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Barbados - 'Tax Havens,' Critics Seek Common Ground
by Angus MacSwan
January 7, 2001 - (Reuters)

     BRIDGETOWN, Barbados - The fight against international money-laundering and tax evasion will be rejoined in Barbados from Monday when officials from ``tax havens'' and their critics in the world's wealthiest countries debate the vexing issue of offshore financial centers.
     The United States, Britain and other countries grouped in the Organization for Economic Cooperation and Development (OECD) want the tax havens to agree to a timetable for cooperation and committing themselves to easing their bank secrecy laws.
     They say the financial services industry, which has mushroomed in recent years in small nations and territories in the Caribbean and elsewhere, are awash in dirty money from the drugs trade, tax cheats, fraudsters and other crooks.
     Last June they issued a blacklist of 35 ``tax havens'' and threatened punitive action if signs of cooperation were not forthcoming.
     But their campaign has enraged many of the targeted nations and territories, who accuse the powerful nations of bullying them and infringing their sovereignty.
     The Caribbean Development Bank's president, Sir Neville Nicholls, has called the OECD campaign a ``bad joke'' that could destroy small, vulnerable economies.
     Tempers have cooled since the OECD issued modified proposals in November, and the watchword at the meeting in Barbados, which is on the blacklist, is cooperation not confrontation.
     United Search For Solutions
     ``If it is perceived that money-laundering can be a problem, we do not want it. And if the OECD is confident that it is a real issue, then we expect them to work together with us to solve it,'' said Grenada's prime minister, Keith Mitchell.
     ``But it must not be a big hammer coming down on our heads. We must sit down together and look at the problems,'' he added.
     What the United States and its allies are gunning for are the bank secrecy law that have made otherwise exotic but relatively obscure place such as Antigua or St. Kitts favorite places to stash cash. U.S. estimates put the amount of money in offshore accounts in excess of $5 trillion.
     The Russian mafia, Colombian drug barons and others have used the small countries' ask-no-questions policy to launder and hide their ill-gotten gains, often through shell corporations or ``brass plate'' companies that proliferate in some countries on the blacklist.
     ``There's a lot of nasty money down there,'' said Charles Intriago, publisher of the Miami-based Money Laundering Alert newsletter.
     But there are also billions and billions of dollars handled by legitimate corporations passing through, with international lawyers and investors taking advantage of the tax and secrecy laws to maximize their gains through International Business Companies (IBCs), International Trusts and a myriad of other devices.
     Speaking in Paris Friday, OECD Secretary General Seiichi Kondo said the big powers were not targeting the jurisdictions.
     ``We are combating tax evaders, tax abusers ... honest tax payers suffer from tax evasion.''
     A source close to the talks told Reuters the OECD was willing to let offshore centers set their own tax rates but that they wanted greater transparency and cooperation with investigations into suspect money.
     'Piece Of The Action'
     The other view, from one Miami-based financier, was, ``The United States, Britain and the others just want a piece of the action.''
     The U.S. government says one problem is that tax evasion has in the past been viewed as a harmless practice, merely taking advantage of loopholes. That notion has created a ``swamp in which financial criminals breed,'' the State Department has said.
     The Paris-based OECD considers a country a tax haven if it has nominal or no taxes and which offers itself as a place where foreigners can avoid awkward questions or risk information on their investments being disclosed.
     In November, the OECD offered the listed tax havens a quick route to escape the blacklist. It said it would remove the threat of sanctions from havens that sign a collective pledge of commitment to transparency and cooperation.
     They will have until the end of 2001 to set out detailed timetables for dismantling ``most harmful'' measures. By the end of 2003 they would have to cooperate fully with tax authorities in other countries investigating tax crimes and by the end of 2005 provide ``effective exchange of information on all tax matters.
     The havens say they are willing to assist in criminal investigations but not otherwise. They also say they held to tougher rules than some OECD members, notably Switzerland.
     Barbados Prime Minister Owen Arthur, who has been a standard bearer for the small nations, said in London in November that he thought an agreement could be reached. But the island's leading newspaper, the Daily Nation, reminded him the stakes are high.
     ``Our offshore financial sector is under very serious threat and a national effort must be mobilized in support of Prime Minister Arthur and his team when they sit down Monday and Tuesday to literally fight for this country's survival against the unprincipled onslaught being levied by the powerful and economically stronger countries which make up the OECD club'' it said in an editorial.''

