One of the best Valentine’s Day gifts Barbados could have received was the decision by the European Union (EU) Council to remove the island from its harmful list of non-cooperative tax jurisdictions.
While the country was still celebrating the exhilarating performance of National Hero and global business mogul Robyn Rihanna Fenty at the Super Bowl on Sunday night, the news was circulating that the island was being released from an imposition that had deep implications for our ability to do business with the rest of the financial world.
The various black and grey listings by the EU have been longstanding sources of discomfort and ire for not only Barbados but several other Caribbean nations and small island developing states searching for ways to diversify their economies.
Mr Jamar Arthur-Selman, president of BIBA, the Association for Global Business, was quoted in the local media welcoming the move. He described it as “a nice basis for us to continue to attract foreign direct investment, and for us to be able to help companies feel settled, without incurring any extra due diligence measures that may be imposed on a country that is listed by the EU”.
We understand that Mr Arthur-Selman is pleased because it lifts an enormous millstone from around the neck of the international business community operating on the island.
The BIBA president who is also general manager of one of the global companies carrying on operations from Barbados, highlighted that grey listing impacted the decisions of high net-worth individuals and companies from operating in Barbados because their corporate by-laws prevented them from doing business in a country that was placed on any of the adverse lists such as those of the EU.
What is important to note is that for several years Barbados has complained about the double standards employed by the industrialised countries creating standards that seem to directly target the offshore sector of Caribbean islands.
They have unfairly slapped pejorative terms such as “tax havens” to countries like Barbados, a situation that we are still fighting to shake off. We have spent decades jumping through hoops and skipping over ropes in an effort to seek the legitimisation of our place as a global financial centre.
We have been down this road before as a country and it seems the goal posts will continue to shift, as industrialised countries continue to seek a protectionist approach to global business by positioning it on the trojan horse of compliance and regulatory rules.
Late last year, MP Edmund Hinkson, Barbados’ representative at the 61st Organisation of African Caribbean and Pacific Parliamentary Assembly stage in Mozambique, raised concerns about the actions of the EU.
Hinkson pointed out a glaring double standard, where some of its own EU members are in breach of the same standards for which they had black and grey listed countries like Barbados.
“The EU has so far refused to budge on what it perceives as its right to continue its unilateral black and greylisting of countries in the CARICOM, Africa and Pacific regions as non-compliant states on ATM/CFT issues, even after they have come off the lists of the Financial Action Task Force and the Organisation of Economic Cooperation and Development and even although some EU member states are seriously in breach of their own standards but are not so listed,” Hinkson said on his return to the island.
Given the EU’s long established development partnership with Barbados and the Caribbean, it is difficult to reconcile the enthusiasm to provide development aid while at the same time, taking actions that serve to dismantle a competitive economic pillar.
As Barbados-based Caribbean economist Marla Dukharan, an unapologetic critic of the EU’s approach to blacklisting, termed it, the Europeans were simply being bullies.
In a paper titled EU Blacklisting, Institutional Racism and Bullying, Dukharan slammed the blacklists, calling them “subjective and arbitrary, and a depart from the stance of the global authorities on both tax compliance and countering money laundering/financing of terrorism”.
Furthermore, she highlighted the penalties being imposed had the potential to “damage blacklisted economies irreparably”.
Today we are pleased with the decision to remove Barbados from the harmful grey list. However, history has taught us this battle will continue in another iteration. There will be new rules created for which we will be faulted for non-compliance and the cycle will continue.
In the meantime, we take this win and prepare for the next fight.
