CARICOM Single ICT Space Vital To Compete
The vision of a Single ICT Space, articulated by CARICOM Heads of Government, is concrete recognition of the role that technology must play in the economic and social development of the Caribbean. This was emphasised by Senator Darcy Boyce, Minister with responsibility for Telecommunications, yesterday as he spoke at the Caribbean Broadband Forum in Port-of Spain, Trinidad and Tobago. In his keynote address, Senator Boyce stated: “Regional cooperation and collaboration are absolutely necessary for the realisation of the desired ICT vision. Realisation of that vision should no longer be postponed. We must move resolutely to ensure that it comes to fruition in the shortest feasible time.” He maintained that the Single ICT Space must create the environment for investment, entrepreneurship, development and innovation. “Traditionally, electricity, gas, water, wastewater and telecommunications infrastructure have always been important considerations for site selection for investment flows. Advances in technology and the convergence of services have elevated the importance of the Internet in economic development and site selection,” Senator Boyce noted. He stressed that the availability, quality and competitiveness of broadband service were now important requirements to capture investment flows and to encourage innovation. “Broadband has flattened the world by allowing businesses to communicate and collaborate in ways never before possible because of the increase in the amount of information that can be transferred at faster speeds, in real time and new software technology, all made possible by phenomenal increases in bandwidth.” Senator Boyce said that in order to support the adoption of broadband services, Caribbean Governments must lead and become earlier adopters of technology. “Our Governments must use broadband connectivity to make the provision of public services more accessible; and to improve the welfare of our citizens through access to healthcare and educational services.” Noting that one of the ultimate aims of increasing and improving broadband in the region was job creation, he said: “Therefore, we must not falter. We must be resolute in our actions and committed to creating the future that is possible, enabled by robust and ubiquitous Caribbean broadband infrastructure.” Article compliments BGIS.
Barbados to lead banking study
Barbados is to lead a study examining whether Caribbean banks are compliant with international financial guidelines, as part of a Caribbean Community (CARICOM) strategy to counter moves by international banks to end their correspondent relations with the region. The proposal for the study was submitted by Governor of the Central Bank of Barbados Dr Delisle Worrell at the 37th CARICOM summit held in Guyana. CARICOM leaders have warned that regional economies are at risk of being shut out from the rest of the world if corresponding banking relationships (CBRs) which enable the provision of domestic and cross-border payments are terminated. Critical services, including remittance transfers, international trade, and the facilitation of credit card settlements for local clients, among other services, would be affected. The banks say they are ending the relationships as part of their efforts to conform to international regulations and to safeguard their reputations against allegations of facilitating financial crimes. Worrell said the study would cover “the role of the small international financial centres in increasing the efficiency of global commerce; the status of the Caribbean regulatory, legal and risk frameworks and processes visa via international standards and best practices”. He added that it will assess the level of compliance by using data monitored by a number of international agencies and institutions, including the International Monetary Fund, World Bank, Basel Committee on Banking Supervision, the Financial Action Task Force on Anti-money Laundering and the Global Forum on the Tax Exchange of Information. Prime Minister Freundel Stuart has already indicated that the issue is of grave concern, warning that it could severely affect this island’s international business sector. “The economy of Barbados has also over the years relied very heavily on remittances from our very large diaspora in various capitals of the world -Canada, the United States and the United Kingdom. So this is just not another issue for Barbados it is fundamental to our way forward and therefore we fully identify with our colleagues in CARICOM who are similarly threatened,” Stuart said. In a statement CARICOM said that at least eight financial institutions in Barbados, seven in Jamaica, five in Belize and others in Antigua and Barbuda, Montserrat and other member states had already been affected by a termination of, or restriction in, correspondent banking relationship. In addition to the study, CARICOM member states have also agreed to host a global forum by the end of this year with key stakeholders such as regulators, correspondent bank representatives and non-government entities to present their case. CARICOM leaders have also outlined plans to engage a United States lobby group to advance their cause. Regional representatives have already held meetings with the US Treasury and the State Department to seek their support. Article compliments Barbados Today.
Barbados Shortlisted for ‘Offshore Captive Domicile of the Year’ Award
Barbados has been shortlisted in the category of ‘Offshore Captive Domicile of the Year’ for the US Captive 2016 Services Awards. The event, which is in its fifth year, is hosted to recognise and reward those providers of captive insurance products and services, who have outperformed their competitors and demonstrated the highest levels of excellence over the past 12 months. The award ceremony will be held on Monday, August 8, at the Hilton Burlington, Vermont, USA. This marks the first year that Barbados has submitted an entry to the US Captive Services Awards for consideration. The criteria for eligibility included providing evidence of the highest standards of regulation, accessibility, insured care and efficiency, among other things. Barbados, which is ranked among the top ten captive domiciles globally, will share the spotlight with other domiciles that have also been shortlisted in the same category, including the Bahamas, Bermuda, Cayman Islands and Puerto Rico. Barbados currently attracts captive business from Canada, USA, Latin America, Caribbean and the UK and continues to register a number of new captives annually. Among its suite of captive structures offered are segregated cell, separate account, exempt insurance, qualified insurance companies, and the recently introduced incorporated cell legislation. The Services Awards is organised by Captive Review. Article compliments Invest Barbados.
