BASSETERRE, St. Kitts – FOLLOWING last week’s meeting of Commonwealth ministers of finance in Cyprus, St. Kitts-Nevis’ Minister of Finance Hon. Dr. Timothy Harris has appealed to the World Bank for small state assistance in the regulation of financial institutions.
Harris, joined by Director General of the OECS Secretariat Dr. Len Ishmael and Deputy Financial Secretary Calvin Edwards, made his presentation in a meeting of small states in Istanbul, Turkey on Saturday (Oct. 3).
In the address, Harris requested that World Bank President Robert Zoellick monitor the concerns of small island states respecting the G-20 efforts to regulate international financial centres.
“Small states shared the concern of the G-20 over issues of money laundering, illicit transactions and tax evasion,” Harris said.
“However, in seeking greater transparency and accountability we ought to be careful not to be overly punitive. Neither should the application of any rules undermine the efforts of small states to diversify their economy and attract legitimate foreign direct investment.”
After April’s G20 Summit in London, global leaders agreed to introduce sanctions on “secretive” tax havens around the world, resulting in the Organization for Economic Cooperation and Development (OECD) publishing a list of 30 countries that have committed to their tax standard, but have not substantially implemented it.
St. Kitts-Nevis was named among the non-compliant countries on that list.
In mid-April, Harris informed that the Federal government is displeased to be on the list, adding that such decisions have been continually made with little to no input from the region.
He argued that the requirement for the listed countries to sign 12 tax information exchange agreements with OECD member states reflected an “asymmetric power relationship” between small states and the OECD. He stressed that there was no obligation for OECD countries to sign within a definite time after the request was made.
“Small states had a capacity deficit in negotiating these requirements and sought the commitment of the World Bank to provide technical assistance/capacity building support in this area.
“In the absence of double taxation agreements, foreign investors faced the challenge of double taxation in their country of origin and this would be a disincentive to investment,” Harris stated, adding that the World Bank should assist small states in joining the double taxation network.
Details regarding the outcome of the meeting are expected to follow shortly.
