Leader of the opposition Godwin Friday says that St. Vincent and the Grenadines is implicated in international scandals too often because of the types of investor and business people it attracts.
He made the observation during Thursday’s debate of the International Business Companies (Amendment and Consolidated) (Amendment) Bill, 2018, which was passed into law amidst a threat of blacklisting by the European Union.
Friday said that another thing that Kingstown has to be careful about is that too often the nation’s name in implicated with “a fly-by-night operator who is involved or accused of money laundering here or there”.
The opposition leader mentioned the recent cases of Paul Manafort and Loyal Bank.
In October, authorities in St. Vincent and the Grenadines denounced the description of the jurisdiction as “notorious for money laundering” and a “prime money laundering destination”.
The terms were used in international media reports about the indictment on money laundering and tax evasion charges in the United States of Manafort, a former Trump campaign chairman, and his long-time associate Rick Gates.
Loyal Bank, a company based in SVG, was among six individuals and four corporate entities indicted in the United States in international securities fraud and money laundering schemes amounting to US$50 million in March.
“And these developments damage our reputation and make it much more difficult for us to be credible in responding to say; yes you are doing the best you can.”
The prime minister, however, said the Manafort had absolutely nothing to do with the SVG jurisdiction in any adverse way.
He said the allegations against Manafort are that he did not report monies he made from a consultancy and that he did not report that he had been working for what would be a foreign agency.
He said Manafort did not own any facilities in SVG, but a payment was made through one financial institution in SVG, and offshore bank to a US account for Manafort.
“In fact, there were several US banking entities in Delaware, in Nevada and in New York, there were two in the United Kingdom, but what happened is this, when the Daily Beast or whatever the name of the journal, it was easy to select out somewhere exotic like St. Vincent and the Grenadines to headline St. Vincent and the Grenadines and Cyprus.”
Gonsalves said it was important for lawmakers not to carry “the entirely wrong headline of the Daily Beast”, adding that both the FSA and the FIU greatly assisted the US authorities and were commended.
Friday, however, said that the characterisation exists in the document and the press and feeds into what the prime minister said earlier, that a small country like SVG, whether it gets on the OECD blacklist, is published in a newspaper or an indictment comes around “we still suffer from it and we have to be extra careful in how we engage in these activities, Mr. Speaker and the response that we have must be effective and based on what is beneficial to the country and not just what sounds good”.
The opposition leader said that the New Democratic Party, because the offshore sector burgeoned in the late 1990s during its tenure, had a tremendous interest in seeing that the work done to set it up and grow it to that point continued for the benefit of SVG.
“We are reaching now, as I said, at a tipping point where we have to seriously ask ourselves what is the nature of the industry, what is the service that we are providing, define it carefully and see if we can negotiate around these requirements because it seems to me that we are saying that we have no real — I mean the tax laws of St. Vincent and the Grenadines are partly being written in the EU, substantially, some aspects of it. Because if you put certain things here, you are saying this is what is beneficial to us, they are saying well it is harmful to us, therefore, you have to change what is beneficial to you so it doesn’t harm us.”
He said former prime ministers James Mitchell and Arnhim Eustace recognised the potential of the offshore finance sector since the 1990s as the NDP government sought to make provision and establish new avenues of economic growth for SVG.
“And it appears now, Mr. Speaker, that we are confronting obstacles that will require seriousness, transparency, taking the people into the confidence of government as you go forward,” Friday said.
“This approach that we have that things that affect people’s daily lives, their jobs, their work, their standard of living that it should all be kept within Cabinet as some sort of secret, we can’t continue to govern like that. And for us to come here between Christmas and New Year’s Day, the people in the country they know that something serious is going on. They know that we are not going to come here, the government is not going to call back parliament because we were here last week, if there wasn’t something critical happening. And that is why we are here, Mr. Speaker. Not to prove how macho we are. We are here to do the business of the people.”
Friday said there are capable people in SVG who has worked in the sector for years, including Linton Lewis and other practitioners.