Barbados Will Need New Ally In European Union
With Britain’s exit from the European Union comes the challenge for the Caribbean of finding “a new voice” in Europe. Barbados’ Minister of Finance, Christopher Sinckler, noted during a recent courtesy call with United States Ambassador to Barbados, Linda Taglialatela: “Since our voice in Europe will no longer be there, we will have to build new relationships to put the case for the English-speaking Caribbean.” He explained that because of historical ties, Britain tended to understand Caribbean society and economy more than other European countries, and so Barbados and the rest of the Caribbean regarded the UK as its natural ally in the EU. The challenge will now be, he posited, who does the Caribbean rely on to carry that brief? Minister Sinckler, who was responding to a query from the American Ambassador, about the impact of BREXIT on Barbados, said that it was early days yet and while the impact would be immediate, no-one could forecast the extent. As Barbados’ main source market for tourism, he said, that while people who had already planned and paid for their vacations would still come, the impact in the marketplace would be seen in the reduction in purchasing power or spend. In the case of those who had not yet booked, he added, the extent of that impact would be measured when the winter season numbers became available. The Finance Minister said that another area that Barbados was watching closely was investment. He explained that in the past, as the British pound declined in value against the United States dollar, so too the purchase of second homes in Barbados declined, and as the value of the pound improved, the real estate market rebounded, almost parallel. He said there was already intelligence which suggested that some people had put purchases on hold and this was an area of concern for Government since this was a major driver of foreign direct investment. In the long-term, Mr. Sinckler also expected some impact in terms of trade since he said most of what the Caribbean exported to Europe went through the United Kingdom. Entry into these markets will now have to be renegotiated, he submitted. Article compliments BGIS.
Barbados Will Monitor Britain’s Withdrawal From EU
Prime Minister Freundel Stuart, like most people around the world, has expressed surprise at the decision of the British to vote in favour of leaving the European Union. And, Mr. Stuart says the Caribbean would have to wait and see whether the decision to withdraw would have any seismic effects in this region. “In the short term I do not think so, but clearly, given the close relationship between Barbados and the United Kingdom, our heavy dependence on British tourism, and the fact that we have an international business sector that benefits from British investment as well, we have to wait to see what will happen over the medium to long- term. I do not think that in the very short-term that we should become too anxious because the dismantling process is going to take about two years,” he said. The United Kingdom voted in a referendum on Thursday to leave the European Union, with those in favour of remaining being defeated by 52 per cent to 48 per cent. The Prime Minister expressed the view that there would be some currency shocks, but stressed that once those initial shocks had passed, the pound would regain its place. He continued: “I think we have to monitor the situation and if we are required as a result of reverberations felt here in Barbados to make any adjustments and to adapt to any new realities, we should stand ready to do so. But it is not an occurrence which we can afford to ignore. Britain is still a major power in the world and the bilateral relationship is a very strong one, and we therefore have to monitor any potential changes.” Mr. Stuart noted that the United Kingdom had been a part of the European Union for 43 years, and therefore one would have thought that the British would have found it very difficult to make a decision to severe those ties. He stated, however, that the decision had been taken and one had to adjust to that new reality. He said that with the presence of the United Kingdom in the European Union, Caribbean officials were certain that on critical issues they would have a voice on which this region could rely. “To the extent that they are not going to be at the table in the European Union that voice will be missing, although I do not envisage that because the United Kingdom is disengaging from the European Union, that the disengagement will be such that they will have nothing to do with the European Union at all…,” he stated. Mr. Stuart reminded that the Caribbean also had its own experiences with referenda and integration movements. He recalled 1962, when the 10-member Federation in the Caribbean was dismantled after a referendum held in Jamaica. Article compliments BGIS.
Jamaica scrapping visa requirements for Latin American visitors
Jamaica plans to do away with visa requirements for several Latin American countries, to woo more visitors from that region. And Tourism Minister Edmund Bartlett says travellers from Poland and a few other European countries will also get that luxury as well. Following a meeting with tourism industry players and stakeholders on Monday, he said the Latin American countries of Argentina, Brazil, Chile, Mexico, Colombia, Ecuador, Panama and Peru would be targeted for visa exemptions. “The necessary work is being done to facilitate Latin American visitors coming into Jamaica, and we believe that we will be able to entice even more of them by making it easier to travel,” Minister Bartlett said. “Of the millions of Latin Americans that took overseas trips in 2014, we find that we should be getting a bigger piece of the pie. In terms of our geographical location and the nature of our tourism product, we should be able to effectively compete in this market.” The lion’s share of the Latin American travellers to the Caribbean goes to Mexico, the Dominican Republic and Cuba. Over 24,000 Brazilians went to Aruba, while 9,300 went to The Bahamas in 2014. Only 2,925 visited Jamaica, while over 5,000 visited Barbados. “More than 23,000 Colombians visited Aruba versus just 4,100 who came to Jamaica, while 12,000 Argentineans went to Aruba, compared to just over 4,000 that came to Jamaica. The point is that we can do better out of Latin America and we must do better,” the Tourism Minister said. Bartlett pointed out that Asia is the fastest growing region in the world with the Japanese showing signs of having an affinity for the Caribbean. “What we are seeing is that the Japanese, Chinese and Indians are emerging as a huge part of the Asian market, thus creating a big opportunity for Jamaica,” he said. “I was recently in Japan and what I can tell you is that the Japanese are ready to come back to the Caribbean. They are ready to travel again and we have to position ourselves to capitalize.” Article compliments Caribbean360.com
Curacao signs up to BEPS and agrees tax treaty with United Arab Emirates
As part of the aim to meet the highest international standards in the tax field, the Minister of Finance Dr Jose Jardim has joined the Base Erosion and Profit Shifting agenda of the OECD, reports the Curacao Chronicle. In this context, the section with regard to the Common Reporting Standards concerning the automatic exchange of information has been already agreed upon. During the visit to Kyoto from June 29 to July 2, the Minister participated in the first meeting of the inclusive framework of the OECD with regard to the design of the BEPS process. The Minister has also signed the section on the countries automatic exchange of information or the MCAA on Country by Country Reporting. The aim is to further shape the legitimacy of the financial center within Curaçao’s jurisdiction, also taking into account the scale limits of the island’s jurisdiction. The participation of Curaçao must ensure within the inclusive framework that this scale restrictions are included in the implementation phase of the BEPS agenda. At the meeting of the OECD in Kyoto, there were also negotiations with the delegation of the United Arab Emirates. These negotiations were concluded with an agreement on the content of a treaty to avoid double taxation between the UAE and Curaçao. In particular, the development of the UAE as a logistics web in the world economy and its advanced financial sector offers Curaçao opportunities to act as a hub within the Latin American and Caribbean region. This agreement also underlines the importance for Curaçao to pursue further cooperation within the region in order to improve the competitiveness of its jurisdiction. Article compliments IFC Review.
