* Uruguay is on OECD’s “gray list” of tax havens
* Country faces international pressure to reform rules
* Center-left government seeks broad congressional support
By Conrado Hornos
MONTEVIDEO, Oct 4 (Reuters) - Uruguay’s government is negotiating with the opposition over a bill to reform the country’s banking secrecy rules, a drive that responds to global pressure to crack down on tax cheats.
The proposal has faced resistance from rightist lawmakers and banking groups in Uruguay, which is listed by the Organization for Economic Cooperation and Development (OECD) on its “gray list” of tax havens that have not fully implemented global transparency and data-sharing standards.
Under current rules, banking secrecy can only be lifted as part of a criminal fraud investigation. The reform proposal, which could be debated in the Senate next week, would extend that to cases of suspected tax evasion.
Banking secrecy is a sensitive issue in the South American nation because it forms a pillar of the financial system, so the center-left government is keen to get broader backing for the measure even though it controls Congress.
“The bill that came from the government was too vague and didn’t contain guarantees. We’ve presented an alternative bill,” center-right Sen. Eber Da Rosa told Reuters.
Some opposition lawmakers have vowed to block the reform on the grounds that it infringes on the right to privacy.
Changes that could be introduced to the bill to make it more palatable to critics include a provision to avoid the automatic lifting of bank secrecy if a judge does not make a specific ruling and the introduction of an appeals process.
More than 20 percent of the $13.42 billion in foreign currency deposits in Uruguay’s banks is owned by non-residents, according to the central bank’s latest figures.
Argentines are the biggest group of foreign savers in Uruguay, many of whom stash their money offshore to avoid paying taxes.
The Uruguayan Association of Private Banks (ABPU) said the changes being proposed to the bill would be an improvement, but it continues to reject the reform.
“At least it’s better than before,” Julio De Brun, executive director of the association, told Reuters. “(Easing banking secrecy) is a dangerous step, but if they’re going to do it, we’d rather it was done well.” (Writing by Helen Popper, Editing by Chizu Nomiyama) (firstname.lastname@example.org; +54-11-4318-0655; Reuters Messaging: email@example.com))