The United States Foreign Account Tax Compliance Act (FATCA) may be a burdensome piece of legislation for Caribbean countries.
But one political scientist sees it as just another development in decades of “overzealous” regulation of international financial centres (IFCs).
According to Dr Don Marshall, the Caribbean and Pacific states have had to combat negative stereotypes associated with their status as IFCs for 30 years. He said banking cities like Nevada and Montreal offered some of the same services as these jurisdictions but had escaped onerous regulation and classification as tax havens.
“This is 30 years of compliance, 30 years of compliance costs that are mounting to small economies like ours that have some advantages in this particular area. I wouldn’t want to pretend that FATCA and other similar type measures present some new threshold of regulations that would suddenly pose a challenge for us,” he argued.
Marshall made the comments last Monday during a FATCA seminar held at Hilton Barbados for players in the financial services sector. He noted that Caribbean IFCs had come in for “special mention” in the global financial meltdown.
“The former president in France referred to shutting down West Indian offshore financial centres and this echoes sentiments that president Obama had when he was a senator . . . .
“Groupthink in parts of Conservative America is that offshore financial centres are bad for international financial stability,” he said.
Marshall however noted that growing number of regulations “flies in the face of certain principles of neo-liberalism” and the freedom of investors and high net worth individuals to choose where they wanted to place their money.
“The whole point of being an independent country is the right to determine your own tax policy. The more and more these overzealous regulations are put in place, the more there is a trespass into the fiscal sovereignty rights and claims of independent sovereign countries,” he said. (NB)?
