ST. LUCIA – The Caribbean Association of Banks Inc. (CAB) is expressing deep concern over yet another tax-haven list which includes 15 Commonwealth Caribbean countries, and it’s calling for them all to be removed.

 

The list appears within the District of Columbia’s 2015 Budget Support Act – which expands the definition of tax haven -, due to be passed by the US Congress.

 

The St. Lucia-based CAB said in a statement issued yesterday that while it fully supports the District of Columbia’s efforts to combat tax evasion, the designation of Caribbean territories as tax havens is prejudicial.

 

“It must be highlighted that this inaccurate description of Caribbean territories has already had and could have even further-reaching effects on the Caribbean’s financial services sector as well as the economies. Indigenous banks in the region are currently being challenged with the threat of loss of correspondent banking relationships which are provided by international banks,” it said.

 

“The DC 2015 Budget Support Act’s “black list” may serve to exacerbate the perception of our region as a high risk area and consequently, negatively impact the Risk Rating profile of financial institutions by correspondent banks.”

 

It added: “The CAB is unable to understand the justification for identifying these countries as tax havens and has written to the District of Columbia Mayor Muriel Bowser (also copied to 13 Council members) and key members of Congress (Chairman and Ranking Members of both the House Appropriations Committee and the Subcommittee on Financial Services) urging them to remove the names of the Caribbean countries from this listing of tax havens as defined.

 

The association noted that the Caribbean countries were being labelled tax havens even though: the Organization for Economic Co-operation and Development (OECD) and the Global Forum on Transparency and Exchange of Information for Tax Purposes have confirmed that all members of the Caribbean Community and Common Market (CARICOM) are fully or largely compliant and have committed to Automatic Exchange of Information (AEOI); none of the CARICOM countries listed in the Act are on the Financial Action Task Force (FATF) AML/CFT Strategic Deficiencies Lists; all of the CARICOM territories listed in the Act have cooperated with the US Internal Revenue Service through the US Foreign Account Tax Compliant Act (FATCA) and (with the exception of one) are listed as either having a signed intergovernmental agreement (IGA) or being treated as having an IGA in effect; and all CAB member banks and financial services institutions have mechanisms in place to satisfy FATCA requirements.

 

“Additionally, the CAB as part of its mandate, works very closely with its members to ensure compliance, training and other measures are satisfactorily in place with respect to regulatory, legislative and other matters of such nature,” it said.

 

The regional body said it would monitor the current situation very closely.