A call has been made for the gov­ern­ment of T&To to chal­lenge the Eu­ro­pean Union’s de­ci­sion to list the coun­try as a non-co­op­er­a­tive tax state.

The Coun­cil of the Eu­ro­pean Union re­cent­ly re­leased its con­clu­sions on the re­vised EU list of non-co­op­er­a­tive ju­ris­dic­tions for tax pur­pose.

In it, it stat­ed the fol­low­ing for T&T:

“T&T does not ap­ply any au­to­mat­ic ex­change of fi­nan­cial in­for­ma­tion, does not have a rat­ing of at least Large­ly Com­pli­ant by the Glob­al Fo­rum on Trans­paren­cy and Ex­change of In­for­ma­tion for Tax Pur­pos­es for Ex­change of In­for­ma­tion on Re­quest, has not signed and rat­i­fied the OECD Mul­ti­lat­er­al Con­ven­tion on Mu­tu­al Ad­min­is­tra­tive As­sis­tance as amend­ed, has harm­ful pref­er­en­tial tax regimes (Free Zones), and has not re­solved these is­sues yet.

“T&T com­mit­ted to ad­dress the BEPS IF’s rec­om­men­da­tions with re­gard to the im­ple­men­ta­tion of cri­te­ri­on 3.2 on coun­try-by-coun­try re­port­ing (CbCR) in due time, so that this is re­flect­ed in the BEPS IF Ac­tion 13 Peer Re­view Re­port in the au­tumn of 2023.”

How­ev­er, econ­o­mist Mar­la Dukha­ran has ques­tioned both the ra­tio­nale and the au­thor­i­ty up­on which the EU has tak­en this stance.

“What ex­act­ly is the EU try­ing to achieve by black­list­ing coun­tries for al­leged tax and AML/CFT non-com­pli­ance?

“Are they try­ing to achieve com­pli­ance? If that’s the case, then these two facts are rel­e­vant. In May 2009, the (OECD) com­mit­tee on Fis­cal Af­fairs de­cid­ed to re­move all three re­main­ing ju­ris­dic­tions from the list of un­co­op­er­a­tive tax havens. As a re­sult, no ju­ris­dic­tion is cur­rent­ly list­ed as an un­co­op­er­a­tive tax haven by the com­mit­tee on fis­cal af­fairs (of the OECD, which is the glob­al au­thor­i­ty on tax com­pli­ance,” Dukha­ran said.

She not­ed that ac­cord­ing to the OECD list­ing, T&T has not been list­ed as un­co­op­er­a­tive.

“What gives the EU any au­thor­i­ty to uni­lat­er­al­ly adopt a dif­fer­ent stance to the OECD and to im­pose any penal­ty?” she asked

The econ­o­mist al­so point­ed out that ac­cord­ing to the Tax Jus­tice Net­work’s glob­al fi­nan­cial se­cre­cy in­dex, T&T ranks 130 of 141 states and as such it is one of the small­est sup­pli­ers of fi­nan­cial se­cre­cy glob­al­ly.

She said, “All the EU mem­ber states have high­er rank­ings on this list than T&T. Fur­ther­more, the EU mem­ber states and EU al­lies oc­cu­py all of the top spots. So if the EU was in­ter­est­ed in ad­dress­ing glob­al tax com­pli­ance, which by the way is not their ju­ris­dic­tion, then they should start with the USA, Switzer­land, Sin­ga­pore, Hong Kong, Lux­em­bourg, Japan, Ger­many and the UAE. But of course they won’t--those coun­tries are their pow­er­ful al­lies and they wouldn’t dare. In­stead they come af­ter the coun­tries who re­al­ly are not the prob­lem.”

Dukha­ran point­ed out that the Eu­ro­pean Par­lia­ment ac­knowl­edged that ju­ris­dic­tions cur­rent­ly on the list are cov­er­ing less than two per cent of world­wide tax rev­enue loss­es while EU coun­tries are re­spon­si­ble for 36 per cent of tax havens.

The econ­o­mist said the black­list­ing of T&T con­tin­ued to hurt the bank­ing sec­tor in the coun­try.

“The clients of banks in T&T and their cor­re­spon­dent banks have and will con­tin­ue to suf­fer from high­er costs and bar­ri­ers to do­ing busi­ness in­clud­ing en­hanced due dili­gence and re­duced ser­vice of­fer­ings, es­pe­cial­ly as it re­lates to cross bor­der pay­ments for trade and in­vest­ment pur­pos­es, even cred­it cards.

