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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.

English

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Regulation of the Barbados International Business and Financial Services Sector

Barbados is characterised as a low-tax jurisdiction, with a long-standing reputation for a sound legal framework and high regulatory and supervisory standards. The success achieved to date in attracting international business is reflective of the extensive treaty network of double taxation agreements and bilateral investment treaties with several countries, including most importantly the United States and Canada, which encourage transparency and the establishment of a commercial presence. In addition, the industry benefits from effective co-operation between government and the private sector on legislative reforms and promotion. As such, legislative amendments have been implemented in response to changes in the international business environment in an effort to capitalise on new opportunities. A legal separation between the international business services industry and the onshore financial sector is maintained in Barbados, and any activity between the two requires the special permission of the Minister of Finance. This effectively limits the potential for the transmission of contagion effects between the international business and the domestic financial sectors.

English

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