Chief Minister attends high-level OECD talks Barbados
BVI Chief Minister and Minister of Finance the Honourable Ralph T. O'Neal, Director of Financial Services Mr. Robert Mathavious and Financial Secretary Allen Wheatley attended a January 8th-9th meeting in Barbados of the Organization for Economic Cooperation and Development (OECD). The high-level consultation on tax and competition issues in the global financial market was sponsored by the Commonwealth Secretariat and the OECD Global Forum on Taxation and hosted by Barbados' Prime Minister Owen Arthur. ìIt will offer an opportunity for an exchange of views on the purpose and impact of the OECD's drive to end harmful tax practices that distort competition both within OECD countries and elsewhere.
The objective of the meeting will be to consider early confidence building measures and to develop a shared perspective on the way forward in efforts to end harmful tax practices. It will also examine measures to improve the offshore jurisdictionsí administrative and regulatory capabilities and, where necessary, to provide assistance in restructuring their economies,î according to a release issued by the OECD before the meeting. The Barbados meeting resulted from an initiative by Prime Minister Arthur when he participated in a Commonwealth Finance Ministers meeting in Malta in September 2000 against the background of a "name and shame" campaign by the OECD to blacklist so-called ìuncooperative jurisdictions with "harmful taxation" policies. Prime Minister Arthur chaired this week's meeting and the co-chairs were Dame Veronica Sutherland, Commonwealth Deputy Secretary-General for Economic and Social Affairs and Mr. Seiichi Kondo, Deputy Secretary-General of the OECD.
This initiative followed the OECDís publication last June of a list of 35 offshore financial centres around the world from which it is seeking co-operation in efforts to end fiscal abuses that distort competition in a global financial market. In November, the OECD published a Framework for a Collective Memorandum of Understanding on Eliminating Harmful Tax Practices as a proposed basis for dialogue between the OECD and jurisdictions outside the OECD area.
This text, available on the OECDís website at - http://www.oecd.org/media/MOUrev20novR1.pdf sets out in clear terms the steps that the OECD is asking these jurisdictions to take in order to demonstrate a commitment to transparency, non-discrimination and effective co-operation.
Prior to publication of the June list, six jurisdictions -- Bermuda, the Cayman Islands, Cyprus, Malta, Mauritius and San Marino - had already undertaken to work with the OECD with a view to ending such practices by the end of 2005. More recently, the Netherlands Antilles and the Isle of Man have made similar commitments. The OECD is working closely with a number of other jurisdictions with a view to similar co-operation. As arrangements were being put in place by the Commonwealth Secretariat for the meeting, the President of the Caribbean Development Bank, Sir Neville Nichols, blasted the OECD for playing what he called a "bad joke" against Caribbean countries with offshore financial centres. He argued that if the OECD people are serious about money laundering operations and curbing what they view as "harmful" tax practices, then they should be looking within their own jurisdictions and not seeking to unjustly destroy the small and vulnerable economies of states in this and other regions.
The Barbados meeting was mandated to come up with an alternative arrangement to prevent the planned unilateral naming by July 1, 2001 of the countries with the claimed ìharmful taxationî policies. A report in the Barbados Daily News suggested that it was essential for the Caribbean, possibly in cooperation with other jurisdictions, to consider the most effective collective response in opposing the OECD and its ally, the Financial Action Task Force (FATF) from what remains an issue that has divided even member states of the OECD. While the OECD has no legal status, informed opinion has been offered that a possible class action could be instituted against member states of the Organization for violating World Trade Organization policy on trade in services. And those OECD countries, the United States for instance, that have been signaling their intention to issue advisories against the financial centres in the region, should perhaps be reminded that it is the Caribbean that needs to be on the alert against the questionable practices of certain banking institutions of the industrialized North, the paper said in its December 28th edition.
Invitations to attend the Barbados meeting were extended to the governments of OECD and Commonwealth countries and to representatives of the IMF, the World Bank, the United Nations, the World Trade Organization, relevant regional organizations and the OECDís Development Assistance Committee, which co-ordinates the development aid of OECD countries. A parallel meeting will be organized on 15-16 February by Japan with the Pacific Islands Forum in Tokyo, for the Pacific jurisdictions on the OECDís June list.
Meantime, the BVI is expected to officially publish its response to the recommendations addressed to the territory in the KPMG Review of Financial Regulations in the Caribbean Overseas Territories and Bermuda, released October 20th, 2000 and also a timetable for implementation.