Above: Jamaica Prime Minister Portia Simpson Miller
By the Caribbean Journal staff
Caribbean banks must consistently adhere to international standards, according to Jamaica Prime Minister Portia Simpson Miller.
The PM was making the call in an address to more than 200 delegates at the 39th Annual General Meeting and Conference of the Caribbean Association of Banks this week in Montego Bay.
Simpson Miller addressed the particular concern in the region for the upcoming implementation of the Foreign Account Tax Compliance Act in the United States, which will have a significant impact on the way regional banks operate.
The act is part of an effort by the United States to combat what it sees as tax evasion by US tax payers who hold offshore accounts.
“I do not need to tell a gathering of this nature about the increasing attention which has been paid to the financial services industry worldwide, particularly over the last four to five years,” she said. “In fact, some of the reactions to the sector from many governments can only be described as ‘hostile.’ It has been argued that the sector, in many instances, has been cavalier in the handling of funds of clients and depositors.”
Against that background, she said, she said she understood the need for the government to “ensure that taxation is equitable and those with the greatest income pay their fair share.
“From our vantage point, we have to make clear that even whilst recognizing their motivation, we should wish for consideration to be given to the possible negative repercussions on our institutions,” she said. “This is so, given the efforts which have been made to attract legal foreign exchange in our countries.”
It remained important that Caribbean institutions be required to meet international standards to avoid being labeled as the kind of centres which “accommodate” questionable financial transactions, she said.
“We in the Caribbean must never accept a label of being second best,” she said. “We have demonstrated that in certain fields, we are not only equal to anyone else in the world, but may I dare say, that we are superior to anyone else.”
She called on Caribbean banks to quickly identify their reservations, and then indicate the ways in which “we can assist with achieving the objectives of the FATCA legislation in ways which are not detrimental to the stability of our institutions.”