White House Economic Adviser Larry Summers told a media briefing that during the Summit of the Americas in Trinidad and Tobago last week, international and US response to nations that are used to hide taxable income did come up. US President Barack Obama reportedly urged such nations “towards greater transparency”, while acknowledging the need for time in which to do this. *”Some of the countries that have benefited from their status as havens noted how important those benefits had been to their economies,”* says the Economic Adviser. *”The President indicated understanding of their situation and willingness to work constructively on transitions.”*
Following their meeting with the US President on Saturday, the heads of government met US Senators for specific discussions concerning the proposed move by the US to enact anti-tax haven legislation. According to the incoming Chairman of CARICOM, Guyana’s President Bharrat Jagdeo, *”the US Senators promised that the legislation will not go forward without the input of Caribbean leaders.”* The US legislators reportedly also expressed no interest in “naming and shaming” Caribbean countries where there are transparent regimes.
Grenada’s Prime Minister Tillman Thomas also says he believes the discussions with the United States and Canada at the Summit stand to bear fruit. *”The discussions suggest a new way of doing business with the Caribbean from both countries,”* he said, adding that the relationship with the United States and the Caribbean is set to improve and deepen.
Going into the Summit, several Caribbean nations had expressed concern over the proposed US legislation. President Jagdeo pointed out that the region is not interested in the proceeds of money laundering and tax evasion but added that, by the same token, it does not want the competitive advantage that it enjoys in the financial sector to disappear by blanket pieces of legislation that deal the region an unfair hand.
Last week in St. Kitts and Nevis, Prime Minister Dr Denzil Douglas, had indicated that the Caribbean region needs to explain how important financial services are to Caribbean economies. *”We will need to ensure that not only President Obama understands the implications for the small economies here in the Caribbean region, but also the Congressional persons who would be there. We are hoping that we would be able to have bilateral talks with them and bring them up to date on our own perspective on this matter.”*
The Rt. Hon. Hubert Ingraham, Prime Minister of the Bahamas, confirmed on Friday that one of the key matters of interest to The Bahamas during scheduled bilateral meetings between the Caribbean Community (CARICOM) and both the United States and Canada would be the tax haven initiative of the two countries. At that time, he pointed out that The Bahamas currently has a Tax Information Exchange Agreement (TIEA) with the United States, which has worked very well.
U.S. Senator Carl Levin (D-MI) in March introduced S. 506, the “Stop Tax Haven Abuse Act”, an expanded version of previous legislation he co-sponsored in 2007 with then Senator Obama. A companion House bill, H.R.1265, was also introduced by Rep. Lloyd Doggett (D-TX) and other Democrats. At that time, U.S. Treasury Secretary Timothy Geithner said he and President Barack Obama’s administration supports legislation that would make all Americans who use offshore tax havens presumed guilty of tax evasion.