The Threats Facing The Caribbean's Financial Services Sector Have Been Highlighted


MNI Media

Release Date

Wednesday, February 27, 2019


At the 30th Inter-Sessional Meeting of the Conference of Heads of Government of CARICOM that took place on Tuesday, February 26, the labelling of Caribbean countries as non-cooperative tax jurisdictions and the adverse impact that has on the financial services of small island states, were among the burning issues addressed by CARICOM officials. 

In speaking towards the threat against the region’s financial services, CARICOM Chairman, Prime Minister Dr. Timothy Harris stated, “The denial of correspondent banking services affects our tourism sector and indeed our capability to engage in international transactions such as when credit card transactions are delayed, and also affects remittances, a significant financial element in many of our small economies.”

Many Caribbean islands have had to deal with being blacklisted and having to meet continuous changes in requirements for operations. Thus, the Honourable Timothy Harris, stated in his remarks that the continuous addition of “onerous requirements” to comply with new tax regulations “is tantamount to cruel and unusual punishment.”

PM Harris further went on to state; “The EU [European Union] and its Member States are going well beyond the regulations and requirements of the OECD [Organisation for Economic Co-operation and Development], of which they are a part, and with which our countries are largely compliant. Further, the selective application of their strictures does not apply to everyone and has a distinct bias."

PM Harris also used the opportunity to reiterate his call for the international community to address with urgency the sterile measure of the per capita income criterion now employed to determine the graduation of countries.

The Prime Minister highlighted that these actions by EU member states raises several alarming questions, such as ‘Why are the revenue earning measures of small states within the Caribbean Community and elsewhere being deliberately targeted?’

“Many of us are unable to source concessional development financing having graduated out of access by the use of GDP per capita as the major criterion rather than the more comprehensive vulnerability index,” Dr. Harris stated. “We have to press the case at every level that as the International Monetary Fund (IMF) has recognised, we have significant vulnerabilities that set us apart from other middle-income states.”

In light of this, Prime Minister Harris strongly suggested that vulnerability be the major criterion in determining access to concessional development financing, and urged his CARICOM counterparts to continue their advocacy of this critical point.

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