaty Shopping shall be deemed not to be conducive to our Special Relationship Status with India. India hinted that no relief would apply to Vodafone-type overseas deals involving Capital Gains Tax on sale of domestic assets, whereby proposed retrospective changes to Income Tax Act would apply. Finance Minister Duval may bring soft pressure to bear on local auditing firms whose Partners are local Directors of hundreds of Global Business Companies with Mauritius TRCs. Thus it is most feasible for these Auditors, bound by UK Chartered Accountancy Codes of Practice, to disclose to FSC Mauritius the nature of those TRC beneficiaries who may be deemed to lack commercial and economic substance. Goodwill and Good Faith, in lieu of GAAR Legislation from India, will ventilate a new phase in our international economic diplomacy. The Government's failure since 2010 to launch a goodwill-based credible economic diplomacy with India, and the diplomatic faux pas of Finance Minister Duval's absence in the Government Mission to India led by PM Ramgoolam speaks volumes as to our lack of synchronicity and calibration of our international economic diplomacy and our national economic development program. Foreign Minister Boolell should have been in the front line of staunch lobbying preceding GAAR Legislation proposals in April 2012. Has our economic diplomacy been outsourced to Global Investor Forums with no mandate from Government, thereby operating ultra vires with respect to speaking with a 'coherent single voice' to Indian Authorities? The last gasp lobbying attempt by non-specialist Investor Forums in lieu of technocratic void in our Diplomatic Mission in India and the non-existent role given to Finance Minister Duval in India by Prime Minister Ramgoolam, do not seal our case in the right direction. The serious concern of India regarding the shortfall in Tax receipts from Global Business platforms and the impact on its development strategies and equitable share of global transactions may not be casually underestimated by our Policymakers and economic diplomacy strategists. Is Mauritius an economic partner or a tax parasite vis--vis its Global Protector - India? GAAR should highlight our tactical ability to forge farsighted international economic relations beyond the safety nets of DTAs, AGOA, and crumbling bilateral trade agreements in the long term. Is Singapore Model our salvation?

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INDIA's GAAR: OFFSHORE, Mea Culpa