Bahamas approved as hub for trade in Chinese currency
The Bahamas’ Minister of Financial Services Hope Strachan has revealed that the country is being developed as a trade hub in Chinese currency – a move that is expected to give the country’s financial services sector a major boost. “In recent times, The Government of The Bahamas has taken advantage of several opportunities for project financing from the Chinese Government and from Chinese corporations,” she disclosed in Parliament. “As a result, the establishment of a hub for trade in Chinese currency is an attractive prospect that the Government of The Bahamas has approved, and my Ministry is diligently pursuing this initiative as a viable project.” The minister said that the success of this project would translate into an entirely new frontier of financial services and trade business for the country and would be a “monumental achievement” in making The Bahamas the Renminbi (RMB) Trading Hub for the entire region. She said that the hub would facilitate financial transactions and eliminate reliance on the US dollar. “The rationale is that the Bahamas Government, Bahamian businesses, financial institutions as well as those throughout the region would have the ability to engage in less costly and less time-consuming processes related to transactions involving the direct clearing and payment of the Yuan currency in The Bahamas,” Strachan said. “It would eliminate reliance on the US dollar and the transacting of business through the United States. The creation of a platform for the Yuan to trade freely with the Bahamian dollar will allow for international trade finance, and trade and investment to increase significantly.” She said further that as foreign businesses set up shop in the country, the potential to increase business activity would be further enhanced. It would also allow for an efficient business framework, underpinned by factors ranging from The Bahamas’ position as a well-respected international financial centre to its strategic geographic location to North American and Latin American markets; and it would facilitate trading without the hurdle of an additional layer of foreign exchange cost and currency risk, and have transactions settled within a favourable time zone (Eastern Standard Time). “An increase in international trade finance, trade and investment would create jobs for Bahamians and strengthen the Bahamian economy. Economic slowdown in the United States magnifies the importance of the need to diversify cross-border trading with other markets around the world. Further, new financial institutions would be established in The Bahamas, including the introduction of the first Chinese bank to the country,” she said. “The establishment of the RMB Trading Hub in The Bahamas would help to further diversify our financial services sector and position The Bahamas favourably, from a global perspective, as an even more appealing place to invest and do business.” Article compliments Caribbean360.com
US corporate tax directors have a hard time adjusting to BEPS
Tax executives at US-based multinational companies are having a hard time adjusting to the new rules demanded by the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting plan, also known as OECD BEPS, according to a new survey, reports Accounting Today. While OECD BEPS is not a requirement in the US, the action plan has influenced the Treasury Department’s recent rulemaking. The action plan aims to discourage multinational companies from shifting their profits and intellectual property to low-tax countries in order to preserve the corporate tax base. Even without all the US rules in place, the OECD BEPS project has made inroads in Europe, so multinationals need to take steps to comply with rules like the various requirements if they want to do business in Europe. Even in the US, some parts of the OECD action plan, such as country-by-country reporting requirements, known as BEPS Action Item 13, were enshrined in the Treasury and IRS regulations last month (see Treasury and IRS Finalize Country-by-Country Reporting Rule). A new survey of 207 corporate tax executives and transfer pricing directors around the world by Thomson Reuters found that 83 per cent of the survey respondents said the documentation and country-by-country reporting requirements for transfer pricing have required the biggest operational changes at their companies. But 71 per cent of US respondents said their company has not yet provided more resources to help their department prepare for BEPS implementation. “In general tax and finance departments that are in charge of complying with BEPS regulations either don’t have enough people, or they are starting to make some plans related to how to move forward with this, but they are digging into the data and sometimes the data doesn’t align,” said Sam Cicogna, vice president and head of ONESOURCE Transfer Pricing at Thomson Reuters. European companies appear to be somewhat ahead of their US counterparts, according to the survey. “The US just passed their regs at the end of June, and some of those other countries already had regs,” Cicogna pointed out. “And the US filing deadline is going to be later than those other countries based on the regulations. Some of the other countries will have to file based on their 2016 calendar years, whereas the US is going to be for tax years starting on or after June 30, 2016.” The survey respondents cited audit risk as their biggest issue resulting from BEPS Action 13 compliance (42 per cent). “A very high percentage of them mentioned audit risk as a key concern related to the transfer pricing process on the survey itself,” said Cicogna. The survey didn’t ask the respondents how they feel about the regulations, but in talking with corporate tax executives, Cicogna hears many of them are baffled. “I do think there’s still confusion related to the number of country-by-country filings that a US multinational will need to actually submit,” he said. “Many of the countries in Europe, for example, have signed a binding multilateral competent authority and exchange of information agreement that basically says if you file with one of them they will exchange information with one another. The US is handling this by enacting treaties or using the treaties they have enacted with each individual country and amending them for the situation, so it’s going to be slower because it’s one on one. Because of that, US multinationals are probably a little confused about the number of countries they’ll need to file with directly and the number that will just be contained in the US filing that they’ll share.” Compared to other parts of the world, the US spends the least amount of time preparing for BEPS, with 50 per cent of US-based multinationals reporting they spend two hours or less per week preparing for BEPS. Still, 64 per cent of the respondents at US multinationals said they are proactively taking steps to prepare for BEPS, compared to 75 per cent of European respondents. “We asked them how much time they were spending related to complying with the BEPS