21 August 2014

Self Determination: The Next Phase of Mental Emancipation

A presentation by 

Carlyle G. Corbin 
International Advisor on Governance
on the occasion of 
Emancipation Week 
San Andres Island 
31 July 2014 


I wish to thank the members of the Archipelago Movement for Ethnic Native Self-Determination (AMEN-SD) for the kind invitation to join with you here in San Andres to celebrate this important event of the physical emancipation of the ancestors from the crime against humanity known as slavery. 

We shall never forget. 

As you know, emancipation is commemorated not only in San Andres, but in other parts of the Caribbean region and across the globe wherever peoples of African descent were forcibly relocated. 

Whether it was emancipation in the Caribbean from the British in 1834; the Swedish in 1847; the Danish and French in 1848; the Dutch in 1863 -- or whether it was the emancipation in Latin America in the early 1800s, the struggle for freedom was hard fought. We must pay our deep respect to the freedom fighters for their courage and dedication to the course of freedom.

The fight for emancipation of the first peoples of African descent in this hemisphere to win their freedom - the African descendants of Haiti in 1804 - should always serve as a shining beacon of light. We must also recall the courage of the Maroons - those who escaped slavery in Jamaica, St. Croix and elsewhere in the region to build distinct societies. The courage of the ancestors on the island of St. John (Virgin Islands) who leaped over steep cliffs to certain death rather than return to Danish enslavement when their encampments were discovered shall always be remembered.

We shall never forget.

On the occasion of the United Nations General Assembly Special Session commemorating the International Day of Remembrance ofthe Victims of Slavery and the Transatlantic Slave Trade in 2013, the Latin American and Caribbean Group statement delivered by Grenada Ambassador Dessima Williams was most profound, and I quote:

"Those who survived this infamous horror known as the Middle Passage were landed in ports throughout Latin America and the Caribbean into an existence of forced labour and systemic cruelty which lasted for generations. Entire economies in much of what is now known as the 'developed world' were literally built on the backs of this involuntary African labour, in large measure. May such an acknowledged crime against humanity never be repeated, in any form or manifestation, in any part of our globe."

We shall never forget.


Ladies and gentlemen, 

In my presentation today, I will focus on issues related to emancipation in our region. I will seek to examine some relevant international developments at the United Nations which I hope would shed some light on how countries around the world views the relevance of emancipation today. I will close by looking at issues of self-determination which for many of us in the non-independent Caribbean remains the logical next phase of emancipation. As was the case with physical emancipation, self-determination is a goal to be pursued, and definitely attained.

The Regional Context

I begin with the observation that amongst the descendants of enslaved Africans in the Caribbean, San Andres (Saint Andrew), Providencia (Providence), and Santa Catalina (Saint Katherine) are unique and also familiar. Unique because you have emerged into a post - emancipation period on the basis of your own specific geography and strategic positioning in the western Caribbean. And familiar because this is a condition experienced in other parts of the region as well.

What is also familiar is that, as in the case of most dependencies, there appears little evidence that there has been a formal process of self-determination. This is not uncommon in the non-independent Caribbean as many of the territories have yet to undertake such a process - certainly not the British dependencies whose constitutional orders provide for the continuation of unilateral power over them by a distant cosmopole. Certainly not for the U.S. territories such as Puerto Rico or my own U.S. Virgin Islands where there have been only inconclusive results such as the various referenda in Puerto Rico, and the singular political status exercise in the U.S. Virgin Islands several decades ago along with the more recent aborted attempt to draft a local constitution. 


The non-independent Caribbean has also witnessed the break-up of the former Netherlands Antilles in 2010 producing a model of lesser autonomy for two of the islands, and a form of partial integration for the other three. Such governance models are incomplete, and do not represent the requisite full measure of self-government on the basis of internationally recognised standards. Bonaire in the southern Caribbean, and Sint Eustatius in the northeastern part of the region, are currently in the process of considering new political status referenda in order to articulate the will of their people towards full self-government. 

Through it all, the strategic positioning of all of our territories has always been a key factor evident for much of the wider region, whether it is here in the Western Caribbean, or in the eastern, northern and southern parts of the region. This is clear from examining the centuries of conflict between assorted European powers fighting for domination, control and strategic advantage. The results of these historic rivalries have placed much of the Caribbean in peculiar political, social, economic and cultural circumstances, some 15 years into this 21st Century. 

