Ambassador Mikael Barfod.
Ambassador Mikael Barfod.

BRIDGETOWN, Barbados (CMC) — The Head of the European Union Delegation to Barbados and the Eastern Caribbean, Mikael Barfod, has once more sought to defend the decision of Europe to list a number of Caribbean countries s tax havens.

In an Op-ed released on Tuesday, Barfod noted that since the publication of the list of uncooperative tax jurisdictions by the European Commission on June 17, there has understandably been reaction in the region.

“While recognising the common objective of fighting bad tax practices, the process has been seen by some of those named as an embarrassment, not least for a country such as Barbados which is currently a Vice Chair of the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes.

“I am aware that a number of Caribbean countries have made major efforts to comply with international standards and improve their image as tax havens. The EU is not insensitive to the plight of Caribbean countries that have had to endure one of the worst financial crises ever.

“I would like to express our appreciation for the continued efforts Caribbean countries are making internationally in the area of taxation, as evidenced by their co-operation with the OECD Global Forum. As a result, most CARICOM countries are rated as “largely compliant.

“This is a good international rating. In fact, it is the same rating that some of the EU States received.”

(Read full Op-ed)

On Monday, the leaders of the Organisation of Eastern Caribbean States (OECS) criticised the European Union over its decision to black list several Caribbean countries as tax havens.

In addition, the leaders of Antigua and Barbuda, Dominica, Grenada, St. Lucia, St. Vincent and the Grenadines, Montserrat, St. Kitts-Nevis Anguilla, the British Virgin Islands and the French island of Martinique, who met here on Monday, also agreed that the issue would be further discussed at the Caribbean Community (CARICOM) summit that opens in Barbados on Thursday.

“We said we are going to aggressively pursue getting this thing to be removed. It is not a positive assessment so therefore it is something we must move to get rid off and that’s why collectively we are going to do whatever we have to do and we are taking our case to the CARICOM region, because Barbados was also named,” said OECS chairman and host prime minister, Keith Mitchell.

“Historically Barbados is known as the most compliant country in the Caribbean, so having Barbados on the list makes the thing even more ridiculous,” he added.

“It is a big surprise, the methodology used in assessing those countries is quite flawed and in fact I believe today it is more an embarrassment to the European Union than the original statement that they made. It is a big embarrassment to them,” Mitchell told reporters at the end of the summit on Monday night.

Antigua and Barbuda Prime Minister Gaston Browne, whose country was among the 13 Caribbean nations listed by Europe as being tax havens, said the list is flawed and even baffling given that the official regulators, including the Global Forum, in Europe had found the Caribbean countries to be very compliant.

At least 13 Caribbean countries have been named by the EU, which said the blacklisting comes amidst a crackdown on multinational companies trying to avoid paying tax in the 28-nation bloc.

The European Commission is proposing reforms to end sweetheart tax deals following a series of investigations into arrangements between EU countries and firms including Amazon, Apple and Starbucks.

Barfod in his op-ed said he wanted to explain the process so as to allay the fears of governments and those players in the industry who might contemplate the worst as a result of the list.

“I also want to suggest a course of future action that could reduce the tensions created by the publication of the list,” he said, adding “let me say from the outset that this was the first time such a list was prepared and is purely a compilation of what already existed at the national level of individual EU member states”.

The EU diplomat based here said that the list of countries did not emanate from a new assessment, as the jurisdictions have not been analysed by the European Commission.

“The European Commission recognises that member states’ approaches to listing non-EU countries are still quite divergent and inconsistent and this is something the Commission is very keen to address.

“Let me also say that the compilation of lists published by the EU Commission is not intended to compete with the work of the OECD’s Global Forum. It is essentially a tool to harmonise the different criteria that the EU member states use, in order to achieve fairer corporate taxation across the EU, and ultimately an “OECD Plus” status. The clarity of a consolidated EU definition of a compliant/uncooperative justification would of course have immediate benefits for our partners, including Caribbean countries.”

Barfod said that the good news is that this snapshot of EU member states’ lists will be updated in six months to reflect any changes during that period.

“Therefore we will encourage listed Caribbean countries to keep in close contact with EU Member States concerned as well as the European Commission in order to correct any errors in the initial list, which do not truly reflect the situation in their country.

“This process of in-depth dialogue can begin as we speak. With strong cooperation, I am confident that we can improve global compliance with good tax governance standards.

“Looking to the future, I believe there is an opportunity for enlarging the region’s dialogue with the EU from a position of mutual understanding, and with the recognition of the steadfast and tangible support the EU has provided to the Caribbean in taxation and many other areas. This perspective will yield great dividends on both sides for advancing fairer and more transparent corporate taxation,” the European diplomat added.