THE big news this week on the international scene concerning St. Lucia was that “The EU officially took out eight countries from its blacklist for tax havens outside of the bloc, leaving only nine jurisdictions on the list” (from Politico in an article entitled “South Korea Was One of the Countries Moved Off of the Blacklist”). The list of countries removed reads like this: “Barbados, Grenada, South Korea, Macau, Mongolia, Panama, Tunisia and the United Arab Emirates” (ibid).
This, of course, all goes back to the initial announcement of the EU blacklist in the first place. Per a BBC News report, “The European Union has published its first blacklist of tax havens, naming 17 territories, including St. Lucia…”
Wait, what! We’re a tax haven?
According to an article in offshore-protection.com, “St. Lucia offers a wide range of offshore banking and financial products and services. Enabled by the International Business Companies Act 1999, the diversity of the offshore sector is drawing many international investors and companies, making the relatively unknown island a new and exciting place to form an offshore company.”
The article goes on to say, “Offshore financial services offered by St. Lucia include the establishment of offshore trusts, mutual fund companies, insurance companies, and offshore bank accounts and formation opportunities offering an unprecedented array of possibilities…”
Ironically, (since this article preceded the EU blacklist of 2017) it went on to say that “St. Lucia’s financial system has never been blacklisted and has escaped international scrutiny and foreign governmental pressure to disclose details of its offshore financial operations.” Escaped international scrutiny that is, until now.
With St. Lucia scrambling to get off of the EU blacklist, it will no longer be considered “a paradise for international investors seeking safe and reliable offshore opportunities.” (ibid)
Not only are we a tax haven, but we have a very high standing in the world of tax havens. In an article entitled, “The five best offshore tax havens for bank secrecy according to the website nomadcapitalist.com, St. Lucia is listed as “Tied for fifth place…” despite the fact, as the article points out, the country has been “trying to becoming more “compliant” and has taken steps to ratify international treaties relating to financial transparency.” (ibid)
One of those steps to increase financial transparency was the signing of the “Multilateral Convention on Mutual Administrative Assistance in Tax Matters.” (oecd.com article entitled “Saint Lucia expands its capacity to fight international tax avoidance and evasion”). As the article states, “Saint Lucia became the 107th jurisdiction to join the Convention. Hon. Allen Michael Chastanet…signed the Convention in the presence of the OECD Secretary-General, Angel Gurría.” (ibid)
However, acts like these did not prove sufficient to satisfy the charlatans at the EU, since one year after signing the above-referenced Convention, St. Lucia was blacklisted.
Why Were We Blacklisted?
Well if Philip J. Pierre, Leader of the Opposition is to be believed, “It is because of negligence of the government (UWP) that they did not give the EU a commitment (to commit to changes in our tax code by December 2018.)
He said this, knowing full well that Saint Lucia has been not only a tax haven, but one of the most infamous tax havens in the world, under both administrations. The typical domestic party politics will not account for, nor resolve the actions of the EU, regarding our island nation.
Furthermore, that assessment does not take into account the larger geo-political facets of this issue, nor the role the recently-revealed “Panama Papers” have played in the EU’s inappropriate interference in the domestic affairs of not only our nation, but nations as powerful as South Korea.
As this htsnews.com article reads, “The (blacklist) follow(s) the leaking of the Panama Papers and the Paradise Papers, revealing how companies and individuals hid their wealth from tax authorities around the world in offshore accounts.” As the abovementioned poignantly points out, the timing of the blacklist in relation to the release of the Panama and Paradise Papers should not be ignored when trying to find out why it’s happened.
The EU is not doing this out of some high sense of morality, some need to correct tiny nations like ours, who may not be well instructed on the traditional monetary values of the West. Just one look at the EU’s immigration policy should tell you that they could not care less about traditional Western values.
This issue, not dissimilar to the vast majority of issues, comes down to money and the EU’s ability to acquire as much of it as possible.