So, it is not surprising that the stated international commitment to the self-determination and political evolution of peoples, contained in the United Nations Charter and relevant human rights conventions, has waned. Our territories are now experiencing a heightened competition for the control of the remaining resources of the world - be it fisheries, offshore gas and oil, strategic undersea minerals, and more. This geo-economic rivalry is being played out throughout the world including the dependencies. 

This is clearer in the non-independent Pacific region, probably because the resource base is far greater. French Polynesia, for example, has over 5 million square kilometres of marine resources which according to international law are supposed to belong to the people of the territory. However, the French have thus far dismissed the applicability of international law to the self-determination process of that territory in a bid to claim those resources. For some large states, international law is applied only when it is in their interest to do so. Yet, these very states are the ones which preach to the rest of the world that they must adhere to the "rule of law." 

Issues of resources are also evident in the Caribbean, as well, including the stubborn retention of empire by the British in the Malvinas Islands and the offshore oil reserves. The implications to the fisheries resources of the Western Caribbean in view of the International Court of Justice (ICOJ) decision on the maritime dispute between Columbia and Nicaragua also comes to mind in relation to the traditional fishing grounds of the Raizal fishing industry.

All of this brings to mind the perspective of the late Guyanese political historian Dr. Walter Rodney who analysed in his seminal work "How Europe Underdeveloped Africa" the strategic drawing of borders in Africa without regard for the interests of the African people. In my view, the retention of the artificial colonial borders has contributed to much of the conflict and underdevelopment on the African continent - underdevelopment which is now being exacerbated for many by the impact of climate change and the increasing unpredictability of weather patterns with significant effect on agriculture.

Perhaps had Dr. Rodney not been assassinated in his native Guyana, the title of his next book would have been "How Europe Underdeveloped the Caribbean." This would have given us important insight into the historic practice of artificial borders drawn by the European powers to meet their own interests, rather than those of the people. We continue to live with the implications of these decisions, taken by others in their own interest.

Rodney has joined the ancestors. His work challenges us to further develop those insights. The struggle continues. We will not forget.

If there is one thing that is clear in all of this, it is that the Caribbean is the most politically complex of any region in the world in such a small space. The political composition of the non-independent Caribbean is the result of centuries of European conflict for economic and strategic advantage carved up with little regard for the indigenous peoples who happened to be living there. As the late Jamaican Professor Rex Nettleford wrote, it was "a fight for land space leading to wars and rumours of wars over time starting with the newly discovered spaces." 

In the case of the enslaved Africans, entire societies in Europe - and North America - were built by the forced labour of our ancestors who had been transported through the Middle Passage via the Trans-Atlantic slave trade for the economic benefit of one European power or the next. As Nettleford wrote, this was characterised by:

"the systematic dehumanization of an horrendously exploited labour force in the production of commodities for commercial profits as well as by the psychological conditioning of millions into stations of self-contempt bolstered by an enduring racism, underlying rigid class differentiation, and ending up with the habitual violation of human rights."

The British, Spanish, Portuguese, French and Dutch were some of the most widely known perpetrators. The Danish and the Swedish were somewhat lesser known - not because their brand of enslavement was any less brutal, but perhaps because of their capacity to minimise their role in the historical record.


Denmark, for example, controlled the Danish West Indies for almost three centuries before selling the islands to the United States in 1917 - for military strategic reasons. We are now the U.S. Virgin Islands - a people, as in the case of other Caribbean dependencies - who have yet to exercise the right to self-determination. It is only through scholars like the late Jamaican professor Dr. Neville Hall that we understand the full dynamic of Danish colonialism in the Caribbean. At the same time, Sweden also practiced slavery in Saint Barthelemy (St. Barts) - not a widely known fact, as it turns out.But large or small, they all benefited from their role in the "crime against humanity" known as slavery.

For the Caribbean, we must always recall that emancipation ushered in the era of colonialism which, in many respects, merely perpetuated a refined form of what had formerly prevailed under slavery. Thus, the anti-colonial struggle was born as a logical outgrowth of the emancipation struggle. Many of the Caribbean countries succeeded by attaining independence or other acceptable forms of self-government. For the rest of us, our political evolution remains very much a work in progress. In this year - 2014 - we should never forget that full emancipation did not come with the abolition of slavery.

