BASSETERRE, St. Kitts - WHAT does it really mean to be a small sovereign nation? Doesn’t the word sovereign means “one possessing or held to possess supreme political power”? Let’s be sovereign then, and hold the EU’s leadership accountable for reckless and unwarranted intimidation.
We teach people how to treat us – be it in personal or professional relationships. When someone comes incorrect, or condescends, this behaviour will continue until such time we simple say, ENOUGH!
Let’s get right to the point. The EU is having major economic challenges of their own and, as a result, they deploy a three-fold strategy.
Firstly, they create smoke screen pointing a finger in one hand, attempting to deflect world attention to their own Unions tax abuses with the other hand.
Secondly, they place arbitrary blame on Caribbean nations which abide to the letter and spirit in international transparency.
Thirdly, they attempt a literal shakedown, hoping to intimidate and bully compliance of their own Union members.
Shame on the EU!
Let’s take a closer look at their approach. I can only imagine the leadership in a dark room, smoking cigars, each with a cheesy and clever grin, “Boys, we must protect our privileged status and wealth, we worked damn hard for our top 1% status, we need to circle the wagons...Any ideas?”
A voice from a Frenchman can be heard, as he puffs on his cigar one can hear him say, “Let’s publish a blacklist of the worst international tax havens.” He continues: “Let’s throw down, let’s shake some trees and see who falls out.”
And so it begins…
And I quote from the official release, “An orchestrated crackdown on multinational companies and individuals attempting to avoid paying tax in the 28-nation federation.”
Who is listed? Thirty (30) territories including St. Kitts and Nevis, Andorra, Liechtenstein, Guernsey, Monaco, Mauritius, Liberia, Seychelles, Brunei, Hong Kong, Maldives, Cook Islands, Nauru, Niue, Marshall Islands, Vanuatu, Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Grenada, Montserrat, Panama, St. Vincent and the Grenadines, Turks and Caicos, and US Virgin Islands.
The fat-cat continues...
“We are today publishing the top 30 non-cooperative jurisdictions consisting of those countries or territories that feature on at least 10 member states’ blacklists,” EU Economic Affairs Commissioner Pierre Moscovici told a news conference.
The former French finance minister’s so-called reason? It is a “decisive step” designed to “push non-cooperative non-EU jurisdictions to be more cooperative and adopt international standards”.
Oh really?
This writer believes this to be an irresponsible and reckless move; a move that sovereign nations should respond in kind to by ignoring and banding together.
Enough!
Where is the EU’s accountability here? Precisely what factors qualify a nation to be blacklisted? No clear rationale has been offered. What evidence has been used to determine placement of a nation on this list? Only a reference that ‘we’ are on other blacklists?
Okay, so our Federation is listed, how does one ‘remove’ themselves from this bogus list?
When someone does something to harm another, there are consequences. An apology is a good start. Better yet, what is the EU prepared to do after our good name and nation has been economically harmed as direct result of being blacklisted?
Let’s take an even closer look now at statements issued in our defence.
In a statement issued on Thursday (Jun. 18), our Financial Secretary of St. Kitts-Nevis, Mrs Hilary Hazel outlined that in a recent Organisation of Economic Cooperation and Development (OECD) Global Forum peer review on the effectiveness in exchange of information, the Federation received an overall rating of Largely Compliant, which puts among the best performers internationally in the area of compliance.
Our Federation has an extensive tax information exchange treaty network with 25 countries, many of which are EU major economies.
SKN has been actively involved with the work of the OECD on tax transparency since 2001 and continues to be an active player on the sub-group of the OECD on Automatic Exchange of Information and Standard Setting. Our country also is a substantial contributor to the work of the OECD Global Forum Peer Review Group.
Other nations such as Cayman Islands are equally surprised and have issued their own statements. “The Cayman Islands Government is aware that the EU’s blacklist is based upon the individual, national blacklists of EU countries. However, we also are aware that major European economies, which have been rated similar to the Cayman Islands on upholding international standards on transparency, do not list our jurisdiction.”
So let’s consider the following:
1. The national blacklists that have resulted in this overall blacklisting are primarily generated by European countries that are not major economic trading partners with ST. Kitts and Nevis;
2. These countries therefore are most likely unaware of our Federations’ standards, both in terms of our bilateral and multilateral agreements for exchange of information;
3. Fairness. Blacklisting St. Kitts and Nevis downplays the significant strides made by our nation, as well as the significant global accomplishments in the area of transparency;
4. It is not clear what standards have been used by these 11 countries to come to such a conclusion; and
5. The very nature of this is demeaning and disrespectful, in that we must take a defensive posture to begin with.
What might REALLY be happening here is that publication of this list is actually an attempt to cover up failures within the EU’s house in matters of tax avoidance.
You heard correctly, they are in the midst of their own scandal, known as “LuxLeaks”.
The EU is attracting unwanted exposure within the tiny EU state of Luxembourg, which managed to save billions of tax dollars for some of the world’s largest brands such as IKEA, Apple, Starbucks and Pepsi.
Billions of dollars in tax avoidance? You read correctly. Billions!
The scandal in Luxembourg must be embarrassing for Jean-Claude Juncker, the head of the European Commission.
Could this also be nothing more than a shakedown?
Instead of managing for growth and innovation within their own European Union, do they now wish to exert control and power as the global economy encounters real and imminent threats?
So what is the global financial market looking like today?
Well, there exists the following:
Rising volatility as new technology such as high-frequency trading, stronger regulation of the traditional banking sector and the changing makeup of market participants are creating new vulnerabilities;
Deflation and bad loans as policymakers in EU have relied too heavily on quantitative easing and policies that fail to address at-risk loans and failure in overhauling their own economies to make them more competitive; and
Oil prices are plummeting as oil companies and their creditors are facing losses on their cash-intense investments in production. Many companies with the EU are finding it increasingly hard to pay their debts.
In other words, our beloved St. Kitts and Nevis has its own worries, threats and opportunities to protect and manage our nation’s wealth. We simply don’t need a bully of the stature of the EU playing games with our economy!
Enough!
Wouldn’t it be better if the EU was just more honest about their true motives rather than cast an unfair shadow over our nation?
Shouldn’t we be and act 'sovereign'? Shouldn’t we send a message as a nation, banding with our Caribbean neighbours to just shove off?
I’m tired of catching colds over and over again as big bullies sneeze all over the Caribbean. This writer hopes for the day when we band together with our Caribbean neighbours for greater economic security and strength.
Isn’t it about time we BE the sovereign nation we have suffered and sacrificed to become? Let's stand together and demand the EU apologises and come correct.
Jean-Claude Juncker! Stop throwing stones from your glass house.
Disclaimer
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