Barbados: BIBA official - See blacklist as an opportunity

By added on 30/06/2015

The outgoing President of the Barbados International Business Association (BIBA), Connie Smith has stated that the EU blacklist should be viewed as an opportunity for the jurisdiction, reports the Barbados Advocate.

“The decision by a group of European Union (EU) Member States to blacklist Barbados as being non-cooperative and further claim that Barbados and 29 other countries, mostly small islands, do not meet its standards of transparency, exchange of information and fair tax competition, is hypocritical and on the face of it, grossly discriminatory.”

Ms Smith also noted, “I would certainly like to challenge the integrity of this new blacklist.”

“Do any of the EU Member States have any major tax investigations with any companies domiciled in Barbados or have they made a request for any tax information that has not been provided?” she queried, adding that, “It should be noted, for example, that we do not have any active trading arrangements with a number of the EU Member States that blacklisted Barbados, including Romania, Latvia, Lithuania, Estonia, Croatia and Bulgaria.”

Furthermore, Smith questions the partiality of the list when it comes to some of their own EU members.

“First of all, it does not mention Luxembourg, Ireland or the Netherlands, who are currently under investigation by the EU competition authorities for facilitating aggressive tax avoidance,” said Smith. “It is alleged that Luxembourg, for example, had entered into 548 private tax rulings to allow over 300 of the largest companies in the world to avoid paying taxes in EU countries.”

Smith is relieved, however, by the support offered by the OECD’s Centre for Tax Policy, who responded to the European Commission’s list of ‘non-cooperative jurisdictions’ in a press release published on June 17. It reiterated that “the only agreeable assessment of countries as regards their co-operation is made by the OECD’s Global Forum”. The OECD tax policy director, Pascal Saint-Amans and head of the Global Forum Secretariat, Monica Bhatia, stated that several jurisdictions on the Commission’s ‘blacklist’ are either fully or largely compliant with OECD Global Forum tax co-operation standards.

Meanwhile, the BIBA ex-officio sees this as an ideal opportunity to re-position Barbados with those that considered it appropriate to tarnish us.

“I would very much like to have Barbados enter into discussions with those EU Member States who have so listed us, with a view of gathering details as to why they placed Barbados on a blacklist and what criteria they used to arrive at this assessment; and engaging in bilateral discussions which could hopefully conclude in double-taxation agreements and bilateral investment treaties with a number of them,” she said.

Professor Avinash Persaud, a non-resident senior fellow of the Peterson Institute for International Economics in Washington, Emeritus Professor of Gresham College in the UK, and Chairman of Intelligence Capital Limited, agrees that the list was designed to “tar-and-feather these countries”, adding that it would cause a reduction in their access to international development funds and “pressure them into abandoning their international financial centres.”

“It is an act of gross discriminatory bullying that will become the modern definition of colonialism,” said Persaud.

Head of the European Union Delegation to Barbados, Ambassador Mikael Barfod, expressed his opinion recently, stating that there is no new assessment of tax havens by the EU.

“The EU Commission has simply asked the EU Member States (MS) to make their own individual assessments: if more than ten EU MS regard a non-EU country as ‘uncooperative’ in tax questions. This country automatically ends up on a list of 30 ‘uncooperative’ states that was published recently,” he said.

The ambassador then suggested, “It is clearly of interest to individual Caribbean countries, as Minister Donville Inniss has suggested already, to contact EU MS that have named a given Caribbean country as ‘uncooperative’ in order to see why the EU MS made this rating and what were the precise criteria.”

Smith believes that “the Global Forum meeting to be held in Barbados later this year gives us a grand opportunity to infuse that important global body with a better understanding of Barbados as a credible international business and financial services centre. [As well as] the value it adds to global trade and to the economies of the developed world as the findings of Professor Walid Hejazi of the Rotman School of Business”.

The outgoing president added that BIBA is doing its part in keeping the international business community in Barbados informed on the regulatory environment which is continuously being enhanced.

The association will be hosting an International Business Update Seminar on July 9, 2015 from 8am at the Savannah Hotel, Worthing on burning topical issues and will bring sharp focus on the legislations put in place to ensure that Barbados’ business environment is on par with international best practices.