Offshore sector must change to survive
BARBADIAN TAX AND INVESTMENT treaty negotiator Francoise Hendy thinks established financial centres like Barbados will have to re-define their competitive advantage in the current challenging environment.
Hendy, an attorney at law who was previously employed by Government as director of international business, said the position of these regional domiciles was now “tenuous” because the international tax agenda had forgotten their value.
She made the comments in an interview with international publishing house IFC Media Ltd.
“For established independent Caribbean IFCs [international financial centres], it will be important to re-define their competitive advantage and articulate that message to an audience predisposed to a message that resonates transparency and other hallmarks of the [Organisation for Economic Cooperation and Development] tax reform agenda,” she said.
“Regarding independent IFCs, it is extremely difficult to put a finger on which markets will provide future opportunities. The first reason is that it is not certain the kind of services they will be able to provide. To put it plainly, the very existence of independent Caribbean IFCs is not assured.”
She added: “It is not only a matter of keeping on top of compliance cost and the constant battle for ensuring their reputation is not used as the whipping boy for publications always interested in stirring up popular misinformation as a means of creating headlines.”
Hendy also pointed out that there was “no support for market retention or growth from an international body in support of these countries”.
“In fact, the trend has been the exact opposite. Despite the clear and uncontested information about where the risks have always been with respect to the global financial infrastructure still there seems to be no room for a sensible conversation about the role of Caribbean IFCs in the positive growth of the world economy,” she noted.
“To make the point one only has to look to the derisking exercise that the corresponding banks are embarking on against independent Caribbean financial institutions. Without a means of settlement, it is impossible to have a clear picture of the future.”
Hendy also said: “The global financial architecture must be able to accommodate the legitimate economic endeavours of small states.” (SC)