BARBADOS: Invest Barbados stands by its criticism of EU Blacklisting amid claims it misunderstood the issue.

As published on barbadostoday.bb, Wednesday 4 November, 2020.

Invest Barbados has rubbished claims by a European Union (EU) official that there are “unfounded concerns” and misconceptions about the island’s inclusion on the EU’s list of “non-cooperative jurisdictions for tax purposes”.

The economic development agency said in a clear-the-air statement on Tuesday, that as far as he was aware the EU took a hard-line approach to “blacklist” Barbados when it was well aware the country had no legislative deficiencies that should result in such an action.

In addition, it emphatically denied that Barbados had an issue with the Organisation for Economic Co-operation and Development (OECD) Global Forum on Transparency and Exchange of Information for Tax Purposes’ assessment, which was separate and apart from the EU list.

Invest Barbados was responding to recent claims by the EU’s Regional Cooperation and Trade Support Team Leader Felipe de la Mota, who said last Thursday that there was “confusion or misconceptions” surrounding the issue.

“I think this is an issue where we are hearing a lot of maybe misconceptions; maybe some founded, but also unfounded concerns,” he said.

“The timing of the conformity for non-compliant tax jurisdictions was set by the Global Forum itself in April and the EU listing merely reflected that inevitably, then it is, of course, ready to continue assess the progress and take countries off the list when needed, when the Global Forum deems it so. So, ultimately it is a question of a lot of misconceptions around who is putting together these lists and when and why,” he said, adding that the COVID-19 pandemic had nothing to do with it.

At the time, Filipe was addressing a joint University of the West Indies (UWI) and European University Institute (EUI) online dialogue on the topic COVID-19 and Trade: Sharing the Experiences of the Caribbean and Europe.

Responding to Filipe’s comments on Tuesday, Invest Barbados said it wanted to “state categorically that the timeline of the Global Forum assessment was never in dispute”.

“Further, it must be highlighted that the Global Forum did not ‘blacklist’ Barbados nor impose any defensive measures and/or sanctions,” said Invest Barbados in a statement.

Barbados made required changes to its tax exchange framework by December 2019, but that did not meet the Global Forum’s deadline for the review period which was July 2015 to June 2018. As a result, the Global Forum placed the island on its list of “partially compliant” jurisdictions.

Following this, the EU placed Barbados on its list of “non-cooperative jurisdictions for tax purposes”, also known as a “blacklist”, and kept the country on that blacklist released in early October.

Invest Barbados said it was aware that the Global Forum did not determine the EU’s listing or listing exercise, but rather the Code of Conduct Group, after receiving assessments from the technical arm, the Directorate General Taxation and Customs Union (DG TAXUD), and then making recommendations to the Council of Ministers who then make the ultimate decision.

“Barbados was of the opinion that, since the EU Criteria 1.2 stated that ‘jurisdictions should possess at least a Largely Compliant (LC) rating’, given the circumstances of our Partially Compliant rating and other present global health and economic factors, that good reason would suggest that if the EU wanted to list Barbados, then placing us on the monitoring ‘grey list’ was the reasonable approach,” said Invest Barbados.

“Instead, the EU took the hard-line approach to negatively list Barbados, all of which had nothing to do with the Global Forum or its process. Barbados therefore has no misconceptions of its understanding of the EU and its modus operandi,” it added.

The agency, which is tasked with attracting global business to Barbados, further pointed out that EU representatives were present in Luxembourg at the Global Forum meeting in February this year, when Barbados’ report was presented.

“The EU was therefore aware of all that transpired at the meeting, particularly the acknowledgement that Barbados had no legislative deficiencies,” it said.

“The EU has developed its own criteria separate and apart from that of the Global Forum and chooses to rely on the Global Forum report as and when it suits the EU’s purposes,” Invest Barbados said in its hard-hitting response.

It said that cognisant of this fact, Barbados, through the Ministry of International Business and Industry, initiated discussions with the DG TAXUD and then the Chair of the Code of Conduct Group “in order to reiterate that not only was Barbados legislatively compliant in accordance with the Global Forum’s Exchange of Information on Request standard, but that we were well on the way to demonstrating effectiveness and, as such, would be seeking a supplementary review by the Global Forum in short order”.

When the EU left Barbados on its “blacklist” last month, Invest Barbados had described the move as “unjust, disproportionate and reprehensible”, adding that the EU was penalising the jurisdiction and ignoring all the work that had been done by the Government to correct any remaining deficiencies.

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