17/10/22

GLOBAL REGULATION: T&T should push back against EU for blacklisting, says Caribbean economist.

As published on guardian.co.tt, Sunday 16 October, 2022.

A call has been made for the government of T&To to challenge the European Union’s decision to list the country as a non-cooperative tax state.

The Council of the European Union recently released its conclusions on the revised EU list of non-cooperative jurisdictions for tax purpose.

In it, it stated the following for T&T:

“T&T does not apply any automatic exchange of financial information, does not have a rating of at least Largely Compliant by the Global Forum on Transparency and Exchange of Information for Tax Purposes for Exchange of Information on Request, has not signed and ratified the OECD Multilateral Convention on Mutual Administrative Assistance as amended, has harmful preferential tax regimes (Free Zones), and has not resolved these issues yet.

A call has been made for the government of T&To to challenge the European Union’s decision to list the country as a non-cooperative tax state.

The Council of the European Union recently released its conclusions on the revised EU list of non-cooperative jurisdictions for tax purpose.

In it, it stated the following for T&T:

“T&T does not apply any automatic exchange of financial information, does not have a rating of at least Largely Compliant by the Global Forum on Transparency and Exchange of Information for Tax Purposes for Exchange of Information on Request, has not signed and ratified the OECD Multilateral Convention on Mutual Administrative Assistance as amended, has harmful preferential tax regimes (Free Zones), and has not resolved these issues yet.

The Business Guardian reached out to the Bankers Association of T&T for further clarification on the impact on the sector and what could be done to improve the situation. BATT’s response was brief.

The association said, “T&T has been on the EU list of Non-Cooperative jurisdictions for tax purposes since the list’s inception in December 2017.”

BATT continued, “Members of the Bankers Association of T&T (BATT) continue to work with our clients and our respective correspondent relationships to minimise any impact to local business operations, both from a banking and a client perspective.”

Dukharan also pointed out that according to various reports, the actions taken by the EU were counter-productive in terms of addressing tax evasion and money laundering.

She noted there appeared to be a lack of transparency in the EU Blacklisting process, as she again noted international media reports which suggested that it regularly overlooked tax evasion within EU member states.

“Why would anyone even pay attention to, let alone treat the EU and their blacklists as credible, therefore? I don’t think the authorities in T&T or any EU-blacklisted country should pay any attention whatsoever to the EU’s farcical blacklists. Yes, being blacklisted has negative consequences for our economy, but so do some of the ever-changing, unilaterally, unfairly and disproportionately imposed compliance requirements from the EU (which they have no authority to impose and which their own member states do not comply with). If more blacklisted countries stood up to the EU, shouted about the injustice and hypocrisy of the EU’s actions, then maybe we would not be in this position,” said Dukharan.

The economist argued had she been in a position of power in T&T she would have rebuked the EU and their blacklists in the strongest possible terms and written a formal complaint to the United Nations concerning the “unfair and indefensible” EU blacklisting of the country.

Dukharan also explained she would also consider asking the EU ambassador to leave our shores and would refuse EU “gifts” of aid, which she said only served to make countries more dependent on European countries.

She said, “These would be the only actions I would take in this matter, and these are the only actions I would support from the authorities of my country and any EU-blacklisted country in this matter.”

Dukharan noted that while T&T has been on the list for several years, it had done little to call out the EU’s stance.

She said, “the only countries on earth that are double blacklisted by the EU, are T&T and Vanuatu. Yet T&T’s silence on this matter is deafening. Vanuatu has been pushing back hard.”

In September, Barbados Prime Minister Mia Mottley testified in Washington DC on the impact of de-risking in the Caribbean before US Congresswoman Maxine Waters, Chairman of the House Committee on Financial Services.

During the testimony, which was attended by Prime Minister Dr Keith Rowley, the Barbadian Prime Minister similarly argued the blacklisting of Caribbean banks did little to deter major money laundering and fraud while simply punishing smaller states and stifling trade in those regions.

The Business Guardian sent questions to a representative at EU Council concerning the EU list of non-cooperative jurisdictions for tax purposes, but did not get a response up to the time of publication.