On Tuesday, European Union finance ministers adopted a blacklist of tax havens that included five countries in the wider Caribbean: Barbados, Grenada, Panama, Saint Lucia, and Trinidad and Tobago seen as not cooperative on tax matters.
According to the ministry of finance in Grenada, the reason put forward for Grenada being included on the list was that the country has not signed and ratified the OECD Multilateral Convention on Mutual Administrative Assistance as amended and did not clearly commit to addressing these issues by December 31, 2018.
However, the ministry admitted that “inadvertently, Grenada did not provide a timeline for signing the OECD Multilateral Convention on Mutual Administrative Assistance”.
The minister of finance has accordingly now written specifying Grenada’s commitment to sign the OECD convention by December 31, 2018, and requesting that Grenada be de-listed.
Panama, which has been in the spotlight since the Panama Papers revelations, immediately called its ambassador to the EU back home for consultations.
“This is a regrettable decision,” President Juan Carlos Varela told reporters. “We feel this is an unfair measure.”
His economy and finance minister, Dulcidio De La Guardia, said on Twitter: “I reject the arbitrary and discriminatory inclusion of Panama on the European Union tax havens list.”
In contrast, prime minister of Saint Lucia, Allen Chastanet, said he was waiting for the letter that accompanies being put on the blacklist so that he could clearly understand what the timelines that have been set out are.
“So before I say anything other than that, I need to be able to wait for the letter to be able to react,” Chastanet said.
Saint Lucian commentator, Melanius Alphonse, highlighted the government’s failure to take meaningful action to address identified deficiencies or engage in a meaningful dialogue with the EU.
“Along with Saint Lucia’s fiscal dilemma and political problems, the EU placing Saint Lucia on the black list for ‘failed criteria’ is indicative of the void in leadership,” he said.
No official word has been forthcoming from Barbados or Trinidad and Tobago.
The Cayman Islands, which dodged the blacklist, was placed on a “grey-list” of more than 40 other countries that have agreed to take steps toward “abolishing harmful tax practices”.
Cayman Finance, the private sector organisation established to promote the Cayman Islands financial sector, said it has worked hard with the Cayman Islands government to address the concerns the European Union has raised.
“We are confident that we will be able to address the areas where the EU requires some further clarification,” Cayman Finance said.