"Clean"Antigua Cannot Associate With Rest Of Caribbean, says PM

Lisa Ugur, Tax-news.com, London

05 September 2000

Antigua's Prime Minister Lester Bird should surely be sporting a halo soon, if recent revelations are anything to go by. Last week, on a visit to a new building which will house the Office of National Drug and Money Laundering Control Policy (ONDMLCP), he declared that Antigua and Barbuda is beefing up its surveillance infrastructure in the fight against money laundering and drug trafficking. Moreover, Mr Bird created rather a stir (and a considerable amount of disappointment) when he declared that Antigua was sufficiently "clean" to not warrant joining in a combined Caribbean effort to fight European and US charges of money laundering and harmful tax regimes in the region.

Antigua and Barbuda managed to evade the Financial Action Task Force's list of money laundering blackspots earlier this year but is still plagued by a one and a half year old US financial advisory warning against business transactions with local banks. This is undoubtedly a thorn in Lester Bird's side. He has made clear that the government is eagerly awaiting the lifting of this advisory and the new counter-money laundering initiative is part of Antigua and Barbuda's efforts to rid itself of the advisory stigma. Mr Bird said: 'Part of the problem, for instance, why they haven't officially lifted that advisory yet is that they (United States) are sending a team here to see whether or not we have the capacity to implement what we have passed in the Parliament.' Now Mr Bird can show them the new criminal intelligence unit, of which he says: 'this is going to be involved in ensuring that we have analysis and to be able for us to demonstrate that we have the capacity to carry out and implement much of the legislation that we have passed with respect to money laundering.'

Whilst Mr Bird may be making friends in the US Treasury, he has been alientating his Caribbean neighbours. He has broken ranks with Owen Arthur and other regional leaders in the Caribbean whose financial sectors have come under fire of late from the Financial Action Task Force, the OECD and the Financial Stability Forum, stating that Antigua and Barbuda has got its house in order and will not be joining any Caribbean Community (CARICOM) plan of action to respond to charges levelled against many of the Caribbean nations. A formal letter to that effect has apparently been sent to St Vincent and Grenadines Prime Minister Sir James Mitchell.

Fifteen Caribbean nations were named in the OECD's list of harmful tax havens and five in the FATF money laundering list. In August a number of jurisdictions announced the formation of a regional group to tighten regulations against money laundering and to challenge the right of the OECD to declare their low tax regimes "harmful" and threaten sanctions. St. Kitts and Nevis Prime Minister Denzil Douglas stated that CARICOM had agreed to form the Caribbean Association of Regulators of International Business (CARIB) to help respond to the charges levelled at them by the FATF. The association would also coordinate a legal defence against the blacklist of 35 tax havens deemed by the OECD to have unfair tax practices and to which the OECD has given a deadline to eliminate these practices or face sanctions.

Attorney-General David Simmons, who has responsibility for Barbados’ Anti-Money Laundering Authority, has described Antigua’s withdrawal as a “shattering blow to regionalism”. Yet the signs of Mr Bird's apathy to the new association were probably always there. After all, he failed to attend any of the scheduled meetings to discuss the initiative. Then came Mr Bird's letter, dated August 15 and sent to Sir James Mitchell and copied to the CARICOM secretariat. In it, Mr Bird noted his country was in a “peculiar” situation since unlike several of its CARICOM partners, Antigua and Barbuda passed the FATF test of 25 criteria to determine non-cooperative jurisdictions in the prevention of money-laundering. Mr Bird wrote: 'We are ahead of many jurisdictions that must now reform their own laws and practices.' He added that leading a coordinating committee to strengthen the region’s financial services sectors 'would be best done by one of the countries which has to engage in such an exercise.' He also advised that CARIB ought not to be set up 'in a vacuum and without a study of all that is involved and its implications. In our view this is a knee-jerk reaction and not a considered one.'

As far as Barbados' Attorney-General Simmons is concerned, Mr Bird has effectively “scuttled” any regional response to the issue and to efforts by Caribbean leaders to have one regional economic space. He commented: 'It now means each country will have to pursue its own initiatives, while we review CARIB and see if there can still be a way to adopt a regional stance.'

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