See Discussion Forum Topic: The OECD Vs Offshore - add a comment!
There has scarce been a furore on such a scale as that caused by the Organisation for Economic Co-operative and Development (OECD) list of nations deemed to possess harmful tax practices, published in June. The impact has been huge and largely centred in the Caribbean, given that several islands there were included. These included Antigua and Barbuda, and last week its Ambassador, Lionel Hurst, called for "fair play" by the US over the blacklisting.
Along with other Caribbean ambassadors, Mr Hurst was meeting with the US government at the US State Department in Washington to discuss an issue which in their eyes is "pitting large and wealthy states against the smallest and poorest nations." Mr Hurst made clear Antigua and Barbuda's oppostion to the OECD's initiative against what he sees as simply small states offering low taxes to foreign corporations and wealthy investors, not the "harmful" and "damaging" tax practices alleged by the OECD. He said: 'We believe that the favourable tax treatment, which low-tax jurisdictions offer to certain categories of corporations and investors, is good for the overall functioning of the global economic system, because that system requires competition for improved performance of all players, both large and small. We have not seen any evidence of a race to the bottom, as some have argued.'
Ambassador Hurst pointed out to the US officials that even within the US, the smallest states provide similar low tax incentives to encourage businesses to relocate there. He argued: 'Small states around the globe need a fair, efficient and low-cost multilateral dispute settlement mechanism, which serves the same function performed by the US constitution and court to all 50 states within your nation.'
Ambassadors from other Caribbean countries also spoke at the meeting, stressing the need for consultation and co-operation, rather than conflict between small and large states. No decisions were made at the two-hour meeting and it is unclear exactly where these nations go from here. Admittedly, they can potentially be removed from the OECD blacklist if they meet the demands of the Paris-based organisation, but undoubtedly the damage has already been done. Their reputations have already been dented, that is for sure, but perhaps the picture is not so black as it seems. It is too early yet to tell whether the offshore financial sectors of the "named and shamed" Caribbean nations have been severely damaged - it certainly seems that these nations believe so - but there is the real possibility that the OECD initiative could have served as little more than free publicity for the offshore sector.
See Discussion Forum Topic: The OECD Vs Offshore - add a comment!
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