When one takes a look at the EU Budget in 2011 of €129 billion, and how much member states contributed to that total (€103.2 billion), one sees that the EU, financially, is very dependent on the contributions of its individual member states. The governments of those member states, in turn, like all governments in the world, receive a significant amount of their own capital from taxes.
Starting to see the link?
The EU Big Three of Germany (€19,671.10 billion), France (€18,050.84 billion), and the U.K. (€11,273.41 billion) contribute an estimated €49 billion to the EU, almost half of its total contributions. (No wonder the U.K. voted for Brexit).
The maximum income tax rates of the EU’s Big Three also help to paint the picture more clearly. With France at 49%, Germany at 47.5% and the UK ranging between 47% and 62%; as well as the other notably high tax rates in EU member states such as Spain (45%), and Greece (65.67%); is there any wonder that with such monstrous maximum income tax rates, the richest people in those countries constantly look to place their money in tax havens like St. Lucia
With the EU so dependent on the contributions of its individual members, who in turn are dependent on the tax contributions of their respective citizens, it is in the EU’s best interest to ensure that no individual or corporation is able to dodge taxes, especially not through easy access to tax havens like ours.
Thus we have been blacklisted because the EU thinks (perhaps rightly so) that it is easier to get us to change our domestic tax policies to make it more difficult on European tax evaders than it is to bring those evaders to heel through their own EU laws.
The Independence Issue: It’s the Principal of the Matter.
On February 22, 1979, St. Lucia (allegedly) became an independent nation; a nation founded on the principles of “democracy” where the voice of the people through Parliament is sovereign. When last, though, did you see our Government and Opposition jumping through so many hoops to try to satiate a body that is not even democratically- elected? When last did you see our Government (whichever administration) move so quickly to answer the cry of its own electorate? Yet, simply because the EU has decided to blacklist our country over one of our domestic policies, we have decided to change. Is that democracy? Is that sovereignty?
The Government should at least wait for the EU to threaten St. Lucia with sanctions, before bowing down to its colonial masters. The way we as a country have decided to deal with this international issue definitely sheds some light into who really has the power. It’s not democracy; it’s not “the people” as is so often preached.
The EU, quite frankly, should keep its nose out of our domestic affairs. It’s either they recognize us as a sovereign and independent nation, or they don’t. Stop stringing us along.
The word “hypocritical” doesn’t quite cut it when it comes to that tyrannical organization. Pretending democracy while it dictates policy not only to its member states apparently, but also to nation states such as ours, who are not even within their (Communist) bloc.
Aurore Chardonnet, Oxfam’s EU policy adviser on tax and inequality, (so you know she’s not anti-tax) noted just how hypocritical the EU’s blacklist of non-EU countries is when she said, “It is no secret that tax havens remain at the heart of the EU, with four European countries actually failing the EU’s own blacklisting criteria,” and that “EU governments should tackle tax havens within the EU with the same urgency they are pressuring other countries to adopt tax reforms that were decided by an exclusive club of rich countries.”
These tax reforms, as she pointed out, “were decided by an exclusive club of rich countries.” We (although independent) were not consulted. The electorate of this country was not consulted. The EU decided that we were breaking rules they made up on the fly, because they found out that not everyone within their bloc was secured as tightly within their tyrannical tax system as they’d previously thought.
It is their astronomical tax rates which have driven their own citizens to countries like ours. Countries they see fit to blacklist while four European countries are actually failing their own blacklist criteria. How this does not transgress at least one international law, I do not know.
Am I for St. Lucia’s tax haven status? Obviously not! I would love it if our Governments show as much tax exemption love to locals and local businesses as they do these shady foreign investors. Why quarrel with the EU’s blacklist then? Well, it’s the principle of the matter. We are an independent nation (allegedly) and we ought to have the right to decide our own domestic policies without the threat of interference from countries and blocs far more powerful than we are.