Blacklisting of SVG is unjust – FSA

The Financial Services Authority (FSA) in St Vincent and the Grenadines (SVG) considers the present blacklisting of this country by the European Union Commission to be “arbitrary and not supported by any objective or transparent process.”

On June 17, 2015, the EU blacklisted 30 countries worldwide as “tax havens”. Of these 30 countries, 14, including SVG were Caribbean countries.{{more}}

According to a June 20 article in Jamaica Observer, the blacklist claims to be part of a plan for tackling corporate tax avoidance and ending the practice of sweet deals for multinational companies.

“The plan aims to make sure that multinationals pay taxes where they generate profits, that tax rules in one country do not penalize others, and that honest businesses don’t lose out to unscrupulous competitors,” the article said.

In the article, EU’s top tax official, Pierre Moscovici urged countries to quickly adopt agreed international standards to fight against tax evasion.

“Our citizens can no longer tolerate that certain companies, often the most prosperous, avoid fair tax contributions and that certain tax regimes encourage them on this path,” Moscovici said.

However the release from the FSA described the blacklisting as unjust and an abuse of process and power, particularly since this country has amended its laws and implemented a tax information exchange system to conform to international standards. It was also noted that St Vincent and the Grenadines has built a successful tax information exchange regime.

As a member of the Organization for Economic Cooperation and Development (OECD) Global Forum since 2009, the FSA in their release highlighted that this multi-island state has been and is subjected to ther organization’s international standards and assessment and that a two-phase Peer Review Assessment was also conducted in this country.

“St. Vincent and the Grenadines intends to object to this blacklisting on an individual basis and from a unified Caribbean front,” the release stated.

“Of absolute significance is that St Vincent and the Grenadines has already been assessed as NOT being a tax haven by the OECD, the responsible international body for international tax compliance purposes. SVG is also very much ‘white listed’ by the OECD, having very successfully completed its mandatory 2 phased assessments (Phase 1 and 2 Peer Reviews). St Vincent and the Grenadines is rated ‘Largely Compliant’ by the OECD Global Forum in relation to its tax compliance regime, which is globally accepted as a very positive rating.”

The FSA also took the opportunity to point out that with the exception of this recent EU blacklisting, St Vincent and the Grenadines is on no other international sanction list.

Other Caribbean countries on the EU blacklist of countries operating as tax havens include Anguilla, Antigua and Barbuda, The Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Grenada, Montserrat , Panama, St Kitts and Nevis, Turks and Caicos and the US Virgin Islands.