OECD measures authoritarian and threatening
Thursday April 21 2011 | 03:01 AM

It has been asserted that the main driving force for eliminating poverty is economic growth. If provision of legitimate financial services is a forward for economic growth, what would influence the OECD - other than self-interest - to inflict punitive sanctions on some offshore jurisdictions. Today, the offshore financial institutions may be circumvented with a desert of gloom and despair, but we always note that in the final analysis there will be an oasis of hope.

These were the closing remarks of Hillford Murrell as he gave the opening submission at a panel discussion hosted recently by the Barbados Economic Society, entitled “Prospects and Challenges For Offshore Financial Centres”. The chairperson for the evening was Harold Condrington and the other panellists were Trevor Carmichael and Patrick Tannis. The discussion surrounded the measures taken by the OECD against certain jurisdictions labelled as harmful tax regimes, and came on the heels of comments made ... last month, declaring that Government was not about to “roll over and play dead” while the OECD enhanced its attempts to blacklist Barbados as an unsafe tax jurisdiction.

Dr. Trevor Carmichael, Principal of Chancery Chambers Attorneys-at-Law, affirmed that the stance taken by the OECD was, from the beginning, authoritarian and threatening. “The OECD’s initiative is one that is dominating by 30 of the richest countries who, essentially, are attempting to safeguard their market share in financial services at the expense of the small international centres ... [such as Barbados]”, he said. He also added that the members of these “elite clubs” made the standards and to a large degree, they determined the implementation, without the participation on non-member countries or the private sector; and obviously without a transparent process.

Dr. Carmichael charged that the OECD’s reasons for challenging small financial centres boiled down to a desire of the dominant countries within the OECD to exert more control over internationally mobile capital; resistance of competition – especially in taxes – brought on by globalisation and a preference for monopolies, or at best, manageable cartels; and for commercial reasons, as jobs in the financial sectors were highly lucrative.

He suggested that Barbados’ response should be to “review on an ongoing basis its own internal processes, bearing in mind that investors looked at substance and not form” and that the country should move further into “developing a series of investment and trading services agreements on which sub-service sectors such as tourism and culture can be underpinned”. These agreements, serving as potential alternatives to existing double taxation treaties – can be useful to the services themselves ... an immediate approach should be to negotiate a bilateral investment treaty with the USA which would help to improve and increase investment to and from America, including attracting business into [the USA] which target [there].

The panel discussion was held at in the Grand Salle, Tom Adams Financial Centre. Amongst those present in the audience was the Governor of the Central Bank, Dr. DeLisle Worrell.