SVG on track to be removed from ‘grey list’

With just over three months before the deadline, this country appears to be on track to being removed from the ‘grey list’.{{more}}

The International Financial Services Authority (IFSA), in a press release, stated that St. Vincent and the Grenadines has made significant progress in establishing the required minimum 12 Tax Information Exchange Agreements (TIEAs) with other countries in an effort to being removed from the ‘grey list’ that it has been placed on since April this year.

St. Vincent and the Grenadines and a number of OECS countries had been placed on this list by the Organization for Economic Cooperation and Development (OECD), for what that organization sees as failure to implement internationally tax standards which were agreed.

If the March 30, 2010, deadline comes and these stipulations are not met, this country could be placed on the ‘black list’ and sanctioned – a familiar and uncomfortable financial position to be in.

St. Vincent and the Grenadines was placed on the black list in the past and had been removed in 2003.

Prime Minister Dr. Ralph Gonsalves, commenting on the situation at last Thursday’s press conference at Cabinet room, said that the country has been in extensive negotiations with the OECD and a number of countries, to make sure that we are not relegated once again to the black list.

“It was a tremendous struggle (being on the black list), and that affected our financial system, particularly with our National Commercial Bank.

“Much as it is offensive to us and to our independence and sovereignty, we have to fall in line and do certain things to hold our indigenous banking sector in some viable way.”

These agreements, according to the IFSA press release, are required to be qualitative, meaning that they should not be about the number of agreements but also in accordance with the OECD suggested template for such agreements.

To date, the release stated, St. Vincent and the Grenadines has established TIEAs with seven countries: Aruba, Austria, Belgium, Denmark, Liechtenstein, The Kingdom of the Netherlands and the Netherlands Antilles.

Negotiations are currently being held with Australia, Germany, Ireland, New Zealand, the United Kingdom and the Nordic Alliance (Sweden, Norway, Finland, Iceland, The Faroes and Greenland).

Dr. Gonsalves said these negotiations are time consuming due to the fact that various countries are racing to meet next year’s deadline.

“Clearly there are a few grey listed and black listed countries that want to negotiate and everybody (is) trying to get ahead of each other; it’s a treadmill. Sometimes you feel like if you are going up a down escalator. But that is the nature of the business.”