Caribbean As­so­ci­a­tion of Banks Inc. (CAB) Re­sponds to EU’s “Blacklist”

The Star (St. Lucia) - - REGIONAL - For more on this sub­ject, read our cen­tre page ar­ti­cle.

The re­lease of the “Ac­tion Plan for Fair and Ef­fi­cient Cor­po­rate Tax­a­tion in the EU” by the Euro­pean Union Com­mis­sion on the 17th June, 2015, which in­cluded 15 Caribbean coun­tries in a “blacklist” of non-co­op­er­a­tive ju­ris­dic­tions, has caused the Caribbean As­so­ci­a­tion of Banks (CAB) grave con­cern. Notwith­stand­ing that the Euro­pean Union has now clar­i­fied that the fi­nal de­ci­sion, re­gard­ing which coun­tries should be on the list, has not been made; it must be high­lighted that the tim­ing of this pub­li­ca­tion and its gen­eral per­cep­tion as a new “blacklist” could have far-reach­ing ef­fects on the Caribbean’s fi­nan­cial ser­vices sec­tor.

In­dige­nous banks in the re­gion are cur­rently be­ing chal­lenged with the threat of loss of cor­re­spon­dent bank­ing re­la­tion­ships which are pro­vided by in­ter­na­tional banks. An ad­di­tional “blacklist”, based on un­clear cri­te­ria, may serve to ex­ac­er­bate the per­cep­tion of our re­gion as a high risk area and con­se­quently, neg­a­tively im­pact the Risk Rat­ing pro­file of fi­nan­cial in­sti­tu­tions by cor­re­spon­dent banks. The fi­nan­cial ser­vices in­dus­try can­not sur­vive with­out cor­re­spon­dent bank­ing re­la­tion­ships and, as a re­sult, nei­ther can our economies.

The CAB is pleased to note the re­sponse of the Or­gan­i­sa­tion for Eco­nomic Co-op­er­a­tion and De­vel­op­ment (OECD) and the Global Fo­rum on Trans­parency and Ex­change of In­for­ma­tion for Tax Pur­poses which con­firms that: “the only agree­able as­sess­ment of coun­tries as re­gards their co­op­er­a­tion is made by the Global Fo­rum and 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.”

It is note­wor­thy that the eight CARICOM coun­tries and five as­so­ci­ated mem­bers which are named in the EU’s re­port are all in­cluded in the OECD’s list of mem­bers who have com­mit­ted to Au­to­matic Ex­change of In­for­ma­tion.

The CAB there­fore calls upon the EU to care­fully re­view the cri­te­ria used by its mem­ber states to as­sess and de­ter­mine the coun­tries that are non-com­pli­ant in tax mat­ters. Ad­di­tion­ally, the CAB strongly rec­om­mends greater col­lab­o­ra­tion be­tween the EU, the OECD and the Global Fo­rum on Trans­parency and Ex­change of In­for­ma­tion for Tax Pur­poses be­fore “blacklist” re­ports are is­sued. The CAB also urges re­gional gov­ern­ments to act to­gether to en­sure that the re­gion is rep­re­sented in such key de­ci­sion-mak­ing pro­cesses which can im­pact the growth and de­vel­op­ment of our economies.

The Caribbean As­so­ci­a­tion of Banks, Inc is a com­mu­nity of banks and other fi­nan­cial in­sti­tu­tions in the Caribbean/ CARICOM Re­gion which pro­vides op­por­tu­ni­ties for dis­cus­sion on is­sues im­pact­ing the re­gional bank­ing/fi­nan­cial ser­vices com­mu­nity. CAB is ded­i­cated to the ad­vo­cacy of na­tional and in­sti­tu­tional ad­her­ence to Anti-Money Laun­der­ing/Counter Ter­ror­ist Fi­nanc­ing (AML/CFT). It rec­om­mends and sup­ports full com­pli­ance with the AML/CFT stan­dards in or­der to pro­tect all fi­nan­cial sys­tems within the re­gion from on­go­ing risks, of­fer­ing on­go­ing train­ing and ed­u­ca­tion for its mem­bers.

Last week the EU re­leased a blacklist of tax havens. The list of 30 ter­ri­to­ries in­cludes Hong Kong and Brunei in Asia, Monaco, An­dorra and Guernsey in Europe and a se­ries of Caribbean havens in­clud­ing

the Cay­man Is­lands and Bri­tish Vir­gin Is­lands.

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