The financial services sector here and in the Caribbean faces the possibility of a major shock that could have catastrophic consequences on regional economies.
Prime Minister Freundel Stuart revealed this morning that there were reports that the European Commission was considering blacklisting Barbados again as an uncooperative tax jurisdiction.
In making the disclosure during a Europe Day 2016 commemorative ceremony at the Hastings, Christ Church headquarters of the European Union (EU) Delegation to Barbados and the Organization of Eastern Caribbean States (OECS), Stuart said if Europe proceeds with blacklisting the island, it could cause irreparable harm to the economy.
“I trust that this [blacklisting] will not materialize and that the European Union has by now recognized that the financial services sector is a vital element of the economies of a number of Caribbean countries, touching their very existence,” Stuart told the audience, which included Head of the EU Delegation Mikael Barfod, British High Commissioner to Barbados and the OECS Victoria Dean and French Ambassador Eric De La Moussey.
“Harm to that sector unleashes a sequel of negatives economic and social impacts on our development efforts which cannot be easily repaired, and which undermine legitimate initiatives at alternative options for development to replace those of old,” the Prime Minister warned.
He said the move towards a new blacklist was prompted by the Panama Papers scandal – the leaking of 11.5 million documents from the Panamanian law firm Mossack Fonseca – 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.
Some 34 companies registered in Barbados were said to be among those listed in the papers, while world leaders including British Prime Minister David Cameron, presidents Vladimir Putin of Russia, Petro Poroshenko of Ukraine and Mauricio Macri of Argentina, along with Argentinian football star Lionel Messi and Hong Kong film legend Jackie Chan, have come under scrutiny as a result of the leak.
The scandal widened today with the database of documents relating to more than 200,000 offshore accounts posted online.
Barbados was one of 14 Caribbean countries from a list of 30 worldwide that were blacklisted by the EU last year as the world’s worst tax havens, prompting the Stuart administration to protest against the decision.
Stuart admitted today that he was surprised when the country was placed on the blacklist and said he still believed it was unfair and unwarranted.
However, even as he questioned the threat to the financial services sector, the Barbadian leader promised to work with the EU to tackle a different threat – that of terrorism.
“Even though I have written to individual leaders of the countries [in Europe] affected, I want to repeat in this forum that Barbados stands in solidarity with the EU and its efforts not only to combat, but to eliminate this scourge
that has invaded your region and that threatens the security of us all,” he promised.
Stuart said EU had been “unwavering” in its commitment and support to Barbados and the region in their effort to address their own crime and security issues.
He said in the 40 years since the relationship between the two began, the EU has given significant levels of aid to Barbados.
He pointed to the 11th European Development Fund programme under which this country benefits from a €3.5 million (BDS$8 million) allocation focusing on the energy sector and more specifically, renewable energy and energy efficiency.
At the end of today’s ceremony, Stuart and Head of the EU Delegation Mikael Barfod unveiled a plaque in commemoration of 40 years of the EU’s partnership with the region and Barbados’ 50th year of Independence.