AFTER A FEW WEEKS of controversy it now seems that European countries were dead wrong in their designation of this country as uncooperative on matters of international tax compliance. During this past week, a photo was published of the Italian Special Envoy to the Caribbean Paolo Serpi shaking hands with Minister of International Business after we signed a double tax agreement with Italy.
The Special Envoy is reported as saying that the blacklisting of this country was an unfortunate mistake, and that his country had asked the European Commission not to repeat the error. A picture is said to be worth a thousand words, but we feel that our minister was right to re-emphasise the gravity of this original error, and to remind all and sundry that this country is interested in legitimate business when he spoke at the recent Workshop sponsored by the Institute of Chartered accountants.
Spain has also backed down from its blacklisting by the 30 countries that took the decision last June to blacklist Barbados. We hope the message is clearly heard and understood that this country abides by international rules, and is interested in hosting clean business!
We have to be vigilant when this kind of ambushing can take place because much damage can be done before the truth emerges, since investors consult these lists from time to time, as they make or shift investments from one jurisdiction to another.
Minister Donville Inniss also pointed out that this error discloses weaknesses in the European system. And while this is probably true, our view is that our domestic vigilance must be so strong and accurate that we can put these misleading statements to rest as soon as they surface, since the consequences of the damage which may be done is enormous. Legitimate users of clean international financial centres are not going to take kindly to disclosures that their jurisdiction of choice is uncooperative and harbours dirty money.
We congratulate the minister and his officials for jumping on this falsehood and dealing with it emphatically, but with this battle won, the war continues! Mr Bruce Zagaris, a well known expert in international tax matters, does not hold out much hope that the screws will not be tightened on offshore jurisdictions by the big countries. He opines that no matter how much the small jurisdictions try to comply they will still be subjected to tough action of the kind applied by the EU.
The Ministry of International Business is doing a good job at the technical level of negotiating treaties, and the learned and industrious Miss Francoise Hendy, whose skills in the area are well known, is our lead negotiator; but the Government should seriously consider engaging additional staffing in this area to assist in the big job of monitoring the fast-paced developments and the tsunami of information arising with these issues.
There is too much at stake for us not to fight to hold our market share in those offshore areas that we have established. But the minister says that there are greater benefits to be derived from the sector. He revealed that the sector contributes about nine per cent of the gross domestic product, but that it could do better.
We agree with the minister on this point but we feel that the technical side of the ministry must be more adequately resourced to help to deliver the benefits.
