Central Bank of Barbados : Governor Haynes Comments on Barbados’ Blacklisting

Governor Haynes Comments on Barbados' Blacklisting

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Central Bank Of Barbados

Created 29 Oct, 2020

General Press Release
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Central Bank of Barbados Governor, Cleviston Haynes, addressed Barbados' recent blacklisting during the organisation's October press conference.

We are concerned about the blacklisting because of its timing - in the middle of the pandemic while we are navigating an IMF programme. That is obviously a source of concern.

We are also concerned by the rationale used for listing us. In the one case, we are working with the FATF (Financial Action Task Force) to address issues that have been identified in our mutual evaluation reports. While the FATF opines that we have these deficiencies that have to be addressed, my understanding is that it is not the intention of the FATF for countries to be penalised while they are working toward a solution.

As it relates to the more recent issue with the Global Forum, these are issues that were previously addressed, and which, it is my understanding, we have worked over the past two years to address. This is something based on ancient history, and therefore it is untimely and undeserving, and unwarranted.

Potential Implications

Some of this may not be reversed before February next year, and that creates issues for some in the international business sector, certainly those who are operating out of Europe because some of their transactions may be difficult to complete. They are now subject to enhanced due diligence, and in some cases, institutions don't necessarily take the time to find out more about the particular country; they say 'this country is on the list, so we're not dealing with it.' This makes it difficult for some of these transactions to be executed. If that persists, then the entity may decide, 'Do I really want to stay in a jurisdiction where I cannot execute my transactions?' That is the risk that we face with this blacklisting, and that is why it is so pernicious; it can undermine the overall economic strategy which we have tried to build.

Contribution of the International Business Sector

One of the things we've tried to do over the last 30 to 35 years is to diversify our economy, so that we're not standing on one leg. This year, having the international business services sector has proven to be advantageous to us. You would see that our corporation taxes is the one thing that was able to perform during this down period, and in part, that is due to the international business sector.

Obviously, it is based on their incomes in the previous year, but it has helped us in the current year to be able to maintain a reasonable level of revenue. Revenue has fallen, but it would have been worse but for the international business sector contribution to corporation taxes, and therefore it would put us in a pickle if we did not have access to the increased corporation taxes that we had during the second quarter.

So we are very concerned, both in terms of why this has been done and how it has been done, but also the potential impact that it could have if it is prolonged, and therefore we are working behind the scenes to bring this to some closure that will enable the sector to have certainty as to what the future holds.

This statement was given in response to a media query during the Central Bank of Barbados' October press conference.