Regional banks concerned over EU ‘blacklist’

Notwithstanding that the European Union has now clarified that the final decision, regarding which countries should be on the list, has not been made; it must be highlighted that the timing of this publication and its general perception as a new “black list” could have far-reaching effects on the Caribbean’s financial services sector.

Indigenous banks in the region are currently being challenged with the threat of loss of correspondent banking relationships which are provided by international banks. An additional “black list”, based on unclear criteria, 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.

The financial services industry cannot survive without correspondent banking relationships and as a result, neither can our economies.

The CAB is pleased to note the response of the Organisation for Economic Co-operation and Development (OECD) and the Global Forum on Transparency and Exchange of Information for TaxPurposes which confirms that: “the only agreeable assessment of countries as regards their cooperation is made by the Global Forum and that a number of countries identified in the EU exercise are either fully or largely compliant and have committed to AEOI (Automatic Exchange of Information), sometimes even as early adopters”

It is noteworthy that the eight CARICOM countries and five associated members which are named in the EU’s report, are all included in the OECD’s list of members who have committed to Automatic Exchange of Information.

The CAB therefore calls upon the EU to carefully review the criteria used by its member states to assess and determine the countries that are non-compliant in tax matters. Additionally, the CAB strongly recommends greater collaboration between the EU, the OECD and the Global Forum on Transparency and Exchange of Information for Tax Purposes before “Black List” reports are issued.

The CAB also urges regional governments to act together to ensure that the region is represented in such key decision-making processes which can impact the growth and development of our economies.


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