regulations,” said Cicogna. “In the prior year a lot of them were really not spending much time, but that jumped, as you would expect. They’re not getting more resources, they’re not getting more people, yet they’re spending more time. Where does that extra time come from?” In some ways, technology is helping them catch up. “The other thing that jumped out from the survey results is when we asked them how they felt about the systems that were in the market to help them comply, a larger percentage of them said they felt better about the systems that are on the market than the year before,” said Cicogna. While the technology seems to be getting better, there are still concerns about the quality of the data. “The data that you need to fill these templates out is difficult to get, and even when you do get it, it’s not necessarily what you want,” said Cicogna. “When you pull it out of systems it’s a little bit muddled together. It’s fine for financial reporting, but when you dig and try to separate out things like related and unrelated party revenues, there’s a lot of noise in there. Put all that stuff together, and in my mind it points toward a need for solutions and technology to help so you can efficiently pull everything together and have a process in place that gets you a good strong feeling that can project as far as your position is concerned.” Article compliments IFC Review.
New Zealand to set up register of foreign trusts
The New Zealand Government announced on July 13 that it would create a register of foreign trusts, searchable only by regulatory agencies, reports Tax News. The Government said the measure is one of a number it will implement as a result of the Shewan Inquiry into foreign trust disclosure rules. A bill to introduce the changes will be introduced in August 2016. Among the measures, foreign trusts will be required to register on establishment using an expanded version of the current disclosure form IR 607. This must also include signed declaration that the person establishing the foreign trust, the settlor(s), and the trustees have been advised of and have agreed to provide the information to comply with: the record keeping requirements in the Tax Administration Act; the Anti-Money Laundering and Countering Financing of Terrorism Act and Regulations; and the Automatic Exchange of Information/Common Reporting Standard requirements (once enacted). The information required to be disclosed to the tax authority when a foreign trust registers is to be expanded from the current IR 607 disclosures to include the name, email address, foreign residential address, country of tax residence, and Tax Identification Number of: the settlor or settlors; the protector (if there is any); non-resident trustees; any other natural person who has effective control of the trust (including through a chain of control or ownership); and beneficiaries of fixed trusts, including the underlying beneficiary where a named beneficiary is a nominee. Additional rules apply for discretionary trusts. “The changes to the foreign trust rules are a matter that the Government intends to move quickly on. The Government intends to introduce legislation to require a register that is searchable by Internal Affairs and the Police, and annual disclosure requirements in the coming months,” Finance Minister Bill English said. “The Government has always been open to making improvements to New Zealand’s already strong tax settings if that was warranted,” he added. “The Shewan Inquiry’s recommendations are sensible and well-reasoned and by acting on all of them, we will ensure that our foreign trust disclosure rules are strengthened and New Zealand’s reputation is protected.” Article compliments IFC Review.
Indonesia’s new tax amnesty scheme takes effect on July 18
Indonesia’s new tax amnesty scheme takes effect on Monday (July 18), said Finance Ministry Secretary General Hadiyanto, reports The Straits Times. “We will be ready for taxpayers who wish to register, declare and make (tax) redemptions,” Mr Hadiyanto told reporters late on Thursday (July 14) after a meeting at the Coordinating Ministry for Economic Affairs. This was confirmed by Indonesia’s Director General of Taxes Ken Dwijugiasteadi, who told The Straits Times on Friday (July 15) that regulations governing the procedures for the scheme as well as the appointment of a receiving bank for the repatriated funds have been completed. “A third regulation covering entities that tax payers can invest their repatriated funds will be finalised by Sunday,” he added. Their comments come just day after activists filed for a judicial review against the new Bill, passed in Parliament last month, arguing it protects wealthy tax evaders and money launderers from criminal prosecution. President Joko Widodo, however, believes the legal challenge would not pose a major obstacle for the implementation of the amnesty plan and remains optimistic that the courts will back the law. The Tax Amnesty Bill is the first piece of legislation ratified by a Parliament where Mr Joko has majority support for the first time since taking office in 2014. He has called on errant tax payers to come clean warning them that “this opportunity will never come again as tax amnesty will not be repeated”. The country is hoping that on the landmark tax amnesty will recover billions of dollars lost over decades to widespread tax evasion and in assets hidden overseas by wealthy citizens and businesses. Once the scheme takes effect, taxes will range from 2 to 10 per cent, depending on how soon individuals declare previously untaxed assets and whether the funds are repatriated to Indonesia. If all goes to plan, the government expects 1,000 trillion rupiah (S$102.7 billion) to be repatriated from overseas and subsequently invested locally. It will also add 165 trillion rupiah to its tax coffers. Policy planners say this will not only increase the government’s revenue by 11 percentage points, but the capital can also be used to pay for infrastructure and developmental projects that Indonesia needs to grow its economy. However, activists from civil society groups such as the People’s Struggle Union of Indonesia are sceptical, liking the amnesty plan to a “Get out of jail free card” for tax evaders. Together with the One Justice Foundation, the group said they have filed for a judicial review of the Bill. “Money stashed by giant tax evaders is suspected to be the result of crime so it was not reported as taxable income. Thus, (they are) subject to money laundering offence,” Mr Sugeng Teguh Santosa, the head of the One Justice Foundation, told Reuters on Wednesday, adding that the new law has at least 21 constitutional violations that could hurt Indonesia’s anti-graft efforts. A preliminary hearing for the judicial review will be held in 14 days. Meanwhile, the Finance Ministry will work with Indonesia’s embassies in Singapore, Hong Kong and London, all offshore tax jurisdictions where wealthy citizens are said to have banked their wealth, to promote the amnesty scheme to the Indonesian diaspora overseas. Article compliments IFC Review.
