MONTEGO BAY – Prime Minister the Most Hon. Portia Simpson Miller, is urging regional financial institutions to ensure that they consistently meet international standards.
Mrs. Simpson Miller, who was addressing over 200 delegates participating in the 39th Annual General Meeting and Conference of the Caribbean Association of Banks Inc. on November 15, at the Montego Bay Convention Centre in Rose Hall, said member institutions of the regional body should focus on collaboration between membership and the regulatory authorities, in order to improve and maintain efficiency in the industry.
The Prime Minister also observed that there was concern about the impact of the Foreign Account Tax Compliance Act (FATCA), passed into law in the United States (US) in 2010, and which should come into effect in January next year. FATCA was enacted as part of provisions under the Hiring Incentives to Restore Employment (HIRE) Act, and is an important development in the US' efforts to combat tax evasion by US tax payers with investments in 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… 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," Mrs. Simpson Miller said.
"Against that background, let me be frank and state that as a head of government, I certainly understand the need for each national government to seek to ensure that taxation is equitable and those with the greatest income pay their fair share," she stated.
The Prime Minister advised everyone not to start off with a 'knee jerk' reaction of opposition.
"From our vantage point we have to make it clear that even whilst recognising their motivation, we would wish for consideration to be given to the possible negative repercussions on our institutions. This is so, given the efforts which have been made to attract legal foreign exchange into our countries," she pointed out.
The Prime Minister noted that increasingly, institutions within the Caribbean would be required to meet international standards, and that it was in the best interest of all concerned to avoid being labeled as centres which "accommodate" questionable financial transactions.
"We in the Caribbean must never accept a label of being second best. We have demonstrated that in certain fields we are not only equal to anyone else in the world, but may I daresay, that we are superior to anyone else.
"I therefore say to the Association (of banks), let us move swiftly to identify our reservations. Let us indicate the ways in which we can assist with achieving the objectives of the FACTA legislation in ways which are not detrimental to the stability of our institutions," the Prime Minister told delegates.
The 39th Annual Conference of the Caribbean Association of Banks is being held from November 14 to 17, under the theme, "Partnering for regional transformation, development and growth – empowering the financial services sector".