Thus, self-determination is the next phase of emancipation, and the result of that process can take several forms - as long as those forms provide for political equality in conformity with international law. To achieve this, we must continually remind the international community of its international legal commitment to complete the unfinished business of the self-determination of peoples, including indigenous peoples.

But even among those Caribbean countries which progressed politically to independence, the after-effects of slavery remain evident, and have impeded sustainable human development. Many of the newly independent countries were born without sufficient preparation, and had insufficient economic strength at the outset since their economies had been ravaged during the colonial periods. This is not surprising since their economies were based on a colonial model to produce for export to the colonial power - not to produce for the well being of the people in the territory itself. This is the legacy of slavery, and the adjustments are still being made in many independent Caribbean countries. 

On this point, the Caribbean Community (CARICOM) has begun an initiative to bring justice to compensate for the legacy of the crime of slavery. This initiative is focused upon those European states which practiced this crime against humanity in our region. This leads to the next part of this presentation: the international context.

The International Context

The fourteen independent countries of CARICOM have historically been at the forefront of international initiatives to bring to light the brutality of the slave trade, the plight of the enslaved, and the challenges faced by the survivors. The CARICOM role in the UNESCO Slave Route Project since as far back as 1994 is a tribute to a sober recognition of the past to ensure that our history can no longer be suppressed. 

The seminal United Nations Conference against Racism, Racial Discrimination, Xenophobia andRelated Intolerance which convened in South Africa in 2001 also witnessed a continued commitment by the Caribbean, in collaboration with Africa, in negotiating the landmark Durban Declaration and Programme of Action. This document remains the guiding principle to redress the human rights violations experienced by our forefathers under slavery, and the stubborn legacy of slavery which remains a significant impediment to the human and sustainable development process in our region requiring effective remedies, reparations and compensation.

Since 2001, CARICOM has accelerated its work in this area through the promotion of a series of activities at the United Nations. One initiative is the "Permanent Memorial to honour victims of slavery and transatlantic slave trade" to be erected at U.N. headquarters in New York. The theme of the memorial is:

"Acknowledging the Tragedy; Considering the Legacy" 

Lest We Forget."

In 2007, the United Nations General Assembly adopted a CARICOM-sponsored resolution designating March 25th each year as the International Day of Remembrance of the Victims of Slavery and the Transatlantic Slave Trade. As a result, a wide range of artistic, musical and historical programmes are conducted each year to draw attention to the “causes, consequences and lessons of the transatlantic slave trade, and to communicate the dangers of racism and prejudice.” 

CARICOM was also instrumental in the declaration by the U.N. of the year 2011 as the International Year of Peoples of African Descent aimed at strengthening national action, and regional and international cooperation for the benefit of peoples of African descent. These activities represent recent and sustained cooperation between Caribbean and African countries at the United Nations, linking Africans on the continent with its diaspora in a very meaningful way.

The International Year for Peoples of African Descent was followed by the adoption by the Proclamation of the International Decade for People of African Descent at the end of last year under the theme of “People of African descent: recognition, justice and development.” A draft programme of activities was adopted in Geneva by the Intergovernmental Working Group on the Effective Implementation of the Durban Declaration and Programme of Action with input from the Working Group of Peoples of African Descent of the U.N. Human Rights Council. The programme of action is presently the subject of intense consultations at U.N. headquarters in New York where press reports indicate, not surprisingly, a reluctance of the European countries to include reference to the issue of reparations.

Reparatory Justice

To this end, one of the key elements of the agreed theme of the decade is that of "Reparatory Justice". Following decades of hard work by non-governmental organisations including pan-African organisations and in particular the Rastafarian movement, Caribbean governments have become progressively convinced that reparatory justice is necessary for the European countries to atone for the crime of slavery. CARICOM countries have increasingly begun to raise the issue in their official statements to the United Nations. In 2009, for example, the CARICOM statement to the U.N. Third Committee on the agenda item of racial discrimination observed the following:

"We know all too well that when history is forgotten, it is bound to be repeated. Absent clear expressions of remorse for this historic crime against humanity, and the appropriate reparative measures, the international mandate for the promotion of human rights and fundamental freedoms can never meet the threshold of credibility."

