Caricom fears resurgence of ‘tax haven’ label for Caribbean

The Caribbean Community (Caricom) has expressed concern that the designation of “tax havens” is again being attached to the financial services centres in member states and associate members, following the leak of the “Panama Papers”.
The Community, in a statement, said the loose attribution of the tax haven label ignores the reality that the regulation of this sector in Caricom was fully compliant with international standards.  The statement identified international standards that Caricom members and associate members were committed to and were in compliance with. Caricom said as more disclosures unfolded from the “Panama Papers” leak, it urged caution by those making the unjust labelling of the Community’s financial services centres.
“Indeed, all Caricom member states and associate members are committed to, and are in compliance with, the international certification process of the IMF/World Bank Financial Sector Assessment Programme (FSAP); the Global Forum of the Organisation for Economic Cooperation and Development (OECD); the Financial Action Task Force and the Caribbean Financial Action Task Force (CFATF).  Bilateral commitments have also been made under the United States implementation regime for the Foreign Account Tax Compliance Act (FATCA),” the regional body had said in a statement recently.
Guyana is among several Caricom member states, whose nationals have been implicated in the leak. Other Caribbean nations also mentioned include Suriname, from where six ‘shareholders’ hail; Trinidad, which is “connected” to six companies, three clients, one beneficiary and 15 shareholders and Barbados with links to 34 companies, 12 clients, five beneficiaries, and 34 shareholders.
The leak has revealed damning information about Heads of States, the elite, business moguls and other parties who were clients of the secretive law firm Mossack Fonseca that created offshore bank accounts to hide their wealth, possibly allowing them to avoid paying their taxes. The International Consortium of Investigative Journalism (ICIJ), located in Washington, said the leaked data spanned nearly 40 years from 1977 through the end of 2015, allowing “a never-before-seen view inside the offshore world – providing a day-to-day, decade-to-decade look at how dark money flows through the global financial system, breeding crime and stripping national treasuries of tax revenues”.
Twelve national leaders are among 143 politicians, their families and close associates from around the world known to have been using offshore tax havens. Most popular among them are Russian President Vladimir Putin who has a US billion trail leading to him by way of his best friend Sergei Roldugin, who allegedly siphoned off the monies from the Russian State bank into a hidden offshore account.
The national leaders with offshore wealth also include Nawaz Sharif, Pakistan’s Prime Minister; Ayad Allawi, ex-interim Prime Minister and former Vice President of Iraq; Petro Poroshenko, President of Ukraine; Alaa Mubarak, son of Egypt’s former President; and the former Prime Minister of Iceland, Sigmundur Gunnlaugsson, who resigned after the news broke.
The “Panama Papers” reported that the law firm has over 3000 clients in the US and 9000 in the United Kingdom, in addition to other countries. The paper showed a map which highlighted the different countries the law firm’s clientele hailed from, including Guyana, Venezuela, Brazil and other South American countries.
It is too early to know the full extent of the scandal since out of the 11.5 million documents only 154 are in the public domain.