Bad listing

EU names Barbados among global tax havens

Barbados is among four Caribbean Community (CARICOM) countries named in a new list of 17 global tax havens announced by the European Union (EU).

Also included on the blacklist, which follows ten months of investigations by EU officials, are Grenada, St Lucia, and Trinidad and Tobago.

EU finance ministers, who met in Brussels on Tuesday, also named American Samoa, Bahrain, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Tunisia and the United Arab Emirates among the dubious list of countries described as not doing enough to crack down on offshore avoidance schemes.

This is not the first time that Barbados has been blacklisted by the EU.

However, the news is by no means welcomed and even though the usually accessible Minister of International Business Donville Inniss could not be reached for comment this afternoon, Opposition Barbados Labour Party (BLP) Shadow Minister for International Business Kerrie Symmonds was swift in condemning the development, which he said was nothing short of “totally scandalous”, while highlighting the failure of Government to address offensive aspects of its fiscal regime over the past ten years.

“The regime for fiscal incentives was supposed to have been moved to world trade regulation and requirement by 2007. Whilst in Government the Barbados Labour Party maintained that the country being a very small and vulnerable economy should benefit from special differential treatment and we were granted an extension of time to December 2015 to move those offending aspects of the regime. The truth of the matter is that little or nothing has been done in that time and therefore we have come to a situation where once again because of dithering and a failure to act in a serious manner, despite caution after caution by international agencies about certain things vital to Barbados’ interest, we have now been put in this situation when we can least afford it,” Symmonds said.

He also cautioned the Stuart administration that instead of resorting to its customary mode of deflecting blame, it needed to accept the responsibility for allowing the country’s business reputation to sink to its current low.

“This was pretty much invited upon ourselves, but what aggravates me is the fact that as recently as today the Prime Minister demonstrated how out of touch he is by saying that people are slandering Barbados,” Symmonds said in reference to comments made by Stuart with respect to the Caribbean Court of Justice.

“You come to a point where you have to say that there are some things in which we and we alone have control. The history is replete with similar statements where he [the Prime Minister] tells us that they [international agencies] are shifting the goal post on us.

“He is like a little child that has been caught with his hand in the cookie jar and after reprimanding him, rather facing the fact that he did something less than prudent, he says, ‘it ain’t my fault, it is somebody else’s,’”  Symmonds stressed.

Back in June 2015, the country was included in a list of 30 countries described as non-cooperative jurisdictions on tax matters.

However, on that occasion Government had expressed surprise over Barbados’ inclusion on that list.

In fact, Stuart had himself described the move by the EU as “unfair and unwarranted”, while cautioning that the financial services sector was a vital element of the economies of a number of Caribbean countries, “touching their very existence.

“Harm to that sector unleashes a sequel of negative economic and social impacts on our development efforts which cannot easily be repaired, and which undermine legitimate initiatives at alternative options
for development to replace those of old,” Stuart had said in an address to a commemorative ceremony marking Europe Day last year.

At the time, the Prime Minister had also expressed strong hope that there would be no repeat in light of the Panama Papers, which revealed the hidden assets of hundreds of politicians, officials, current and former national leaders, celebrities and sports stars in more than 20 tax havens around the world.

However, there have been a series of other blacklistings since, including by the UK-based aid and development charity Oxfam, which listed Barbados as one of the world’s 15 worst tax havens in a move that was angrily dismissed by Inniss as “wicked”, “mischievous” and “grossly misleading”.

Last month Barbados also became entangled in the publication of the Paradise Papers, a global leak which identified 19 “secrecy jurisdictions” where some of the world’s biggest businesses, heads of state, including Queen Elizabeth II, and global figures in politics, entertainment and sport were said to be sheltering their wealth from the taxman at home. But as he had done previously, Inniss also rubbished that report while stating that even though he had no doubt that some territories functioned as tax havens, to place Barbados in this category was baseless and an “insult to common sense”.

Yet those assurances have in no way deterred the EU from including Barbados on its latest blacklist, which notably excludes the British Overseas Territories of the Cayman Islands and Bermuda, which were among Caribbean states previously blacklisted.

However, following complaints raised about the methodology used the previous list was scrapped and replaced with the new register which is based on whether a state gives preferential treatment to companies enabling them to move profits to avoid charges.

Blacklisted countries could lose access to EU funds. Other possible countermeasures will be decided in coming weeks, according to EU officials.

In the meantime, another 47 countries have been included in a “grey” list of countries not compliant with EU tax standards, but who have committed to change their rules.

“This initiative is already proving its value, as numerous countries have worked to meet the deadline for making commitments on the basis of our criteria. But it is also important that we closely monitor the implementation of commitments made by our partners around the world. This is not just a one-off process. We will regularly review and update the list in the years to come. Our aim is to ensure that good tax governance becomes the new norm,” said Toomas Tõniste, minister for finance of Estonia, which currently holds the European Council presidency.

Members of the European Parliament have criticized the absence of certain countries from the list with Sven Giegold, economics spokesperson for the Green group, noting that “not one of the most important tax havens has been put on the list.

“The list is politically biased as relevant financial centres like the United States of America are missing.”

5 Responses to Bad listing

  1. Kevin December 5, 2017 at 11:57 pm

    ……..economics spokesperson for the Green group, noting that “not one of the most important tax havens has been put on the list……

    Exactly, I was wondering how Bermuda and Cayman could escape the list this time around…

    Reply
  2. Bunn December 6, 2017 at 12:51 am

    Prove them wrong and stop playing with words!

    Reply
  3. hcalndre December 6, 2017 at 3:46 am

    With Barbados current financial problems and the recent study that the EU has done you will hear the ministers saying, “dey don`t like we.” Barbados not going to refuse money even if jesse james ride into town with a bag full.

    Reply
  4. MyPanamaLawyer December 6, 2017 at 8:02 am

    EU bureaucrats want to drive brown- and black-skinned financial centers into indentured servitude like colonial days to make up for overspending in EU countries.
    At least Barbabos is in good company with emerging powerhouses like South Korea and UAE Dubai 🙂
    Rational AML measures should be continued, but be aware that black lists will always continue as media devices of idle Eurocrats in Brussels and Paris: wannabe colonial centers of the 21st century.

    Reply
  5. Donild Trimp December 6, 2017 at 1:07 pm

    Barbados is a known tax heaven for the rich. This is no secret and it should not be something to be ashame of.

    Naming this activity as “offshore avoidance schemes” is a bit misleading. Let me add however, that if money laundering is the issue, then that is another kettle of fish.

    Prime Minister Trudeau recently ordered Revenue Canada to investigate all Canadians with financial dealings in Barbados to see if any Canadian laws were broken.

    There is a loop hole in Canadian tax laws that allow Canadians to use Barbados and other countries as tax heavens.

    Taking advantage of this loop hole is not illegal under Canadian tax laws, although some may see such activity as immoral.

    Apple and folks like Bono used the same loop hole, although not in Barbados, to their advantage.

    The article is misleading to say the least.

    Reply

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