Caribbean Regulatory Havens Could Be Blacklisted Also

Already under pressure from larger nations cracking down on so-called tax havens, Caribbean nations are now being put on warning that they face blacklisting and sanctions if their financial regulations aren’t made strong enough as well. And they have only six months to do it.

The caution has been issued by Britain’s Chancellor of the Exchequer Alistair Darling, as he spoke to various media houses ahead of a meeting of finance officials from the G7 nations and the International Monetary Fund’s semiannual meeting which began yesterday in Turkey.

“Just as we want to go after tax havens, we want to go after regulatory havens as well,” Darling said. “It is not good for financial stability that some companies can operate out of a Caribbean island and shelter behind a veil of secrecy, and we don’t know what they are up to.”

“If you don’t comply you get until March next year, then you will be blacklisted,” he said in another interview.

Darling wants to see sanctions taken against not only countries that do not have strong enough regulatory regimes, but those UK-based companies that do business in those blacklisted countries.

He revealed that when G20 finance ministers meet in November, the group’s Financial Stability Board would prepare a provisional blacklist of regulatory havens, as a grey list of countries that also should tighten standards.  

The move is similar to what the G20 nations did in April when the Organisation for Economic Cooperation and Development (OECD) published a list of so-called tax havens, categorising jurisdictions in three categories: the white list of those that have substantially implemented the internationally agreed tax standard; a grey list of those who had made commitments to, but had not yet fully complied; and a blacklist of countries which have not committed to the standard.

None of the Caribbean’s countries was blacklisted, but the vast majority included in the grey list. Barbados was the only country in the region that was on the white list at that time.

Several others have since signed tax information exchange agreements (TIEAs) with more OECD member nations in an effort to be promoted to the white list.

The OECD requires countries to sign at least 12 TIEAs in order to be placed in that category.


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