BASSETERRE, St. Kitts – ADDRESSING issues confronting the region’s Financial Services sector has been the latest move by the Organization of Eastern Caribbean States (OECS) to meet requirements set out by the Organisation for Economic Cooperation and Development (OECD).
A newly-established group by the OECS to tackle the issue is comprised of representatives from the Ministries of Finance and Financial Services Regulatory Agencies in the member states. One of the group’s primary objectives is to devise a systemic, tactical approach to collectively address OECD requirements before March 2010.
In early April of 2009, global leaders agreed to introduce sanctions on “secretive” tax havens around the world, resulting in the 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 the list, while only two Caribbean islands, Barbados and the US Virgin Islands, were seen by the OECD as substantially implementing the standards.
According to the OECS Secretariat in a recent press statement, the financial services sector is increasingly becoming a “major pillar of economic development” but the move by the OECD has posed a threat to the viability of the sector through increased scrutiny.
OECS Member States have committed to comply with the OECD requirements, according to OECS Economic Affairs Division Programme Officer Dr. Loraine Nicholas, but in spite of such efforts they were still ‘grey listed’ by the international financial body.
“This list comprised countries deemed by the OECD to have committed to its standards and approaches, but had not yet taken the full range of actions required to give complete expression to that commitment. A key basis for this conclusion was the limited number of Tax Information Exchange Agreements (TIEAs) between OECS Member States and other countries.
“Since the grey listing of OECS countries, most of them have taken the initiative to establish TIEAs with OECD member countries, in light of a March 2010 deadline when the OECD will revise its listing of countries,” she quoted in the release.
Since talks of OECD ‘grey listing’ hit the nation, St. Kitts-Nevis has reached tax agreements with Monaco, the Netherlands, the Netherlands Antilles, Aruba, Denmark, New Zealand and Liechtenstein. The nation now needs only four additional TIEAs to be signed to join Barbados and the USVI on the OECD’s white list.
TIEAs allow the signing parties to request tax information from each other for the purposes of tax investigations. Information may include banking data and information on ownership of companies and trusts.
