Disclaimer: The views and opinions expressed by this author are their own and do not represent the official position of the Barbados Today.
by Dr. Christopher Hackett
The United Nations Secretary General Antonio Guterres of Portugal has recently announced his availability to serve a second term when his current one comes to an end at the end of this year (31 December).
He has been serving as the ninth Secretary General of the United Nations since 1 January 2017. This I believe is a most opportune time for Barbados and other Caribbean and like-minded small states to convey to Mr. Guterres some of their priority development concerns as he campaigns for re-election.
The Secretary General has been supportive of a number of the priority development issues of concern to Caribbean countries during his first term such as climate change and natural disasters, and I believe that Barbados and the region can count on his continuing support during a second term.
One of the concerns that should be raised with the UN Secretary General is the issue of the EU Tax Blacklisting of the financial jurisdictions of Barbados and a few other small developing countries.
What is required in my view is the creation of a global body within the United Nations to oversee all aspects of International Cooperation in Taxation matters.
An ideal location would be to have such a body established as an Intergovernmental Committee of the United Nations Economic and Social Council, which is the primary organ of the organization with responsibility for overseeing economic, social and sustainable development matters.
It acts as a form of Security Council in the economic and social spheres. In proceeding to undertake this task, member states will not be required to start anew.
They can build on a structure that was already created at the United Nations in 2004 under the leadership of Barbados and a few other developing countries, but did not possess all of the powers required to enable it to monitor and verify the implementation of the global guidelines and procedures that it had formulated and recommended for approval.
This was a body of experts on International Cooperation in Tax Matters, which although a subsidiary body of the United Nations Economic and Social Council, had only an advisory mandate.
The ECOSOC was charged with the responsibility of overseeing the selection process of its members to ensure the transparency and equitable representation. The group has been serving as an advisory body to the ECOSOC, and in this context is seen as a universally global forum for policy formulation and norm setting on international tax cooperation issues with a view to enhancing and promoting international tax cooperation.
The EU took advantage of this apparent vacuum, and abrogated unto itself the “right” to formulate regulations on International taxation policies.
It passed on to the Organisation for Economic Co-operation and Development (OECD) the responsibility of being a global tax policy authority, and charged it with the responsibility of policing countries to ensure that they comply with international tax systems under what they termed the Base Erosion and Profit System (BEPS).
In so doing the EU created its own list of non-cooperative tax jurisdictions that did not conform to the EU’s requirements.
What is interesting and relevant in the case of Barbados, is that the country did converge its local and international tax rates, thereby making its tax system globally competitive, and bringing the country in line with the OECD’s BEPS initiative.
This however seemed not to have been sufficient for the EU. While some commentators have issued charges of racism at the behaviour of the EU and the OECD, I am in no position to impute motives.
I do subscribe to the view that the OECD position had more to do with the competiveness of our jurisdiction with others that were located in Europe, and the move to drive business back on shore to strengthen the revenue position of the developed countries.
It must be pointed out however, that while the EU has every right to develop and implement policies and regulations in the interests of its members, it has no global mandate to impose the implementation of those same policies and regulations on other sovereign independent countries that are not members of their regional body.
While cross border coordination on tax and anti-money laundering rules is very desirable, the EU’s aggressive and unilateral demand for change in the domestic laws of other countries is intrusive, and threatens Barbados’ autonomy in its own national tax matters.
Such global financial and economic matters are best addressed in global bodies like the United Nations where all countries have the legal right to participate. Such a global debate should lead to the creation of global standards and non-discriminatory rules that would be applicable to all countries.
Barbados and other countries that face these financial challenges that have been created by the EU and the OECD should mount a diplomatic campaign for change, and the creation of this important economic oversight body within the United Nations in the form of a decision by the United Nations General Assembly.
Secretary General Guterres is well positioned to advocate for such a policy change as he meets and interacts with leaders of the developed world, particularly those that are members of the EU, at meetings of the G-7, the G-20, the World Economic Forum, the UN General Assembly, as well as other global high level meetings, and during his election campaign. The United Nations of which he is the current leader, is a global institution that provides an enabling environment for like-minded countries to work together with a view to achieving common objectives.
It also has the capacity and global credibility to formulate the appropriate policies to deal with this international tax cooperation issue. Indeed, it is the epitome of globilization at work in a multilateral setting.
Moreover, an effective United Nations is in the interest of the global community of states, and particularly so for small island states like Barbados.
Countries like Barbados therefore have a responsibility to play a role in ensuring the creation and operation of such institutions of global governance at the multilateral level that would work in their interests and indeed the interests
of all countries.
Ambassador Dr. Christopher Hackett is a former Permanent Representative of Barbados to the United Nations.
