The relevance and state of US-Caribbean relations — Part 3

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This is the final of a three-part commentary discussing the relevance and state of US-Caribbean relations against the backdrop of a publication by the Washington-based Centre for Strategic and International Studies (CSIS), entitled ‘The relevance of US-Caribbean relations — Three views’.

CSIS deserves the Caribbean’s thanks for addressing the issue which has been ignored for decades by US agencies, except in the context of their preoccupation with drug trafficking and refugees.

The withdrawal of correspondent banking relations was identified by the CSIS publication as a serious issue in US-Caribbean relations. It is not the only one in the financial services sector. The imposition by the US of its laws on other countries has long been a problem. The US, under President Barack Obama, continued this practice by requiring jurisdictions around the world to become policemen for the US Internal Revenue Service (IRS) under the Foreign Account Tax Compliance Act (FATCA). This requirement is particularly burdensome for small Caribbean jurisdictions which have to bear all the associated costs of reporting to the IRS on the assets of any US companies or individuals. Their failure to do so would result in “substantial financial sanctions” — a description by two senior members of the US Congress — Senator Rand Paul, and Representative Mark Meadows.

The two congressmen want FATCA repealed. They also state categorically that the inter-governmental agreements (IGAs) that the Obama Administration compelled many jurisdictions to sign, so as to give effect to FATCA, are illegal in the US. Truth be told, the IGAs are probably unconstitutional in every Caribbean jurisdiction, but no Government resisted it because they are well aware that they would be blacklisted as non-cooperative.

Paul and Meadows have taken up this issue with the…

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