Save the Date: BIBA Networking Mingle (June 24th, 2016)
The Barbados International Business Association will be hosting its third Networking Mingle on June 26th, 2016. Further details to come closer to the event.
Save the Date: BIBA Networking Mingle (August 26th, 2016)
The Barbados International Business Association will be hosting its fourth Networking Mingle on August 26th, 2016. Further details to come closer to the event.
Save the Date: BIBA Networking Mingle (November 25th, 2016)
The Barbados International Business Association will be hosting its final Networking Mingle of the year on November 25th, 2016. Further details to come closer to the event.
MR ANDREW ALLEYNE – PRESENTATION AT 2016 IBFS CONFERENCE
International Business and Financial Services Conference Wednesday, March 16th, 2016 WELCOME REMARKS Mr Andrew Alleyne, President of BIBA It gives me great pleasure to join Dr. Worrell and the Hon. Donville Inniss in welcoming you to this year’s International Business and Financial Services Conference. Each year, BIBA is pleased to support the Central Bank of Barbados in its efforts to bring together representatives from both the public and private sectors that are key to the success of this sector, to dialogue and share views on how to further advance our collective goals. The theme for this year’s conference Reflecting on the Past: Planning for the Future, is a timely topic in light of the ongoing celebrations of 50 years of Independence. It is important for us to reflect on the history of the international business and financial services sector and its immense economic and social contribution to the Barbados economy. We will hear more about the sector’s contribution from Mr. Downes later. It is this sector’s level of importance that should drive each and every one of us to continuously examine the business environment, highlight the challenges faced, and work together to find workable solutions. The issue of banks “de-risking” was raised at last year’s conference and has since developed into a major concern for the Caribbean region. The origin of this problem lies within the enacting of new international regulations intended to address money laundering and the financing of terrorism. It also requires international correspondent banks to be satisfied that their “front line” banks are also undertaking the same level of due diligence and that they know their customers. As recently as last week, the United States Comptroller of the Currency (Thomas Curry) announced that OCC may create new guidance to deal with de-risking. In his March 7th speech he said the Office of the Comptroller of the Currency is collecting data on banks de-risking decision-making processes. He said “Our goal is to identify current practices and possible gaps in existing policies and procedures for conducting periodic client risk evaluations and for making account termination decisions”. While it is too early to speculate if the OCC’s involvement will improve the decision making process, the Agency might require banks to conduct enhanced due diligence tests that require input from Senior Management before breaking ties with a foreign correspondent. To further add fuel to the fire, the Caribbean has been unfairly branded as “high risk” and as a result some of these banks have started to withdraw their correspondent relations to the Caribbean. Look at Belize! The larger banks have already severed relationships with banks there, the first being the Belize Bank, and subsequently other indigenous banks. This forced a closure of several indigenous banks leaving many businesses and individuals without a means to receive or make international payments. Western Union has withdrawn its services in the Bahamas, Cayman and the Turks and Caicos. As a result Fidelity Bank has closed its Western Union accounts in the Bahamas and the Cayman Islands. Closer to home an Antigua bank, CUB recently lost its correspondent banking support when a US correspondent bank terminated its relationship. In Jamaica, Barclays has advised the Jamaica National Building Society that it will be terminating its correspondent relationship on April 1st. In some instances the decision to withdraw correspondent banking services is based on low business volumes or low revenues. However, the focus on the Caribbean is not based on an objective assessment of the region’s risk, but reflects a lack of understanding of the region by risk managers who are largely unfamiliar with the Caribbean’s high regulatory and compliance standards. Last December, BIBA’s First Vice President, Gregory McConnie, and I attended a roundtable discussion hosted by the Financial Stability Board, the World Bank, the International Monetary Fund and the Central Bank of Barbados. The discussion focused on global initiatives to lower the risks associated with correspondent banking. These included the work international standard setters are undertaking to better measure, understand and address the challenges presented by the reduction of these important banking services. Another issue of concern to all of us is business facilitation. Unlike the withdrawal of correspondent banking services, this is an issue that is within our power to fix. There is now a greater need to improve our country’s ranking in the World Bank’s “Ease of Doing Business” index, especially given that the international business sector is losing some of its competitiveness due to new and expanding tax transparency laws and regulations in North America and Europe. On a more positive note, the TMF Complexity Index recently ranked Barbados 7th, in terms of “Ease of doing business” a significant improvement from the precious year when we were ranked 22nd. Within the Americas, Barbados was ranked an impressive 4th as a location to conduct business. Ease of doing business is critical for the sector to grow. We must continue to find ways of improving efficiency within our public and private sectors in order to enhance the attractiveness of Barbados as a jurisdiction from which to conduct business. It is hoped that through this conference, we can find a workable plan of action. Thank you for your attention.
