Considering the Consequences

The Development Implications of Initiatives on Taxation, Anti-money Laundering and Combating the Financing of Terrorism

image of Considering the Consequences
What have been the consequences of recent regulatory initiatives on international financial centres in small countries? This study of three small Commonwealth countries – Barbados, Mauritius and Vanuatu – suggests that the costs of implementing these new standards have exceeded any identifiable benefits for the countries concerned.

Moreover the main factor explaining the adoption of the new standards, in all three countries, is the fear of the consequences of being blacklisted by international organisations in the event of non-compliance, rather than any identified benefit in terms of increased competitiveness.

The authors consider how policy on anti-money laundering should be developed in the future, taking into account the particular concerns of small developing countries.

The book will be of interest to all those engaged in setting international standards for financial regulation, and those regulating the finance industry in both large and small countries.



Incremental Costs and Benefits of Enhancing the IFS Regulatory Regime in Barbados

Barbados has continued to maintain its reputation as a well-respected international financial services jurisdiction with high regulatory and supervisory standards, despite being listed by the OECD as a ‘tax haven’ in 2000. Indeed, without having to make any commitments to the OECD, Barbados was removed from that list in 2002 and was subsequently identified as a significant international financial centre (IFC) in the OECD report A Process for Achieving a Global Level Playing Field1 . As a result, Barbados was invited to participate in the Global Forum on Taxation and has been involved in providing information on transparency and exchange of information. It should also be noted that Barbados has a stand-alone information exchange agreement with the United States and in addition, all of Barbados’ double taxation agreements provide for the exchange of information on all direct taxes between the parties unless the entities involved are specifically excluded from the treaty. Barbados’ Financial Intelligence Unit (FIU) has also established formal Memoranda of Understanding with other FIUs relating to information exchange and is also part of an international network of FIUs that exchange information. These measures were all in place prior to the new international regulatory requirements.


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