Six weeks after Barbados was placed on, but quickly removed from, a global “blacklist” of tax havens, the island has reasons to stand tall.
Barbados is now among countries that are considered far more transparent and less secretive in their financial dealings than most of Europe and North America.
The island was given a ranking by experts that was much better than most of the members of the European Union, whose finance ministers voted in December to blackball the island. That action had earmarked Barbados and several other countries for trade, financial and other sanctions because of their alleged financial secrecy, lack of openness and failure to crack down on corporate tax dodging.
A team of financial experts, academicians, advocates of corporate tax fairness and opponents of money laundering, tax evasion and corruption assembled by Britain’s Tax Justice Network, prepared the widely watched Financial Secrecy Index, whose results were released a few days ago and the findings have attracted international attention, including criticisms of the European Union and the Organisation for Economic Cooperation and Development.
The index, which ranks countries in an inverse order, meaning the worst offenders are at the top and the least secretive at the bottom, found that:
• Barbados was 48th out of 112th states. It was not among the world’s top offenders – Switzerland, US, Cayman Islands, Hong Kong, Singapore, Luxembourg, Germany, Taiwan, United Arab Emirates, Guernsey, Lebanon, Panama, Japan, Netherlands and Thailand.
• Canada, whose international commercial banking system provides the backbone of commercial banks in Barbados and the rest of CARICOM, was ranked 21st, indicating it was less transparent than Barbados and most of its neighbours.
• The US Switzerland, Luxembourg, Germany and Guernsey are among the biggest tax havens in the world, but they were not on the EU blacklist.
• The US “remains a secrecy jurisdiction as it refuses to take part in international initiatives to share tax information with other countries”.
• The English-speaking Caribbean provides many of the world’s best financial jurisdictions, ranking from Montserrat, St Vincent and St Lucia to Trinidad and Tobago and Grenada.
• The UK was ranked 23rd, putting it among the worst offenders. The British government played a key role in fingering Barbados for the blacklist but it later helped to remove the country from it.
• Switzerland was the global capital of bank secrecy but the EU excluded it from its blacklist but put Barbados on it.
“Barbados accounts for less than one per cent of the global market for financial services, making it a small player compared with other secrecy jurisdictions,” stated the Tax Justice Network, the organisation that compiled and published the Financial Secrecy Index.
As for the Index, the Network which publishes it every two years described it as “the world’s most comprehensive assessment of the secrecy of financial centres”. (TB)