Ms Connie Smith – Presentation at 2015 IBFS Conference
Protocol having been established, it gives me great pleasure to join Dr. Worrell and the Hon. Donville Inniss in welcoming you to this year’s International Business and Financial Services (IBFS) Conference. Each year, BIBA is pleased to support the Central Bank of Barbados in its efforts to bring together representatives from the public sector agencies key to the success of this sector, to dialogue with and share views with BIBA and other private sector representatives on how to further advance our collective goals. It is interesting to note that the Bank has identified the opening up of the Cuban market as one of the potential growth areas for the Barbados IBFS sector. The shift in United States policy that has created this potentiality could likely lead to more multinational companies targeting Cuba and, with a long-standing bilateral investment treaty and double taxation agreement between Barbados and Cuba already in place, I believe that we are well poised to capitalize on this interest. Ironically, as we sit and meet today to learn more Cuba, right at this very moment, history is being created in Panama at the convening of the Seventh Annual Summit of the Americas – for the first time in history, Cuba has a seat at the table for this Summit. I therefore look forward to the first panel presentation unlocking this potential for us. It is well recognized that Barbados has all of the factors necessary to continue to grow the international business sector. Indeed, we continue to show year-on-year growth in new entrants to the sector, even during the height of the international economic turbulence within the last seven years. The most recent figures show that Barbados continues to attract new IBC registrations in excess of 400 annually since 2007, and at an average rate of 458 new registrations annually over that period. In relation to international insurance, we continue to maintain our number at just over 240 active entities, and while on record our international banks have dwindled from 40 at the end of 2013, to 32 at the end of 2014, we should note that much of the business that was being carried on by companies holding banking licences, is now being conducted within IBCs, ISRLs, or just regular Barbados companies. However, we must remain ever cognizant of the challenges that threaten to undermine our growth potential. And unfortunately some of the more major challenges are not of our own making. The changes made to the domestic taxing environment in Canada last year have had a significant effect on a market segment that we have historically enjoyed. This is reflected in the number of entities currently holding banking licenses as I referenced earlier – another reason that I am keen to hear the presentations from the panel in a few minutes. Increasingly, some members of BIBA have been raising concerns with us about the hurdles they and their clients are facing as clients of local commercial banks. As was ventilated during our first BIBA luncheon seminar for this year, the strict requirements being imposed on international business clients by commercial banks is as a result of the risk profile with which Barbados is viewed by the international correspondent banks that mediate between the local commercial banks and the global financial community. This is an extremely untenable situation as Barbados seeks to fulfil the mandate of its sector’s strategic plan and become the International Business and Wealth Management Centre of choice in this hemisphere. It also does not bode well for our attempts to expand our treaty network into Africa and Latin America and attract more business from those source markets. I think that it is time that we refreshed our strategy in terms of expanding the correspondent banking relationships within our commercial banking sector and I am offering BIBA’s support to the Central Bank of Barbados in leading the development of a new strategy to attract new players into this arena. However, I must reiterate, as I always do, that if we are to keep the new businesses that we attract, and hold on to the ones that are already here, we must improve the ease with which we conduct business in Barbados. We need to put service level agreements in place that guarantee clients in the public and private sector certainty of process when they engage with a business facilitation agency. I would say that the recent implementation of guidelines for all public sector employees by the Office of Public Sector Reform is a step in the right direction and I would encourage that Office to undertake as its next project, to produce benchmarking guidelines for government agencies, especially the client-facing ones, so that there are standards to which they can be held accountable. Our judicial, business incorporation and immigration systems are the first places that I would recommend we start. On that note, we have a stimulating day ahead of us and far be it for me to delay the Minister in delivering his keynote presentation. I look forward to hearing from the presenters and yourselves on some of the key issues that I have raised, as well as the other topics under consideration, during the course of today. Thank you for your time and attention.
