The Caribbean Association of Banks Inc. (CAB) is once moreforced to express its deep concern over yet another “tax-haven” list which includes 15 Commonwealth Caribbean countries. The referred list appears within the District of Columbia’s2015 Budget Support Act which expands the definition of “tax haven” (for purposes of the water’s-edge combined group rules).
This Act is due for passing by the US Congress in just 18 congressional working days from Sunday 20th September, 2015.
While the CAB fully supports the District of Columbia’s efforts to combat tax evasion, the CAB feels that the designation of Caribbean territories as “tax havens” is prejudicial. It is noteworthy that:
1. The Organisation for Economic Co-operation and Development (OECD) and the Global Forum on Transparency and Exchange of Information for Tax Purposes have confirmed that all members of the Caribbean Community and Common Market (CARICOM) are fully or largely compliant and have committed to Automatic Exchange of Information (AEOI);
2. None of the CARICOM countries listed in the Act are on the Financial Action Task Force (FATF) AML/CFT Strategic Deficiencies Lists;
3. All of the CARICOM territories listed in the Act have cooperated with the US Internal Revenue Service through the US Foreign Account Tax Compliant Act (FATCA) and (with the exception of one) are listed as either having a signed intergovernmental agreement (IGA) or being treated as having an IGA in effect; and
4. All CAB member Banks and financial services institutions have mechanisms in place to satisfy FATCA requirements.
Additionally, the CAB as part of its mandate, works very closely with its members to ensure compliance, training and other measures are satisfactorily in place with respect to regulatory, legislative and other matters of such nature.
It must be highlighted that this inaccurate description of Caribbean territories has already had and could have even further-reaching effects on the Caribbean’s financial services sector as well as the economies. Indigenous banks in the region are currently being challenged with the threat of loss of correspondent banking relationships which are provided by international banks. The DC 2015 Budget Support Act’s “black list” may serve to exacerbate the perception of our region as a high risk area and consequently, negatively impact the Risk Rating profile of financial institutions by correspondent banks.
As financial intermediaries, banks are highly dependent upon correspondent banking relationships to facilitate critical economic and financial transactions such as, remittances, foreign direct investments and international trade in goods and services. For example, the value of United States exports to CARICOM countries for the periods 2011-2013 were US$16.99B, US$18.6B, US$17.9B respectively; while US imports from CARICOM countries for the same periods were US$9.5B, US$8B, and US$8.4B respectively (Source: CARICOM Statistics).
These trade flows are derived mainly from key sectors such as Tourism, Manufacturing, Agriculture, Retail, ICT etc. Consequently, this issue impacts the very livelihood of Caribbean people.
Accordingly, the CAB is unable to understand the justification for identifying these countries as tax havens and has written to the District of Columbia Mayor Muriel Bowser (also copied to 13 Council members) and key members of Congress (Chairman and Ranking Members of both the House Appropriations Committee and the Subcommittee on Financial Services) urging them to remove the names of the Caribbean countries from this listing of “tax havens” as defined.
The Caribbean Association of Banks continues to monitor this state of affairs, closely.
It’s long past time for countries like ours with competitive financial services to tell high tax countries that if their overtaxed citizens come looking to us for relief, it’s their own fault and they should become more competitive rather than blame us.
It’s outrageous that our financial institutions are told to supply information about their customers to other countries. All we’re doing is undercutting our own financial services industry and enabling our own economic colonisation.
“Now consider a group of baboons. They are the loudest, most dangerous, most obnoxious, most viciously aggressive and least intelligent of all primates. And what is the proper collective noun for a group of baboons? Believe it or not … a Congress!
Go Figure!
OLD!!!!!
When will slavery end!!!!!!!
The so called blacklists should refer to all these multinational corporations that stuff all their cash in places like Ireland and Switzerland in order not to pay any taxes . Why are these countries and companies not blacklisted ? . There are many more ! So much for bullying !