A decision by a group of European Union (EU) member states to blacklist Barbados as a non-cooperative tax jurisdiction has been condemned by the leading international body for ensuring the implementation of globally agreed standards of transparency and exchange of information related to taxation.
In correspondence dated June 19, 2015 and circulated to key stakeholders including the Organization for Economic Cooperation and Development (OECD), Head of the Global Forum on Transparency and Exchange of Information for Tax Purposes, Monica Bhatia, suggested that the EU states in question were wrong in their assessment of Barbados.
“As the OECD and the Global Forum, we would like to confirm that the only agreeable assessment of countries as regards their cooperation is made by the Global Forum and that a number of countries identified in the EU exercise are either fully or largely compliant and have committed to AEOI (Automatic Exchange of Information), sometimes even as early adopters,” Bhatia stated in the document.
A copy was released to Barbados TODAY during a hurriedly called news conference this afternoon by Minister of International Business Donville Inniss at his Baobab, Warrens, St Michael office.
On Wednesday, the European Commission published the list which was drawn up by 12 of its member states identifying 30 “non-cooperative tax jurisdictions” and naming Barbados among 15 in the Caribbean who they say are guilty.
Inniss told reporters that Barbados was on solid ground in refuting that conclusion –– with the blessing of the Global Forum –– the institution that matters in issues of this nature.
Further strengthening this country’s case, the Global Forum added: “Without prejudice to countries’ sovereign positions, we are happy to confirm that these jurisdictions are cooperative and we would like to commend the tremendous progress made over the past years as well as the cooperation and integrity of the Global Forum process.”
The Global Forum said it had already expressed its concerns and stood ready to further clarify to the media, the position of the affected jurisdictions with regard to their compliance with its standards.
Armed with this information, the International Business Minister said he would be making formal representation in two weeks’ time to the individual EU countries challenging their assessment of Barbados and asking that this island’s name be dropped from the list.
Flanked by President of the Barbados International Business Association Connie Smith and Executive Director of Caribbean Export Pamela Cooke-Hamilton, Inniss said he had already told the Head of the European Delegation for Barbados and the Eastern Caribbean, Mikael Barfod, that the list was unfair, had damaging implications for this country’s reputation, “and we are not prepared to roll over a play dead on this.”
“Matters like these that have raised their heads in the last two days would also be addressed by my communicating directly with EU Commission on this matter. I have already had a conversation with the EU Ambassador to Barbados and the Eastern Caribbean . . . Mikael Barfod and the EU Commissioner’s Office would have issued a press release on this matter yesterday which I had sight of.
“ . . . But notwithstanding that, I had a conversation with the Ambassador to which I made it abundantly clear the position that Barbados has taken, how unfair that we think that this release has been; how much damage it can cause to us, and we are not prepared to roll over and play dead on this,” he added.
Inniss said Government will also have bilateral discussions with those countries which placed Barbados on the list to ensure they are aware of the consequences of their actions and, more importantly, to endeavour to have this island removed from it.
“We are satisfied that they need to understand that is obviously an error in placing Barbados on the particular list like this. We certainly are committed to increasing our surveillance and research capabilities in the Ministry and the Government on the whole on these matters to ensure that we are able to pick them up a lot earlier and to avoid these instances occurring.”
Inniss also said he would be seeking to have a CARICOM approach to dealing with these matters and would be pushing to have them placed high on the agenda of the upcoming CARICOM Heads of Government summit here.
The Barbados-based Caribbean Export would therefore be introducing measures designed to nip such occurrences in the bud. Cooke-Hamilton disclosed that a CARICOM Response Mechanism, facilitated by a secretariat, was expected to be up and running by September.
“It would do the research that is necessary to buttress the lobbying efforts and the advocacy efforts of the Caribbean countries. Barbados, of course, is one of the key countries that this would affect, but it would also affect Bahamas; Grenada is on the list, St Kitts, St Vincent, St Lucia, Antigua and Barbuda as well as Trinidad and Tobago. So it’s across the board,” she stated.
She said it would also affect overseas dependent territories that Barbados and the rest of the Caribbean have been working with such as Cayman and Bermuda.
“So it is very critical at this stage that we have a rapid response mechanism that is established; that we are seeking to do and we will have hopefully by September,” Cooke-Hamilton said.