Wednesday, December 23, 2009

PM says SVG seeking to get off OECD grey list

KINGSTOWN, St. Vincent, CMC – Prime Minister Dr. Ralph Gonsalves says St. Vincent and the Grenadines is on course to meet a March 31, 2010 deadline set by the Organisation for Economic Co-operation and Development (OECD).
The OECD wants offshore financial jurisdictions, including those in the Caribbean, to establish information tax exchange agreements (TIEAs) with a minimum of 12 countries in order to have their names removed from the OECD grey list.

Gonsalves said that over the past few months, his administration has been engaged in intensive bilateral negotiations with the OECD to implement the internationally required measures.
“At present we have established TIEAs with seven countries, Aruba, Austria, Denmark, Liechtenstein, The Kingdom of the Netherlands, and the Netherland Antilles,” Gonsalves said, adding that discussions were now taking place with Australia, Germany, Ireland, New Zealand, The United Kingdom and the Nordic Alliance.

"By March 31, 2010, countries on the grey list, which have made no or unsubstantial progress, will be dropped to the blacklist and are likely to be subjected to sanctions from the OECD," Gonsalves said, emphasising that the TIEAs must be in accordance with the OECD suggested templates.

The Prime Minister said that being placed on the OECD blacklist between 2000 and 2003 had affected the country's accounting system, including banking relations.

As we don't have corresponding bank relations with the United States to operate as a bank in this hemisphere, you are essentially operating as a savings bank because you are not going to have the extent of the commercial transactions.

So that while we are seeking to make money on the international financial services sector, we have at the same time, --however much it is offensive to us and to our independence and sovereignty--, we have to fall in line and do certain things as a practical matter to make some money and the space and at the same time to hold our indigenous banking sector in some viable way in a sustainable manner‚

In a 2000 report, the OECD identified a number of jurisdictions as tax havens which it said modified their tax laws to attract foreign capital as well as allowing foreigners to establish subsidiaries to evade or avoid the tax laws or regulations of other jurisdictions.

The OECD Global progress report of 19 December 2009, showed that Antigua and Barbuda and Barbados were among the jurisdictions that have implemented the internationally agreed tax standard while Anguilla, the Bahamas, Belize, Dominica, Grenada, Montserrat, St. Kitts/Nevis, St. Lucia and St. Vincent and the Grenadines have indicated their commitment to the standard.