The chief executive of the organization representing locally registered international businesses anticipates that Barbados and other offshore jurisdictions will be subjected to “more pressure and blacklisting, naming and shaming” as part of the fallout from the Panama Papers leak.
Executive Director of the Barbados International Business Association (BIBA) Henderson Holmes said Barbados did not have a reputation for secrecy and was perceived as a well-regulated jurisdiction that insists on transparency.
However, he was concerned that it would still be “tarred with the same brush” as other jurisdictions.
Holmes’ comments were made as more information came to light through the Panama Papers about how the secrecy which obtains in some offshore domiciles allows tax dodging, money laundering and other illegal activities.
“No doubt the international financial community is expecting a negative result of this development,” he told Barbados TODAY, while making reference to a statement by Secretary General of the Organization for Economic Cooperation and Development (OECD) Ángel Gurría that the Mossack Fonseca leak “shone the light” on Panama’s “culture and practice” of secrecy.
“One can only surmise from his comments that more pressure, and blacklisting, naming and shaming of this type will follow, whether it is warranted or not,” Holmes said.
The Panama Papers are documents leaked to a German newspaper from Mossack Fonseca, a Panama-based international law firm which is heavily involved in the offshore financial services business. Barbados was among Caribbean jurisdictions mentioned in the documents.
Holmes said Barbadian officials should remain confident “with what Brand Barbados stands for and focus on the continuous improvement of our sector offering, both in terms of products and providers.
“We have recently enacted the Corporate & Trust Service Providers Act and this particular piece of legislation has initiated licensing and regulation of the firms providing corporate, trust and management services to international companies and investors, in order to ensure the preservation of Barbados’s pristine reputation as a place for doing business,” Holmes added.
He explained that there was nothing to suggest that the 34 Barbados-registered companies mentioned in the documents were engaged in illegitimate business activities.
Holmes said companies had a legitimate right of incorporation in different jurisdictions for a very wide range of reasons, including mergers, acquisitions, estate planning, restructurings, cross border transactions and protection of assets.
“Even if the names of Barbadian firms appear in the report on Fonseca, that does not mean that they are conducting illegal or shady business,” Holmes emphasized.
Governments of major developed countries grouped under the OECD and some European Union countries have ramped up pressure on offshore financial centres in recent years, labelling them as facilitators of tax avoidance by their wealthy citizens. (MM)