Under pressure from the United States, legislators in Grenada have passed the Foreign Account Tax Compliance bill 2017, which provides for Washington to obtain information on the bank accounts of its citizens in the Spice Isle.
The United States of America, Grenada Foreign Account Tax Compliance bill 2017 was tabled last week Thursday at a sitting of the Senate held at the Grenada Trade Centre at Morne Rouge in Grand Anse.
Leader of Government Business in the Senate, Sen. Simon Stiell stated that Grenada does not have a choice than to follow through with the FATCA Bill as presented by the Government of the United States.
This bill will allow Washington to obtain financial information on its citizens with financial accounts in Grenada and who have tax obligation to the United States.
This will be done through the Inland Revenue Department (IRD) within the Ministry of Finance and the United States’ Inland Revenue Service (IRS).
The bill allows for the two entities to monitor the financial transactions and financial movements of U.S citizens that are taking place internationally in an effort to combat money laundering, terrorism financing among other related activities.
The action taken by the Grenada Parliament now provides the US with a much greater opportunity to look at the movement of monies around the globe.
Part of the obligation is for Grenada to ensure that persons are fulfilling their tax obligations to the US whether with funds held in local commercial banks, credit unions and other financial institutions.
Grenada will have to report on an annual basis to the IRS the accounts of those persons with tax obligations in the US.
According to Sen. Stiell, the passage of the controversial bill is not a matter of choice for Grenada or the rest of the region as there are consequences if they do not comply with the directive from Washington.
“Mr. President, we have no choice but to comply with (it). It is a reality of this global community, this global financial operations that Grenada is part of and it is important for us to comply not only at a regional level, at a national level but also at an institutional level”, he said.
“The consequences of non-compliance, if Grenada was to refuse to comply with this, if St Lucia was, if Dominica was, if financial institutions within our jurisdictions were unwilling to comply, then Grenada would be blacklisted”, he added.
Sen. Stiell warned that if Grenada failed to adhere to this dictate of the United States then it could have a serious effect on corresponding banking relations.
“This will have a negative effect, not just on Grenada but it will also impact us as a region. The global flows of money, international banking, the need to maintain strong financial status through correspondence banking, our ability, our relationship with international banks to be able to transfer funds in and out of the region is all dependent on Grenada, on the region as a whole, having a clean bill of health with the likes of the United States to enable this to continue,” he told the Upper House.
Private Sector representative of the Senate, Senator Chris DeAllie, was uneasy about the bill and likened it to an act of slavery.
He said that apart from the cost that will be incurred by financial institutions to act in accordance with what the US is requesting, the uneven playing field that is needed cannot be seen.
“The Leader of Government business said we have no choice in the matter, that bothers me as a sovereign state but I understand where (it) is he coming from…. when you look at the context and the threat of removing corresponding backing relations for our banks, it’s a kind of Massa situation.
“We all understand the world we live in but it is unfortunate that here we are being asked to put in this, incur additional costs to do something that resounds to the profit of the US government because they are trying to capture more taxes from people who are trying to evade their tax system and we’re helping in that at our cost.
“Then they are still threatening us on the other side to remove correspondent banking relations – something just can’t be right about that and how we negotiate as nations. You (are) supposed to be helping me to ensure that I lose no corresponding banking relations when it comes because I have to help you to get additional revenues into your coffers. We can’t have a negotiation that looks so one sided.
Sen. DeAllie noted that what Washington is requesting of small island states is more than what is actually required in the United States to handle financial business.
“When it comes to blacklist and who have to go on blacklist, it is a fact Mr. President that if you come in Grenada to open an account in any one of our financial institutions, they put you through a rigor of information. I could go to a US bank in Miami and open an account in one day with one piece of ID…”, he said.
“…I’m saying that to say what good for one is good for the other and we have to get some sort of evening of the playing field because you can’t pressure these little islands who trying to do things and get some investments and so on and on the other side, you are doing what you want”, he added.
DeAllie went on to say: “When they talk about corresponding banking relations and removing it, they say our banks and our internal systems and processes may be exposed to money laundering and AMTL and all these kind of things but when you look at their system compared to us we are far more regulated…to ensure that we are not caught napping in the event that we have some sort of illicit funds coming through our system. When you look at theirs, they are far more relaxed than ours”.
According to the private sector representative in the Senate, this kind of slavery approach by the U.S is not fair.
“…I say this to say, we are putting in FATCA, we have no real choice as the Leader of Government Business is saying but we don’t seem to have an even playing field when it comes to the financial institutions and how money moves across borders. They want all theirs in theirs, that’s fine, we want all ours too but you can’t have laws and systems put in place that tend to employ the same slave mentality of the massa big stick approach,” DeAllie said.