NASSAU: The Bahamas has warned that the high costs associated with the U.S. Foreign Account Tax Compliance Act (FATCA) are threatening to undermine the financial services industry within many Caribbean Community (CARICOM) member states.
“All member states must undertake legislative amendments, institutional reform and human resource retraining to comply with the Act,” said Minister of Financial Services, Ryan Pinder. “Technical assistance to address these concerns needs to be explored.”
During the sixth CARICOM-United States Trade and Investment Council meeting, held in the Bahamas last week, Pinder said although most CARICOM member states have signaled their intention to sign reciprocal Inter Governmental Agreements with the U.S., the Bahamas has opted to sign a non-reciprocal Inter Governmental Agreement.
“However, the high costs associated with compliance with the U.S. Foreign Account Tax Compliance Act which aims to combat tax evasion by U.S. persons with non U.S. accounts, threatens to undermine the financial services industry within many member states,” he said.
Pinder said that the meeting provided an opportunity for senior officials from the Caribbean and the United States to provide updates on issues that affect trade between them.
During the meeting, discussions were held on the applications of some CARICOM countries seeking to receive beneficiary status under the Caribbean Basin Partnership Trade Agreement (CBTPA). Pinder said the agreement expands the items that can receive preferential treatment under the Caribbean Basin Economic Recovery Act and provides Caribbean Basin Initiative beneficiary countries with the possibility for increased market access into the U.S. market.
“However, as beneficiary status under the CBTPA is not automatic but must be approved, the Bahamas and five other CARICOM member states have applied to receive beneficiary status,” he said.