BIBA President’s Update January 2015
President’s Update delivered by Ms. Connie Smith, President of BIBA, at the January 2015 BIBA Luncheon Seminar, Hilton Barbados, Needham’s Point, St. Michael Protocol having been established, Good Afternoon Ladies & Gentleman, it gives me great pleasure to have so many of you join us this afternoon at our first Luncheon Seminar for 2015. This marks our first collaborative seminar with The Barbados Bankers Association and we look forward to many such cooperative initiatives in the future. At BIBA, we know there are many cross-cutting issues that affect both the international and domestic business sectors equally and we continue to seek to provide opportunities where these issues can be ventilated and solutions arrived at in a mutually beneficial way. This afternoon we are here to facilitate an exchange of views on commercial banking as we work together to ensure that the private sector is also contributing to improving the ease of doing business in Barbados. Before we launch into the meat of the matter, please indulge me for a few minutes as I update you on recent undertakings by BIBA. · This past Tuesday, a BIBA delegation met with the Minister of Finance and the Commissioner of the Barbados Revenue Authority (BRA), Ms. Margaret Sivers, to discuss a number of pressing issues affecting the international business sector. One of the matters on which we engaged them was the difficulty faced under the former Inland Revenue Department in having outstanding tax refunds owed to dissolved subsidiaries remitted to their parent companies. We are pleased to advise that the BRA has promised to establish a methodology for making these payments. · We are also satisfied that the Commissioner is committed to resolving the indebtedness to our companies in terms of outstanding Value Added Tax and Corporate Tax refunds as the BRA’s cash flow situation permits. · The Commissioner has also asked me to let you know that if any of you had previously submitted requests, for example a decision on a matter, she has asked that you resubmit your requests to the new BRA email address. The old mailboxes are choc full and while they are wading through them, this is appreciably taking some time. · In a recent meeting with the Minister of International Business, the Hon. Donville Inniss, we also raised challenges related to income tax concessions for expatriate staff in the sector. At the Minister’s request, BIBA is compiling a business case for maintaining these concessions so that we can continue to attract the international skills and talents required in and for Barbados as we build out our knowledge transfer base. We had also discussed with the Minister the difficulties being experienced in the granting of Special Entry and Reside Permits to High Net Worth Individuals and their families. As a result, a meeting is being convened with Minister Inniss, Senator The Hon. Darcy Boyce, Invest Barbados, the Chief Immigration Officer, and BIBA to resolve this matter. · BIBA also made recommendations to Minister Inniss regarding the addition of a representative from BIBA to the Barbados Treaty Negotiation Team. This recommendation was favourably received by the Minister and a Cabinet Paper is to be drafted to support this change. · We are also pleased to be able to update you on some legislative developments. A draft of the proposed Limited Liability Partnership legislation was received from the Ministry of International Business for review. Our Legal Profession Committee, along with the Institute of Chartered Accountants of Barbados, and the Barbados Bar Association, have all provided extensive feedback on this draft, which is being conveyed to the Ministry. The Incorporated Cell Companies legislation proposed by BIBA is now in the process of being drafted by the Chief Parliamentary Council’s (CPC) office. The CPC and the Ministry of International Business are also still reviewing the International Trust and Corporate Service Providers legislation to take into account objections that BIBA had made to some provisions of the draft Bill. I thank you for your attention and now, let’s move along to the main item on today’s agenda. The members of the panel are here as our guests to update us on the dynamic and oftentimes challenging environment that not only we see as challenging, but I am sure that they do as well. We hope to have a very strategic, unemotional discussion on the changing ecosystem and the way in which we can navigate the challenges while still achieving Barbados’ and our own firms’ strategic objectives. This is not intended to be a forum to deal with any individual or specific client situation. Let me encourage you to meet separately with the bankers afterwards on those issues. And with that, I ask you to welcome to the podium, our First Vice President, Mr. Andrew Alleyne, who will moderate the proceeding presentations and discussion.
BIBA Announces New Board for 2016-2017
The Barbados International Business Association held its Annual General Meeting on Thursday, June 16th, 2016 and a new board was appointed to handle the affairs of the organisation. The new board for 2016-2017 is as follows: President – Mr. Gregory McConnie 1st Vice President – Mr. Marlon Waldron 2nd Vice President – Ms. Julia Taggart Treasurer – Mr. Nicholas Crichlow Secretary – Ms. Cadian Drummond Directors: Mr. Elliott Barrow Ms. Janice Burke Ms. Melanie Jones Ms. Connie Smith Ms. Dominique Pepin Ms. Tara Frater Mr. Derrick Cummins BIBA’s Annual Report for 2015-2016 was also released. Please click here to view. It includes the President’s Report, as well as reports from the Executive Director and the various committees, such as the Legal Profession, Insurance, Banking & Wealth Management, Marketing and Communications, Tax and IBCs/Service Providers. A summary of the activities undertaken by the BIBA-Canada, BIBA Charity and an overview of International Business Week 2015 are also included.
