Blacklisting Of Bvi And Most Caribbean Financial Centers Deemed Uninformed & Unfair


OECD-CRITICISEDThe British Virgin Islands and a number of other Caribbean jurisdictions are crying foul over the decision of the European Union (EU) Commission to add them to the recently released list of blacklisted countries.

The concerning blacklist was issued on June on 17 with the announced purpose of identifying non-EU countries that have non-compliant tax practices.

However, the list was met with criticisms and deemed unfair because the Territory continues to strive to remain in sync with regulations and requirements from international agencies. Therefore it was an expressed concern that the Territory was placed on a list which was reportedly created to identify countries that lack compliance with transparency and exchange of information standards.

The list includes 30 financial services jurisdictions. With the exception of Dominica all of the Caribbean financial services jurisdictions have been blacklisted.  The list includes: Anguilla, Antigua and Barbuda, The Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Grenada, Montserrat, Panama, St Vincent and the Grenadines, St Kitts and Nevis, Turks and Caicos, and US Virgin Islands.

It was reported that in order for the countries to end up on said list they had to be suggested by at least ten EU member countries. However, it was noted that the United Kingdom, Sweden and Germany did not identify any country for the list.   

Government Responds  

During his remarks at the 23 June swearing in ceremony Premier Dr. The  Hon. D. Orlando Smith described the EU list as old news and said that it was “a list of all the countries that were blacklisted by all the countries in Europe over the past number of years.”

Last week, the Government of the British Virgin Islands (BVI) in a statement following the release of the list stated that it is disappointed with the European Commission’s decision to publish a communiqué and an accompanying annex that seems to suggest that the BVI is a non-cooperative tax jurisdiction.

“The BVI has a long track-record of meeting the highest international standards in international cooperation, regulation and transparency, and continues to do so today. These efforts have been recognized by the governments of several G8 and G20 countries, and the BVI has met the standards set by international organizations such as the International Monetary Fund (IMF), Financial Action Task Force (FATF) and the Organization for Economic Co-operation and Development (OECD),” the release stated.

“It is unclear to the BVI what standard was used as a basis for this publication save for lists of member state countries that are in many cases outdated and it is not clear whether any of the foregoing was considered. The BVI is hopeful that the European Commission will withdraw this publication or correct inaccurate perceptions related to it and encourages its member states to update their respective country lists with an understanding of the actions taken, and commitment demonstrated by the BVI towards international cooperation and tax transparency,” the release stated.  

Countries Refute OECD Criteria  

Many of the countries on the list responded with outrage that they were added to the list albeit they have adhered to the standards of the OECD and other bodies. Among the countries critical of the list are sister British Overseas Territories Bermuda, and Cayman Islands.

In a press release that was published on 18 June Bermuda’s Deputy Premier and Minister of Finance, Bob Richards said: “A closer scrutiny of this latest development reveals something wrong with this process.”

“To be included on this new “uncooperative” list, one would have to be “black-listed” by 10 or more EU member states – not 9, 8, 7 or 6. Why they used 10 speaks to a lack of transparency…Not all EU members agree on how they compile their blacklists. Some are based on a combination of tax transparency concerns and low tax rates; others are triggered by low tax rates alone, and some are triggered by a lack of a tax information exchange agreements,” he added.

In a short statement that was issued after the release of the EU Commission’s list, Financial Services Minister of the Cayman Islands,Wayne Panton said: “It is unfortunate that the EU blacklist unfairly downplays the significant strides made by Cayman, as well as the significant global accomplishments in the area of transparency.”

Since the release of the EU list persons knowledgeable of the industry have weighed in on the matter. One such person was Sir Ronald Sanders, who was Antigua and Barbuda’s Ambassador in negotiations with the Organisation for Economic Cooperation and Development (OECD) on its “Harmful Tax Competition” scheme.

Sir Ronald on 19 June 19 said that “in naming 30 countries as the “top tax havens in the world”, the European Union (EU) appears to “playing dice” with the reputations of countries, 12 of which are Commonwealth independent small states in the Caribbean, the Pacific and the Indian Ocean.”