Last week the European Union published a blacklist of what it called “un-cooperative tax jurisdictions” and a number of Caribbean countries were on the list.
Since then the matter has created much controversy across the Caribbean.
Although Dominica is not on the list Prime Minister, Roosevelt Skerrit, condemned it saying it was made without consultation and there is no basis for it.
Head of the EU Delegation to Barbados and the Eastern Caribbean, Ambassador Mikael Barfod, has sought to explain the matter.
Below is his full explanation:
First let me make it very clear that there is no new assessment of Tax Havens by the EU.
The EU Commission has simply asked the EU Member States (MS) to make their own individual assessments: if more than 10 EU Member States regard a non-EU country as ‘uncooperative’ in tax questions, this country automatically ends up on a list of 30 ‘uncooperative’ states that was published last week.
This approach is an attempt by the EU Commission to encourage EU Member States to become transparent about their criteria for ‘uncooperative’ states, to coordinate these criteria between EU Member States themselves, and finally to entice EU Member States to regularly update their criteria.
This approach may appear arbitrary outside the EU as many have already pointed out in the Caribbean. However, it is clearly of interest to individual Caribbean countries (as Barbados’ Minister of International Business Hon. Donville Inniss has suggested already) to contact EU Member States that have named a given Caribbean country as ‘uncooperative’, in order to see why the EU Member State made this rating and what were the precise criteria.
The criteria may not be part of ‘blacklisting’ in a traditional sense (as it is sometimes perceived) but could be showing what a specific EU Member State itself believes are ‘low tax rates’ or a ‘harmful tax regime’ in a given non-EU country.
Based on the background and approach just described there are not likely to be any consequences for credit ratings or private investments in Caribbean countries. The approach had a totally different purpose and is geared towards improving a harmonized EU assessment in the future.
The dialogue on what is ‘uncooperative’ or not between the EU and the Caribbean could be the start of a much better mutual understanding in the future.
To be blunt…this is an injustice and it should not be allowed to continue. This lame-duck response really has no value.
A lame defence by the EU rep and, I suspect, he knows so
Hairsplitting by mr. Barford. He simply does not want blame to be attached to the E.U. head office in Brussels bu the effect is the same. He does not have to grovel or apologise. If 10 or more E.U. countries find the Caribbean countries that are listed uncooperative they have every right to say so. Anyone who feels offended can say so too, some may call it blackmail but after all is said, the fact remains that this does not help us in requesting aid from the E.U.
Perhaps not. But examples like Bermuda and the Caymans show that the aid small countries get from the EU pales in comparison with the benefits to having a vibrant financial services sector.