Caribbean Havens Give Muted Response To Reprieve

by Amanda Banks, Tax-News.com, London

03 July 2001

Despite the recent removal of both the Bahamas and the Cayman Islands from the FATF's money laundering blacklist, and the turnaround by the US government on tax harmonisation, the mood of the Caribbean offshore havens is somewhat subdued, and finance professionals are reluctant to crow.

'What happens next, I don't know,' said counsel to the Florida International Bankers Association, Saturnino Lucio. 'Far be it from me to claim victory.' The Bahamas Financial Services Board has also said that it is not prepared to drop its guard, aware that the small nations are still dependent on the large countries and their financial sectors.

Although the OECD campaign to encourage tax havens to rewrite their tax codes to resemble those of industrial nations has been halted, efforts to nibble away at offshore banking and financial privacy laws continue apace, which may account for the islands' subdued response to recent events. The Paris based organisation is now demanding that some 30 offshore financial centres adopt rules for sharing bank account data by November of this year.

In addition, in order to secure their release from the FATF list of 'uncooperative countries', jurisdictions such as the Cayman Islands and the Bahamas were obliged to enact new legislation, which has meant that they are now having to reassure investors that their assets are safe from the prying eyes of the high tax countries.

However, Wendy Warren, Chief Executive Officer of the BFSB said that there was no need for genuine businesses and investors to worry. 'If there is a well-supported case for criminal conduct, then that conduct is not going to be able to hide in the Bahamas,' she said. 'But for those doing legitimate business, there is bank confidentiality. Our laws have not eroded bank confidentiality.'

Recommended