“This has sig­nif­i­cant eco­nom­ic im­pli­ca­tions for T&T and oth­er EU black­list­ed coun­tries, es­pe­cial­ly in the Caribbean and the Pa­cif­ic as we are the most open coun­tries in the world (mean­ing we are the most de­pen­dent on In­ter­na­tion­al trade),” she told the Busi­ness Guardian.

The Busi­ness Guardian reached out to the Bankers As­so­ci­a­tion of T&T for fur­ther clar­i­fi­ca­tion on the im­pact on the sec­tor and what could be done to im­prove the sit­u­a­tion. BATT’s re­sponse was brief.

The as­so­ci­a­tion said, “T&T has been on the EU list of Non-Co­op­er­a­tive ju­ris­dic­tions for tax pur­pos­es since the list’s in­cep­tion in De­cem­ber 2017.”

BATT con­tin­ued, “Mem­bers of the Bankers As­so­ci­a­tion of T&T (BATT) con­tin­ue to work with our clients and our re­spec­tive cor­re­spon­dent re­la­tion­ships to min­imise any im­pact to lo­cal busi­ness op­er­a­tions, both from a bank­ing and a client per­spec­tive.”

Dukha­ran al­so point­ed out that ac­cord­ing to var­i­ous re­ports, the ac­tions tak­en by the EU were counter-pro­duc­tive in terms of ad­dress­ing tax eva­sion and mon­ey laun­der­ing.

She not­ed there ap­peared to be a lack of trans­paren­cy in the EU Black­list­ing process, as she again not­ed in­ter­na­tion­al me­dia re­ports which sug­gest­ed that it reg­u­lar­ly over­looked tax eva­sion with­in EU mem­ber states.

“Why would any­one even pay at­ten­tion to, let alone treat the EU and their black­lists as cred­i­ble, there­fore? I don’t think the au­thor­i­ties in T&T or any EU-black­list­ed coun­try should pay any at­ten­tion what­so­ev­er to the EU’s far­ci­cal black­lists. Yes, be­ing black­list­ed has neg­a­tive con­se­quences for our econ­o­my, but so do some of the ever-chang­ing, uni­lat­er­al­ly, un­fair­ly and dis­pro­por­tion­ate­ly im­posed com­pli­ance re­quire­ments from the EU (which they have no au­thor­i­ty to im­pose and which their own mem­ber states do not com­ply with). If more black­list­ed coun­tries stood up to the EU, shout­ed about the in­jus­tice and hypocrisy of the EU’s ac­tions, then maybe we would not be in this po­si­tion,” said Dukha­ran.

The econ­o­mist ar­gued had she been in a po­si­tion of pow­er in T&T she would have re­buked the EU and their black­lists in the strongest pos­si­ble terms and writ­ten a for­mal com­plaint to the Unit­ed Na­tions con­cern­ing the “un­fair and in­de­fen­si­ble” EU black­list­ing of the coun­try.

Dukha­ran al­so ex­plained she would al­so con­sid­er ask­ing the EU am­bas­sador to leave our shores and would refuse EU “gifts” of aid, which she said on­ly served to make coun­tries more de­pen­dent on Eu­ro­pean coun­tries.

She said, “These would be the on­ly ac­tions I would take in this mat­ter, and these are the on­ly ac­tions I would sup­port from the au­thor­i­ties of my coun­try and any EU-black­list­ed coun­try in this mat­ter.”

Dukha­ran not­ed that while T&T has been on the list for sev­er­al years, it had done lit­tle to call out the EU’s stance.

She said, “the on­ly coun­tries on earth that are dou­ble black­list­ed by the EU, are T&T and Van­u­atu. Yet T&T’s si­lence on this mat­ter is deaf­en­ing. Van­u­atu has been push­ing back hard.”

In Sep­tem­ber, Bar­ba­dos Prime Min­is­ter Mia Mot­t­ley tes­ti­fied in Wash­ing­ton DC on the im­pact of de-risk­ing in the Caribbean be­fore US Con­gress­woman Max­ine Wa­ters, Chair­man of the House Com­mit­tee on Fi­nan­cial Ser­vices.

Dur­ing the tes­ti­mo­ny, which was at­tend­ed by Prime Min­is­ter Dr Kei­th Row­ley, the Bar­ba­di­an Prime Min­is­ter sim­i­lar­ly ar­gued the black­list­ing of Caribbean banks did lit­tle to de­ter ma­jor mon­ey laun­der­ing and fraud while sim­ply pun­ish­ing small­er states and sti­fling trade in those re­gions.

The Busi­ness Guardian sent ques­tions to a rep­re­sen­ta­tive at EU Coun­cil con­cern­ing the EU list of non-co­op­er­a­tive ju­ris­dic­tions for tax pur­pos­es, but did not get a re­sponse up to the time of pub­li­ca­tion.