Blacklist of `hot money havens' damaging to investment prospects - CARICOM Stabroek News July 16, 2000 The CARICOM Heads of Government have expressed grave concern at a recent series of "orchestrated activities" by the G-7 countries which they said were designed to impair the competitive capacity of Caribbean countries in providing global financial services. A statement on the issue was released following the conclusion of the Twenty-first Meeting of the Conference of Heads of Government of CARICOM, earlier this month, where there was an extensive exchange of views on the subject. The Organisation for Economic Cooperation and Development (OECD) has formulated a Harmful Tax Policy which has blacklisted 35 countries, including ten CARICOM states. The countries were blacklisted because it was felt by the developed countries that aspects of the laws of the 35 states were too lax and could facilitate money laundering. "[The CARICOM Heads of Government] condemned the actions of the OECD, in particular, as contrary to the tenets of a global market economy promoted by G-7 countries. They reiterated that the proposed OECD actions have no basis in international law and are alien to the practice of inter-state relations," the statement said. The heads reaffirmed their commitment to fight money laundering and all other forms of financial crime. They drew attention to their call for all member states to accelerate their programmes of introducing international best practices in their regulating of the financial sector and the strengthening of their legislation and enforcement machinery. The statement said the heads analysed in the detail the May 26, 2000, report of the Financial Stability Forum created by the G-7 in 1999 to enhance market supervision and surveillance following the financial crisis in Asia, Brazil and Russia. It was stated that the heads were alarmed that the Forum adversely categorised Caribbean jurisdictions with Offshore Financial Centres, based on their unilateral evaluation of the quality of supervision of these even as its report found that "offshore financial activities are not inimical to global financial stability." The heads also studied the June 22, 2000, report of the Financial Action Task Force (FATF) which listed some countries as "non-cooperative jurisdictions" in the prevention of money laundering. They regretted that this listing was made even though the Caribbean Financial Action Task Force, the regional counterpart of FATF, had advised that Caribbean jurisdictions were making significant progress in tightening their money laundering regulatory and legislative framework. The heads also reviewed the OECD report of June 26, 2000, which listed jurisdictions as tax havens, because these countries have competitive tax regimes and have not agreed to bind themselves to the elimination of policies which the OECD had unilaterally determined to be "harmful" to its members. The heads noted that each report was prepared by bodies on which the Caribbean had no representation and was based on incomplete information and on standards unilaterally set by these bodies. The conference deplored the fact that the lists were published with the objective of tainting jurisdictions in the eyes of the investment community and the international financial market. The heads remained convinced that international rules and practices must evolve from genuine consultative processes and in international fora in which all interests were represented. They affirmed that international rules must be made and applied democratically based on accepted principles and norms. In this regard, the heads again expressed their readiness to address any concern of the OECD in the appropriate multilateral forum. Follow the goings-on in Guyana in Guyana Today