No need to panic about Panama Papers Scandal
Thirty-four companies in Barbados are allegedly listed among the thousands named in the 11.5 million confidential papers leaked from the Panamanian law firm Mossack Fonseca, detailing the establishment of offshore companies for the global elite. However, Executive Director of the Barbados International Business Association (BIBA) believes that while this may be an area to watch, there is no reason for Barbados to panic. “Developments of this sort are typically a cause for concern for us, as Caribbean and Latin American international financial centres (IFC) are always tarred with the same brush,” says Mr Holmes. “However, we must be confident about what Brand Barbados stands for and focus on the continuous improvement of what this jurisdiction offers, both in terms of products and providers,” he said. The Executive Director made reference to the recently enacted Corporate & Trust Service Providers Act which has initiated the process of licensing and regulating firms providing corporate, trust and management services to international companies and investors. “The setting up of corporate structures in IFCs for the purpose of global tax minimisation is not an illegal activity,” states Mr Holmes. “However, since the beginning of the global financial crisis and its deleterious effect on the tax revenues of the developed countries the offshore financial centres have been targeted as the reason and made to suffer vilification and harassment”. “The motivation for this seems very much a political reaction to moral outcries of the citizens of these countries who, with their limited understanding of how economies work, are of the view that the companies that are practicing global tax planning are not paying their fair share of the tax and therefore engaging in something that is dishonest,” said the Executive Director. “Perhaps there are circumstances where the individuals behind the corporate structures are under a duty to declare the existence of these types of companies and when they don’t this may lead to the view that they are hiding something, or worse engaging in something that is illegal”. OECD’s Secretary-General Angel Gurría issued a statement that the Mossack Fonseca leak “shone the light on Panama’s culture and practice of secrecy”. He described Panama as “the last major holdout that continues to allow funds to be hidden offshore from tax and law enforcement authorities”, and said the OECD has been “consistently warned of the risks of countries like Panama failing to comply with the international tax transparency standards.” “One can only surmise from his comments that more pressure, and blacklisting / naming and shaming of this type will follow, whether it is warranted or not,” said Mr Holmes. “Barbados does not have a reputation for secrecy. We are perceived as a well regulated jurisdiction insisting on transparency,” he continued. “The question you may wish to ask is “If a list of companies incorporated and managed by a law firm in Delaware, Nevada or Wyoming was to be leaked would the global reaction be the same?” Minister of Industry, International Business, Commerce and Small Business Development, and Vice Chair of the Steering Group of the Global Forum on Transparency and Exchange of Information for Tax Purposes within the Organisation for Economic Cooperation and Development, Donville Inniss noted in a recent Press Release, that Barbados has long embraced transparency and the exchange of tax information between governments. As evidenced, Barbados has officially and publicly endorsed the OECD’s Global Standard for the Automatic Exchange of Information and has agreed to facilitate compliance with the US Foreign Account Tax Compliance Act. “Additionally, beyond being highly cooperative and transparent, Barbados’ position as a preeminent low tax jurisdiction attracts business of substance and ethical business structures that provide significant benefits to both domestic markets and the global economy,” said Minister Inniss.
BIBA partners with 12th Annual Canadian Captives & Corporate Insurance Strategies Summit
The Barbados International Business Association (BIBA) is now an official partner of the 12th Annual Canadian Captives & Corporate Insurance Strategies Summit taking place May 25-26, 2016 in Toronto, ON. The annual summit brings together over 100 risk management professionals including: current and prospective captive owners, captive managers, corporate insurance leaders and more. BIBA has partnered with the summit since its creation. “We have watched this forum grow from strength to strength over the years and it has asserted itself as the authoritative forum on captive insurance business in Canada,” says Henderson Holmes, Executive Director, BIBA. “Given the fact that Barbados is a major domicile for Canadian captive insurance companies we have supported this conference over many years now and will continue to do so into the foreseeable future.” This is the only event of its kind in Canada. The summit focuses on assisting those just starting out in captives or looking to fine-tune their captives strategy. Attendees hear first hand what drives captives and how to optimize their potential and ROI. “It makes great sense for us to support the efforts of the Canadian Captives Summit,” says Holmes. “Given, the long history of business and diplomatic relations between Barbados and Canada and our reputation for being able to facilitate the business interest of Canadian firms seeking alternative risk management solutions.” The event offers 18 interactive sessions, eight scheduled networking opportunities, three exclusive panels and over twelve hours of learning. Featured speakers on the program include: Patrick Walker, Senior Manager, Group Risk Financing, Rio Tinto Graham Sanderson, Regional Director, Risk Management, Vancouver Island Health Authority Lynn Tenerowicz, Director, Risk Management, Baystate Health Frank Naus, Vice President, Research, Hamilton Health Sciences Corporation David S. Platt, Director, Insurance Risk, Encana Services Company Ltd. Todd Henderson, Senior Director, Risk Engineering & Insurance, SNC Lavalin Visit the website to learn more. About the Annual Canadian Captives & Corporate Insurance Strategies Summit The Canadian Captives & Corporate Insurance Strategies Summit takes place every spring in Toronto and is currently in its 12th year. The summit gathers risk management & corporate insurance professionals from across Canada to discuss current challenges facing the risk sector. The purpose of the summit is to increase risk managers’ awareness of captive strategy, regulatory changes, tax updates and other investment opportunities. This year’s summit takes place May 25-26, 2016 in Toronto at the Sheraton Centre. For more information visit: www.captivesinsurance.com About Barbados International Business Association The Barbados International Business Association (BIBA) is a private sector organization comprising companies engaged in international business in Barbados and companies which are otherwise strategically associated with this sector. For more information visit: www.biba.bb For more information: Melanie Raffa | Marketing Manager Canadian Captives & Corporate Insurance Strategies Summit 2016 E: firstname.lastname@example.org P: 1-866-298-9343 x 209
BIBA announces new Board for 2015-2016
The Barbados International Business Association (BIBA) announced its new board for the period 2015-2016 at the Association’s recent Annual General Meeting. The new board members are: President – Mr. Andrew Alleyne 1st Vice President – Mr. Gregory McConnie 2nd Vice President – Mr. Marlon Waldron Treasurer – Mr. Nicholas Crichlow Secretary – Ms. Julia Taggart Directors of the Association comprise: Mr. Elliott Barrow Ms. Janice Burke Mr. Peter Douglas Ms. Melanie Jones Ms. Cadian Drummond Ms. Dominique Pepin Ms. Tara Frater BIBA’s Annual Report for 2014-2015 was also released. Please click here to view. It includes the President’s Report, as well as reports from the Executive Director and the various committees, such as the Legal Profession, Insurance, Banking, Marketing and Communications, Tax and IBC’s and Service Providers. A summary of the activities undertaken by the BIBA Charity, BIBA-Canada and an overview of International Business Week 2014 are also included. Executive Director, Henderson Holmes, thanked members for their past and continual support for the upcoming administrative year and beyond.