Dos Hermanos bridge to be completed this year/Bridge project to cost $51.6M
   The Secretary of the Department of Transportation and Public Works, Rubén Hernández Gregorat inspected today the emblematic Dos Hermanos Bridge, a $51.6 million project at the entrance to Old San Juan.
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BBC Caribbean News in Brief
   This news and current affairs programme brings decision makers, analysts and the general public into discussions on the news events of the day.
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Press corps protest police intervention at UPRPolice create an inner cordon to arrest student protester, and an outer cordon that prevents the press from reporting close-by accounts and photographs.
  The Puerto Rico Journalist Association (ASPPRO for its Spanish acronym) and the Puerto Rico Photojournalists Association released a joint communiqué denouncing Police interference in the news coverage of the events taking place at the University of Puerto Rico.
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Hair pulling will show if legislators take drugs/All but five reps gave up a strand to prove they’re clean
   Nearly all members of the House of Representatives gave up a sample of their hair Monday for a surprising drug test.
  If any lawmaker gets a positive result, he or she could be subjected to sanctions that include possible expulsion from the Lower Chamber. Results of the test are expected within days, but an exact day was not mentioned.
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New $750,000 shelter has with no provisions for upkeep/With 15 deaths annually, funds could be used for other ends
   The legislature wants to add a new shelter for victims of domestic violence in Aguada although there is no money to maintain the current facilities.
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Deep discounts for cars bought by Guard/PRNG overseas for half year will get 75-percent off
   Puerto Rican servicemen deployed overseas for more than 180 days will receive a 75 percent tax reduction when they buy a new car, it was announced Tuesday.
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Tourism Company to revitalize Condado
   A series of improvements, including safety, decoration and information services, has been proposed for the Condado, a first-class tourism destination that has condo hotels, several remodeled and new hotels under construction, restaurants, and squares, said Puerto Rico Tourism Company Executive Director Mario González Lafuente.
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A glimpse at Christmas past
   Christmas has always been a time of great significance for most western people. Aside from its religious motives, Christmas is a time for sharing our fortunes, however little they might be, with family and friends.
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Possible new regulation for youth drivers licenses
   The implementation of a measure that will allow youngsters to drive cars along island roads was cleared Wednesday.
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Students joined by professors as strike continues
   A standoff between University of Puerto Rico students and members of the police Tactical Operations Division (riot squad) marked the second day of the strike that has practically paralyzed all academic and administrative activities in the Río Piedras campus.
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IVU-LOTO a win-win for consumers and business/Ponce launches pilot program to boost sales tax collection
   A pilot program to increase the income from the general sales tax, encouraging businesses to report their sales, was launched Tuesday in Ponce.
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Students have ideas, but board doesn’t want to hear them - President, chancellor not around for meet on fee
   Members of the Student Representation Committee from the University of Puerto Rico were stood up by Board of Trustees president Ygrí Rivera who refused to meet with them to discuss any alternative to the special Fiscal Stabilization fee...
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Big drug arrest on Caribbean cruise ship
   SAN JUAN, Puerto Rico (AP) -- A suburban body shop owner accused of helping to run one of the largest drug smuggling organizations in the Caribbean was arrested Monday as he took a family vacation on a cruise ship.
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UPR students deliver referendum results
   Official referendum results were delivered to the office of University of Puerto Rico president José de la Torre.
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Archeologist denounces government’s alleged hidden agenda
   Archeologist Francisco Freytes, of the Archeological Caribbean Educational Foundation, denounced that the government is getting rid of what’s left of former sugar cane centrals.
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United Way volunteers continue Thanksgiving tradition - Fondita de Jesús participants savor turkey dinner
   For the past 13 years, participants of the Fondita de Jesús have been regaled by a fantastic turkey dinner with all the trimmings plus gifts of personal hygiene products.
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Puerto Rico basking in Hollywood spotlight
   SAN JUAN, Puerto Rico (AP) -- The tropical U.S. territory of Puerto Rico is increasingly a backdrop in American and European cinema, standing in for Baghdad war zones, Brazilian slums, or cookie-cutter American suburbs.
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Legislature tables airing of key bills - Legislature tables airing of key bills
   The plan to reorganize the advocacy offices will not be approved this legislative session because of discrepancies between the House and Senate.
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Populares turn the tables on Gov. Fortuño
   The Popular Democratic Party announced Tuesday the creation of a commission to look for possible civil rights infractions committed by the government.
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Electoral reform postponed until new year - House wants to scrap all public funding
   The fate of the electoral reform will have to wait until next year because the House of Representatives refuses to act on the matter.
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