The increasing references to reparations by CARICOM heads of government in their official U.N. statements led by the Prime Minister Ralph Gonsalves of St. Vincent and the Grenadines, and his colleague CARICOM leaders have generated increased momentum. The (former) Antigua and Barbuda Prime Minister in his statement to the U.N. General Assembly in 2011 called upon the former slaveholding countries:

"to begin the reconciliation process by issuing formal apologies for the crimes committed by the nations or their citizens over the 400 years of the African slave trade, and to back up their apologies with new commitments to the economic development of the nations that have suffered from this human tragedy."

It is anticipated that the CARICOM leaders will intensify their focus on reparatory justice at the upcoming session of the U.N. Assembly beginning this September in urging the European states to engage in a conversation on remedies. There is also scope for the issue of reparatory justice for the slavery as a human rights violation to be addressed within the mandate of the Special Rapporteur on Truth, Justice,Reparation and guarantees of non-recurrence mandated by the Human Rights Council. Other initiatives should also be recognised:

* There is the call by Ban Sampras Pas for reparations from the Netherlands for over 229 years of slavery, and their recognition of the slave revolt in Curacao led by Tula in 1795. A statute of this freedom fighter has been erected in Curacao, and a museum bearing his name exists in the Netherlands.

* There is the demand for compensation made by the Suriname Reparations Committee on past Slavery made to the Dutch Embassy in Paramaribo on the basis of Euro 250 million in profits made on the slave trade.

* There is the establishment of a memorandum of understanding between the African Caribbean Reparations and Resettlement Alliance of St. Croix and the Danish Institute for Human Rights to develop initiatives in education, restoration and reconciliation, historical and other research projects, conferences, lecture series, cultural and other exchanges.

These are but a few of the initiatives for reparatory justice undertaken by civil society throughout the region, and their input into the CARICOM initiative on reparatory justice is especially useful. Reparations, therefore, is not regarded as merely a one-time payment to individuals who are the descendants of enslaved Africans. It is a far more comprehensive approach to the development of societies which had been ravaged by the practice of slavery. 

An interesting parallel between your islands and mine (U.S. Virgin Islands) is that the countries which enslaved our ancestors - the United Kingdom and Denmark - are not the ones with which we maintain a political relationship today. Therefore, in our cases, reparative justice is the responsibility of Britain and Denmark, respectively, whilst the elaboration of further political and constitutional evolution would be the result of the appropriate engagement with Colombia and the United States. Such are the complications of our respective political arrangements specific to our respective island territories.

Recent initiatives for reparatory justice are being further accelerated by Caribbean governments. By decision of 2013, the CARICOM Heads of Government agreed to establish national reparations committees in each CARICOM country, and a region-wide CARICOM Reparations Commission has been formed under the directorship of the eminent Barbadian scholar Sir Hiliary Beckles. CARICOM Heads of government have subsequently adopted the Caribbean Reparatory Justice Programme which includes the following ten points:

* Full Formal apology
* Repatriation
* Indigenous Peoples Development Programme
* Cultural Institutions
* Public Health Crisis
* Illiteracy Education
* African Knowledge Programme
* Psychological Rehabilitation
* Technology Transfer
* Debt Cancellation

In the words of  Nettleford:

"There is arguably a main point of the reparations advocacy - by no means seeking a hand-out of 500 pounds sterling per person to descendants of the oppressed but rather positing serious investment by countries, which have been enriched by the heinous crime of the Slave Trade and Slavery, in the human resource development of countries that suffered, preferably through the education and preparation of their young to enable them to cope with the inheritance of a continuing unjust world."

The Antiguan diplomat and scholar Sir Ron Sanders wrote that:

"In 1838, British slave owners in the English-Speaking Caribbean received £11.6 (US$17.8) billion in today’s value as compensation for the emancipation of their “property” – 655,780 human beings of African descent that they had enslaved, brutalised and exploited. The freed slaves, by comparison, received nothing in recompense for their dehumanisation, their cruel treatment, the abuse of their labour and the plain injustice of their enslavement. The benefits of those monies still exist in Britain today. For example, they are the foundations of Barclays Bank, Lloyds Bank and the Royal Bank of Scotland. But they are also the basis of wealth for many leading British and Scottish families..."

