The International Financial Services Authority (IFSA) has described the action taken by France to ‘blacklist’ certain countries, including St. Vincent and the Grenadines, and to apply financial sanctions by March 1, 2010, as “particularly objectionable”.{{more}}

A release issued by IFSA on February 23 said there is already a deadline of March 31, 2010, stipulated by the Organization for Economic Cooperation and Development (OECD) in order for countries to demonstrate their commitment to implement the internationally agreed tax standard (by establishing at least 12 Tax Information Exchange Agreements (TIEA)), and that deadline has not as yet been reached.

The IFSA also said negotiations are presently ongoing between France and SVG to sign a TIEA.

“The proposed ‘blacklisting’ by France of certain countries, including SVG, therefore comes as a surprise, in view of the present circumstances. France is a member of the OECD and has gone outside the realms of the OECD decision of waiting for March 31 2010, to take such action. France’s present actions can only be described as unfair and arbitrary,” the release said.

Indeed, the release indicates that on Monday, February 22, 2010, St Vincent and the Grenadines (SVG) and France both initialed their acceptance of the proposed TIEA Agreement, which will be officially signed shortly through an exchange of letters. Minister of Finance Dr Ralph Gonsalves will sign this TIEA on behalf of this country.

France had alleged that it is taking action against countries which are making late concessions to stay off the ‘blacklist.’ However, the IFSA release said “SVG made contact with France since October last year to seek the establishment of a TIEA with SVG, and obtained no response whatsoever.”

Prime Minister and Minister of Finance Ralph Gonsalves has indicated his intention to write to the French President, voicing this country’s objections to the present blacklisting, the release said.

On Monday, January 15, 2010, the BBC Caribbean News reported that France had drawn up a ‘blacklist’ of what it views as uncooperative offshore financial centres. The French Government is reported to have said that it will impose heavy taxes on domestic firms that have operations in 18 countries it considers tax havens. The Caribbean countries on the French list include Anguilla, Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines (SVG).

In April 2009, SVG and several Caribbean countries were ‘grey listed’ by the Organization for Economic Cooperation and Development (OECD) signifying that SVG is a jurisdiction which has ‘committed to the internationally agreed tax standard but has not yet substantially implemented’ its commitment.

In order to demonstrate its commitment to implement the stated standards, SVG has already established nine (9) Tax Information Exchange Agreements (TIEAs) with the following countries: Aruba, Austria, Belgium, Denmark, Ireland, Liechtenstein, the Kingdom of the Netherlands, the Netherlands Antilles, and the United Kingdom of Great Britain and Northern Ireland.

“Though no new TIEAs were signed since January 18, 2010, (the UK and Northern Ireland TIEA), SVG expects to meet the appropriate OECD targeted number of TIEAs (12) by March 31, 2010. This is because SVG is in advanced stages of negotiations for the establishment of TIEAs with several other countries.

“Australia and New Zealand have already confirmed that signing would take place in mid March, and Sweden, Norway, Finland, Iceland, the Faroes, and Greenland, through its Nordic Council representative, have indicated that a signing is imminent for March 24, 2010. By March 31, 2010, SVG, therefore, expects to have at least 18 TIEAs signed and at least 2 more to be signed. Canada has recently responded to SVG to confirm that it is interested in establishing a TIEA with this country, and negotiations are ongoing to finalize an Agreement.

“Based on SVG’s progress thus far with the establishment of TIEAs, it bears emphasis that there is presently a clear and legitimate expectation that SVG would be white listed by the OECD by March 31st 2010,” the release said.