MINISTER of Foreign Affairs Dr Amery Browne was confident that Trinidad and Tobago was progressing towards being removed from the European Union's list of 12 countries deemed non-compliant for tax purposes.
He was speaking in the Senate on Tuesday in reply to a listed question by Opposition Senator Wade Mark.
The European Council on its website listed the dozen countries or "non co-operative jurisdictions for tax purposes" as American Samoa, Anguilla, Dominica (new), Fiji, Guam, Palau, Panama, Samoa, TTo, US Virgin Islands, Vanuatu and Seychelles. The website says the list was a tool against tax fraud/evasion, tax avoidance and money laundering.
Browne said TT was required to address four areas, namely "the Global Forum, transparency of beneficial ownership information of legal arrangements, OECD BEPS Inclusive Framework and the administrative fine regime under recommendation 35 of the Financial Action Task Force (FATF.)"
The OECD (Organisation for Economic Co-operation and Development) is an intergovernmental economic organisation with 37 member countries whose aim is to stimulate economic progress and world trade. BEPS refers to base erosion and profit shifting (BEPS), which are tax-planning strategies used by multinationals that exploit gaps and mismatches in tax rules to avoid paying tax.
The four areas were mandated by the European Commission of the European Union (EU.)
Browne said the Government was actively pursuing extra reforms to comply with the EU's tax=governance criteria. Further, the Government was also fully actively talking with the Global Forum, the EU envoy to TT and EU officials in Brussels, Belgium, about technical assistance in these matters.
"As at April 7, TT is now scheduled by the Global Forum to undergo its phase two peer review in 2022 which will set an action plan to address all the different legislative and potential implementation deficiencies via technical working sessions between the Global Forum and TT for a full implementation within the first quarter of 2022."
Browne spelt out how non-compliance has affected day-to-day banking in TT.
"Domestic banks have reported increased processing fees for some banking transactions and difficulties with electronic transfers in some countries in the EU. Some banks have confirmed their correspondent banks (in the EU) require the implementation of additional due diligence measures for certain customers/sectors."
He said the Banker Association reported increased due-diligence scrutiny by some central banks of its anti-money laundering/counter-trafficking structure, processes and controls, plus increased scrutiny of wire transactions to and from TT.
Browne said the inclusion of TT on the EU's list has had "some adverse impact" on financial and trading relationships with EU countries.
He blamed the situation on the previous government's alleged failure in 2010-2015 to address the Global Forum peer reviews and resultant requirements.
"Fortunately, with TT's successful removal from the FATF ICRG (International Co-operation Review Group) 'grey list' in 2020 and with the passage and implementation of a host of laws and administrative measures yielding evidence of the successful operationalisation of laws and processes, TT has a clear exit strategy from the list of 12 countries considered to be non-compliant by the European Union."