An opposition lawmaker is encouraging the government of St. Vincent and the Grenadines to sue the European Union (EU) over its “extra-territorial” actions to force small states to enforce its tax laws.
Kay Bacchus-Baptiste, a lawyer, made the call on Thursday, Dec. 27, 2018 during debate of the International Business Companies (Amendment and Consolidated) (Amendment) Bill, 2018.
The changes in the law come amidst pressures from the EU, which Bacchus-Baptiste, a former agent in the international business sector, said would, in effect, destroy the industry in small state.
Bacchus-Baptiste said she smiled when she read the words “harmful taxation”.
“Harmful to whom? From whose perspective? And so, I also feel that what the European Union is doing is illegal and I do not think that creative resistance by just saying so is enough,” she said, referring to a call by Prime Minister Ralph Gonsalves earlier in the debate for CARICOM nations to put up creative resistance to the EU on this matter.
“I think we have to go further. I think we should challenge it in the international courts of justice because you are using your power to enforce your view,” she said of the EU.
“And I do agree that it is ruling extra territorially. And to say it with indignation and just sit down will not make one single difference.”
Gonsalves had accused the EU of being a bully, even as he said that CARICOM had not acted together in response to the development.
Bacchus-Baptiste said: “I think that if we can say the European Union are bullies, what do we call CARICOM? A mouse? If we can say that the European Union is selfish and they are only looking out for their interest, what do we say of CARICOM?
“Barbados will go their way to see how to protect their law; Grenada says well we don’t have a lot so we get rid of it, the BVI and the Bahamas and so, which have more investments, will try will protect it; St. Vincent has a fair amount so we will crawl along,” she said, mentioning the individual responses of some of the CARICOM nation with an IBC sector.
“That is not the way to go. There is a principle in the Bible: the David and Goliath principle. And I still believe that can work today. I still believe that CARIOM should come together and not be selfish and self-centred because that is what is defeating us.”
She said that the EU’s imposition “is what we have to call harmful taxation.
“We need to say that. We need to not just say well, I have a voice and CARICOM or just say that CARICOM has not done anything. When we meet at CARICOM level, when you go therein as Prime Minister, Mr. Prime Minister, and the other prime ministers from around the Caribbean, we need to call on all of CARICOM to act tougher in the interest of CARICOM. So far, on this issue, we have been acting too individually, too selfish, too self-centred and if it continues like this, the industry will die for them too.”
Bacchus-Baptiste said the region must take some of the blame for allowing the EU, the Organisation for Economic Co-operation and Development and the Financial Action Task Force to destroy the region’s IBC sector.
“… they call it ‘offshore business’, that was a bad word then, then ‘international business’, now we have to take out the word ‘international’. I think we are at fault. I think we are at fault for allowing them to define our business, define the industry. I think we are at fault even among our own nationals here in St. Vincent because a lot of them do not really understand what the international business is about and a lot of them regard it as maybe just dealing with corruption or money laundering, etc. and we let them get away with it.
Bacchus-Baptiste called on CARICOM leaders to redefine the IBC sector “so that our citizens will understand that it is not a bad word to say offshore companies or international business companies…”
She said the region should explain how lawyers, accountants, secretaries, office attendants, registered agents and other persons are employed in the sector and the money that is regenerated in the society.
“But if we allow them to look at it as if it is a bad word, it is dirty, it is corruption, it is money laundering, then they will not care. I don’t know how many persons are listening to us today, because as far as they are concerned, an act that is called, International Business Companies (Amendment and Consolidated) Act, what is that? We don’t care.”
The senator said that if the population were polled, half would say the bill is about corruption and money laundering and that the IBCs and international trust are not important.
“And we allow that. We allow that by not really defining the importance of the industry and what it has been because I know what it has done to St. Vincent around the 80s 90s. Yes, they are much less now than then, but … it generates money in the community.”
The senator said she saw the bill “as the death knell” but said it is not too late.
“Verbal resistance will not succeed,” she however said.
“We will need not only the support of CARICOM, but there are many other countries out there that will take the side of the underdog on an issue like this. We need to redefine what is harmful taxation and to whom and why we must allow these bigger countries to dictate to us how we must make our money, how we must survive in the world. I think the time has some to put an end to that,” Bacchus-Baptiste told parliament
The only reason international companies register their operations in tiny countries like SVG is to benefit from their generous tax concessions and lack of careful scrunity of their often sketchy operations (see, for example, https://www.apintertrust.com/offshore_company.htm?gclid=EAIaIQobChMIuNei2_LM3wIVCzlpCh24XAAdEAAYASAAEgLOVfD_BwE).
Is there something about this that people don’t understand?
I just figure that Gonslaves have the wrong people advising him. He over there shitting his pants getting frustrated. ‘Bad things won’t go away by pretending that they don’t exist.’*
*(Bigger Bigs)