KINGSTOWN, St. Vincent – This country was on Feb. 16 removed from a French blacklist of non-cooperative tax jurisdictions.
Prime Minister Dr. Ralph Gonsalves told Parliament yesterday that France’s placing St. Vincent and the Grenadines (SVG) on the blacklist was unilateral since the Organisation for Economic Co-operation and Development (OECD) in 2010 declared this country as “clean”.
“The Ministry of Finance of St. Vincent and the Grenadines welcomes the removal from the French blacklist of tax havens as it considers that there was no merit in placing St. Vincent and he Grenadines on such a list in the first place,” he told lawmakers during a ministerial statement.
In 2010, France “blacklisted” 18 countries around the world as being uncooperative tax havens and advised that it would be imposing punitive taxes on French companies operating in these jurisdictions.
SVG was among nine Caribbean countries blacklisted. The others were Anguilla, Antigua and Barbuda, Belize, Dominica, Montserrat, St. Kitts and Nevis, St. Lucia, and Grenada.
France’s move followed an initiative by the OECD, the international body with oversight of international tax transparency, which places country’s on “black”, “grey”, or “white” lists deepening on their level of cooperation, Gonsalves said.
He said that France is a member of the OECD and its action to compile its own blacklist was unilateral and separate from the action taken by the OECD
SVG, like several other Caribbean countries, was grey listed in April 2009 as being a country which has committed to the international tax standard of transparency but which had not demonstrated its commitment. But the country was removed from the list less than a year after as it had completed the requisite number of Tax Information Exchange Agreements (TIEAs) — over 12 — to illustrate its commitment to tax transparency and exchange.
SVG and France signed a tax information exchange agreement in April 2010 and by July 2010 SVG had completed internal procedures for the enforcement of the agreement.
“France ‘blacklisted’ St. Vincent and the Grenadines when negotiation had already commenced and were on-going between both countries for the establishment of a TIEA,” Gonsalves said.
He said that while SVG has no history of being uncooperative with France it appears to have been blacklisted because of its international financial services industry.
“St. Vincent and the Grenadines, at this time, would have already completed 18 TIEAs, more than the number required to meet the international standards,” Gonsalves further said.
In March 2010, Gonsalves, who is also Minister of Finance, wrote to the French President and Minister of Finance requesting that SVG be removed from the blacklist. But SVG remained on the French blacklist even though the OECD had white-listed SVG since that same month.
“France has now officially acknowledged that St. Vincent and the Grenadines can be removed from its blacklist,” Gonsalves said, noting that his country in November 2011 enacted international tax cooperation and information exchange legislation.
“It appears as though the left hand in France did not know what the right hand was doing and this is why we ended up on their so-called blacklist,” Gonsalves said.