CARICOM remains divided at OAS on Venezuela issue

Countries in the Caribbean remain divided on the way forward in dealing with the protracted political crisis in Venezuela.

At a meeting of the Permanent Council of the Organisation of American States (OAS) on Tuesday, four Caribbean countries voted to “accept’ the nomination of a candidate supported by Opposition leader Juan Guaido, who is seeking to replace President Nicolas Maduro as head of state in the South American country.

St. Lucia, Jamaica, Haiti and the Bahamas voted in favour of accepting Gustavo Tarre “as the National Assembly’s designated permanent representative, pending new elections and the appointment of a democratically elected government,” in Venezuela.

But Antigua and Barbuda, Dominica, Grenada, St. Vincent and the Grenadines, Suriname, joined Venezuela in voting against the measure, while Barbados, Guyana, St. Kitts- Nevis, and Trinidad and Tobago abstained. Belize was the only CARICOM country absent when the vote was taken on Tuesday.

The OAS Permanent Council is chaired by the United States, which is at the forefront of efforts to remove Maduro, who was sworn into office for a second consecutive term earlier this year, from power.

The four CARICOM countries that voted in favour of the resolution have supported the so-called Lima Group that is seeking Maduro’s removal and last month met with United States President Donald Trump on Venezuela.

CARICOM has adopted a united position on the Venezuelan matter and in February, the regional leaders at their inter-sessional summit in St. Kitts-Nevis reiterated their position of non-interference in the internal affairs of Venezuela and said they were prepared to mediate in the process to bring about a peaceful resolution to the crisis.

The vote at the OAS came on the same day that the St. Lucia government said that it was re-affirming its position that the Caribbean must remain a zone of peace and that there should be “no third state intervention” in Caracas.

Sir Neville Cenac, Governor General St. Lucia

Governor General, Sir Neville Cenac, delivering the traditional Throne speech at the start of a new parliamentary session in St. Lucia, in which he outlined the government’s priorities, said that in the case of Venezuela, “we have reaffirmed that the Caribbean must remain a zone of peace, consistent with the provisions of the Treaty for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (Treaty of Tlatelolco) and the Proclamation of Latin America and the Caribbean as a Zone of Peace, endorsed by all 33 Member States of the Community of Latin American and Caribbean States (CELAC).  “We are unequivocal in our view that there should be no third state intervention in the internal affairs of Venezuela and will continue to resist any action that could jeopardize the peace, safety or security of the Caribbean region,” Sir Neville told legislators.

The Governor General also said that in July, St. Lucia will assume the chairmanship of the 15-member CARICOM grouping, adding “notwithstanding the matters that divide us, we must continue to deepen the integration movement to the benefit of all member states.

“We must take concerted action to combat climate change, we must find common creative ways to resist efforts to undermine our economic bases.  Above all, we must identify the means of pursuing individual developmental interests without rending asunder the ties that bind us as a region,” the Head of State told legislators.

Grenada unsure of meeting LIAT’s request

Dr. Keith Mitchell, Grenada’s Prime Minister

Grenada’s Prime Minister Dr. Keith Mitchell said his country would do its own analysis before shelling out US$487,000 to cash strapped Caribbean airline LIAT.

His announcement comes as Grenada is among eleven Caribbean shareholding countries that have until Friday March 15 to respond to the airline’s minimal revenue guarantee (MRG) proposals.

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Seven Caribbean countries BLACKLISTED

Seven Caribbean Countries have been placed on the European Union Commission's list of non-cooperative jurisdictions.

Trinidad and Tobago is among seven Caribbean countries named on the revised financial blacklist of the European Union (EU).

The updated list follows an assessment of 92 countries by the Commission of Finance Minister of the EU based on three criteria: tax transparency, good governance and real economic activity, as well as one indicator, the existence of a zero corporate tax rate.

The report published on March 12 states that Trinidad and Tobago continues to be recognized as a non-cooperative jurisdiction concerning taxation because it “has a “Non-Compliant” rating by the Global Forum on Transparency and Exchange of Information for Tax Purposes for Exchange of Information on Request”.

It added that the country’s “commitment to comply with criteria 1.1, 1.2, 1.3 and 2.1 by the end of 2019 will be monitored.

Barbados, which was on the grey list, had now been put back onto the blacklist, after failing to give a commitment to amend or abolish what the EU described as a “harmful preferential tax regime”. The EU report stated Barbados had replaced one “preferential tax regime by a measure of similar effect and did not commit to amend or abolish it by the end of 2019”.

The report said Aruba and Belize had not yet amended or abolished one harmful preferential tax regime; but the Commission will monitor Belize’s commitment to amend or abolish its newly identified harmful preferential tax regime by the end of 2019.

It said Bermuda “facilitates offshore structures and arrangements aimed at attracting profits without real economic substance and has not yet resolved this issue” and “Dominica does not apply any automatic exchange of financial information, has not signed and ratified the OECD Multilateral Convention on Mutual Administrative Assistance as amended, and has not yet resolved these issues”.

“US Virgin Islands does not apply any automatic exchange of financial information, has not signed and ratified, including through the jurisdiction they are dependent on, the OECD Multilateral Convention on Mutual Administrative Assistance as amended, has harmful preferential tax regimes, did not commit to apply the BEPS minimum standards and did not commit to addressing these issues.”

Antigua and Barbuda, St. Kitts and Nevis and St. Lucia are jurisdictions “committed to amend or abolish harmful tax regimes by end 2019,” the EU report said.

The Bahamas, British Virgin Islands and Cayman Islands meanwhile are described as jurisdictions “committed to addressing the concerns relating to economic substance in the area of collective investment funds, have engaged in a positive dialogue with the Group [EU Commission] and have remained cooperative, but require further technical guidance, were granted until end 20192 to adapt their legislation”.

In a statement, the Commission has described the act of blacklisting countries, which started in 2017, as a “true success with many countries having changed their laws and tax systems to comply with international standards”.

It said that Tuesday’s “update shows that this clear, transparent and credible process delivered a real change: 60 countries took action on the Commission’s concerns and over 100 harmful regimes were eliminated.

“The list has also had a positive influence on internationally agreed tax good governance standards,” the release from the EU said.

“The EU tax havens list is a true European success. It has had a resounding effect on tax transparency and fairness worldwide”, said Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs.

“Thanks to the listing process, dozens of countries have abolished harmful tax regimes and have come into line with international standards on transparency and fair taxation. The countries that did not comply have been blacklisted, and will have to face the consequences that this brings. We are raising the bar of tax good governance globally and cutting out the opportunities for tax abuse.” 

The UE said the next steps include sending letters to blacklisted jurisdictions explaining the decision and how they can be de-listed; continue monitoring jurisdictions that have compliance deadlines; and continue to provide technical support and clarifications whenever needed and to discuss any tax matters of mutual concern.