Balford Henry, Senior Staff Reporter CANOUAN, St. Vincent:
"WE ARE doing nothing that is illegal or immoral," says St. Vincent's Prime Minister Sir James Mitchell in reaction to recent claims of money laundering by offshore banks in the region.
"Tax competition is really about whose treasury gets the money. The inter national financial community urges competition and open markets, but when we succeed they declare it unfair, " Sir James told Monday's opening session of the 21st meeting of CARICOM leaders in his constituency town of Canouan, St. Vincent and the Grenadines, which is hosting the meeting.
He said that the CARICOM countries were doing little different from what was obtained in the past, in countries under OECD (Organisation for Economic Co-operation and Developments) supervision.
Sir James was responding to recent reports on a Financial Action Task Force (FATF) list, which listed St. Vincent and the Grenadines (SVG), the Bahamas, the Cayman Islands, Dominica and St. Kitts as countries whose offshore banking operations had encouraged money launder. "All this hype derives from the attitude that we have no business in financial services," the SVG Prime Minister and newly appointed chairman of CARICOM said.
"Be that as it may, let it be known that we in this Caribbean community do not aspire to become a refuge for drug barons or money launderers. Money laundering is already a criminal offence in our jurisdiction. We have signed the treaty with the United States on Mutual Legal Assistance in criminal matters and will be prepared to sign similar treaties with others, should they see this as protection," he said.
He suggested the formation for a Financial Intelligence Unit with autonomy to inspect and regulate all aspects of money laundering. Outgoing CARICOM chairman, Dr. Denzil Douglas, whose island (St. Kitts/Nevis) was also named, said that his government was currently engaged in a programme of tax reform, that, he hopes, will unify their tax system and establish uniformity in offshore and onshore operations.
"However, we feel strongly that a country must be able to structure its tax system in a manner that encourages and facilitates inflows of investment capital into the sectors of the economy that government deems to be critical to the process of development," he said. He said that with agriculture in the Caribbean reeling from the blows administered by the WTO, the international financial services sector are, "the only remaining beacons amidst the encycling gloom."
Sir James said the G7 industrialised nations should provide the Caribbean with the human and financial resources to help keep the area free from money laundering.
