CaribPR Wire, CASTRIES, St. Lucia, Thurs. Mar. 22, 2018: The Caribbean Association of Banks Inc., (CAB), is deeply concerned about the recent inclusion of Caribbean territories on the European Union Commission’s (EU) list of non-cooperative jurisdictions for tax purposes.
The list names countries which have not displayed sufficient commitment to the tax standards identified by the EU.
Blacklisting has debilitating effects on our Caribbean economies, specifically:
- It exacerbates the perception of our Region as ‘High Risk’ and consequently, negatively affects the risk profile of regional financial institutions and the willingness of correspondent banks to do business with them;
- It severely reduces critically-needed development funding from the EU and limits the ability of Caribbean territories to pursue their development goals; and
- It makes the region vulnerable to future sanctions and financial penalties, which may be levied against “blacklisted” jurisdictions.
Removal from the blacklist requires a high-level political commitment from the affected jurisdictions to address the deficiencies identified by the EU’s Code of Conduct Group. The status of Caribbean Territories as of March 13, 2018 by the OECD are as follows:
|Annex I (Black list)
||Annex II (Grey list)
||Antigua and Barbuda
|Saint Kitts and Nevis
|Trinidad and Tobago
||British Virgin Islands
|St. Vincent and the Grenadines
The EU has given the above countries specific timeframes to make high level commitments to address the deficiencies identified by the Code of Conduct group. Some of the deficiencies identified in the various Caribbean jurisdictions are:
- Existence of Harmful and Preferential Tax Regimes;
- Non-application of Base Erosion and Profit Sharing (BEPS) minimum standards (tax avoidance strategies which seek to artificially shift profits to low/no tax jurisdictions); and
- Non-commitment to signing and ratifying the Convention of Mutual Administrative Assistance (Tax information exchange agreements to fight international tax evasion).
The CAB recognizes the efforts of regional governments thus far towards compliance with the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes Standards. Nonetheless, the very challenging issue of harmful and preferential tax regimes needs to be addressed.
Consequently, the CAB:
- Calls upon all regional governments concerned, to carefully assess the deficiencies identified by the EU and take the necessary actions to ensure compliance with Global Standards in order to avoid further reputational risk/damage to the region.
- Strongly recommends continued collaboration and coordination among CARICOM Governments so as to take appropriate measures on key issues which can impact the financial services sector as well as the growth and development of regional economies.
The CAB is a community of banks and other financial institutions in the Caribbean Region, which proactively influences issues impacting the financial services sector through advocacy, education and networking. The CAB represents fifty-three (53) banks and financial institutions in the Caribbean with an asset base in excess of US$40 billion as at Dec 31, 2017, in addition to seventeen (17) Service members comprising regional and international technological and professional institutions and three (3) Honorary Members. For more information see www.cab-inc.com/
Email: [email protected]‐inc.com
Tel (758) 452‐2877