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Hague Puts Turks And Caicos Premier In Check

by Amanda Banks, Tax-News.com, London

19 March 2013


The United Kingdom Foreign Secretary William Hague has rebutted comments made by the Turks and Caicos Islands' (TCI) Premier Rufus Ewing to the Caribbean Community regarding the UK's relationship with the islands, and decisions made by the UK-appointed interim Government.

The interim Government was installed on August 14, 2009, when the UK Government - acting on corruption concerns - assumed control of the territory's affairs and removed its elected premier, cabinet and assembly and suspended much of its constitution. Following three years of reforms, to improve the islands' finances and to introduce safeguards to ensure sound fiscal management and good governance going forward, the UK Government agreed that the islands could be returned to self-rule in elections held on November 9, 2012.

In a letter to Ewing dated March 12, 2013, Hague has scolded the TCI Premier for his criticism of representatives appointed to the interim Government, and rebuffed calls from Ewing for the UK to recall its representatives.

Since the newly elected Turks and Caicos Islands' Government took power, Ewing has sought to undo a number of reforms implemented by the UK interim Government, and won a hard-fought battle to drop plans to implement a value-added tax regime from April. In late February, Ewing went as far as to claim that UK representatives had committed "atrocities and wrongful acts" in the TCI, and called for comprehensive changes to the islands' constitution to return power over TCI affairs to local control and reduce UK interference.

Urging an overhaul to the framework between the UK and the TCI, Ewing argued that the new constitution "is not a constitution of the people, by the people or for the people, and hence it should be amended and advanced, and we should start this process immediately through the proper procedures and dialogue."

In response to the comments, Hague has stated: "I regret to say you substantially misrepresent both the past and the present situation to both the people of the TCI and to the leaders of the Caribbean."

"The UK Government set out a clear vision in our Overseas Territories White Paper last year. We want the Overseas Territories, including the TCI, to flourish in partnership with the UK. We want you to build a strong and sustainable economy and to develop as a community. We have a broad responsibility to support the Territories and to ensure security and good governance. We expect the Territories to meet the same high standards of good governance and public financial management as in the UK."

"As we are all aware, the previous Progressive National Party Government (of which Ewing is now leader) left behind a chaotic situation including - through incompetence, abuse of power and corruption - rapidly deteriorating public finances. As a result, TCI was, in effect, bankrupt."

"In 2009, the UK Government provided emergency funding to enable public workers to be paid. In 2010 we provided a guarantee that enabled the TCI to borrow up to USD260m at an affordable interest rate."

"The Interim Administration implemented a broad program of reform to deal with this situation and to help prevent it being repeated. These steps should help minimize the chances of a few corrupt people exploiting the assets of the TCI for their own benefit instead of these assets being available for the good of all the community. We will allow neither this framework to be rolled back nor the delivery of good and honest Government to be undermined," he underscored, confirming his full support for UK-appointed officials in the TCI.

"You have raised independence and of course this is an option for the Turks and Caicos Islands; if the people of TCI express a wish for independence through a clear and proper process, the UK Government will meet its obligations to help the Territory to achieve it."

Concluding, Hague stated: "The TCI Government has the chance to shape the future of your islands. The UK Government has invested much in helping put TCI back on the right path. I hope you will use this inheritance wisely."

TAGS: tax | investment | business | value added tax (VAT) | interest | fiscal policy | international financial centres (IFC) | Turks and Caicos Islands | United Kingdom | offshore | standards

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