Let there be no doubt of the historical record, and the tremendous financial benefit which built fortunes of others off of centuries of free and involuntary labour. As the late African American writer Amiri Baraka wrote:

"Its time to be paid." 

This leads me to the final part of this presentation - Self-Determination as the final stage of emancipation. 


The pattern of post-emancipation colonialism in various parts of the Caribbean lasted over a century until the first former-British colonies won their independence in the 1960s through 1980s. These countries joined Haiti, the Dominican Republic, Cuba and (later) Suriname as independent states in the Caribbean. But as I noted earlier, six British dependencies still remain (Bermuda, Turks and Caicos Islands, Cayman Islands, Montserrat, British Virgin Islands and Anguilla), along with the two U.S. territories of Puerto Rico and the US Virgin Islands. There are also several Dutch autonomous territories (Aruba, Curacao and Sint Maarten) and several French and Dutch partially, or fully integrated jurisdictions (Martinique, Guadeloupe, French Guiana / Bonaire, Saba, Statia).

What is clear is that the process of political and constitutional evolution in the Caribbean has not ended as some amazingly argue. Rather, this process has taken on a new 21st century dimension - what the Bermudian writer and political leader Walton Brown refers to as "new millennium colonialism." Thus, for many of us, we have gone from the middle passage - to slavery - to physical (but not mental) emancipation - to varying degrees of dependency status. CARICOM in its 2009 statement on racial discrimination to the United Nations Third Committee made the important observation:

"We...recognise the continuation of contemporary colonialism which continues to be stubbornly practiced in many countries of our region where the inalienable right to self-determination is continually pursued by the people, but not yet attained."

To attain the full self-government which would be the logical conclusion of a genuine process of self-determination - and an inalienable right - the United Nations General Assembly has identified the three options of independence, free association or integration as the alternatives. What is important to emphasise is that dependency governance was not meant to last indefinitely, but rather was designed to prepare the territories for full self-government. This is the mandate of Article 73(b) of the U.N. Charter. This is best done through the systematic devolution of power to democratically elected governments and a serious dialogue on the political future of these entities. 

To determine the best option, a comprehensive assessment of the existing political relationship on the basis of self-governance indicators has proven useful for a number of Caribbean and Pacific territories. These assessments identify the democratic deficiencies in the existing arrangements on the basis of international standards of democratic self-government. From these assessments, determination can be made on the way forward, and negotiations can begin from a position of awareness to advocate for future political modernisation.

In the cases where the territory is listed as non self-governing by the United Nations, the process should proceed under formal and recognised international review - although over the last 15 years or so the U.N. focus on these issues has stalled, and must move from the position of passivity to one of proactivity, consistent with the longstanding international mandate. For those territories not on the U.N. list, a U.N. role would be more complex and other steps would have to be taken. In this context, I am aware of the Raizal petitions to the Human Rights Council in Geneva, the special status recommended by the Special Rapporteur in 2003 and the ongoing discussions surrounding a Raizal Statute.

Left to right:  Jairo Rodriguez Davis of AMEN-SD and Corbin pay courtesy call on Raizal eminent scholar
Juvencio Gallardo during 2014 Emancipation commemoration activities in San Andres.  

But whatever determination is made by the people, the process of political modernisation should move forward. We owe this to those freedom fighters who struggled for our physical emancipation against heavy odds. This week in celebration of emancipation is dedicated to their memory. Their efforts brought our physical emancipation, and a step closer to mental emancipation. The natural outcome of this will be our self-determination. 

This is our responsibility - and is a debt we owe to our future generations - to take these next steps. Robert Nesta Marley left us with the clear message to "emancipate ourselves from mental slavery - (for) none but ourselves can free our minds." 

With mental emancipation, all things are possible.

Again, I wish to thank you for your kind invitation to share this time with you on this most important celebration of emancipation.

19 August 2014

Former U.S. Ambassador and Virgin Islander joins the ancestors

Territory Mourns Death of 

Terence A. Todman

18 August 2014

Caribbean, Latin American experts discuss post-emancipation period and the future evolution of the Raizal people of San Andres

Panelists from Columbia, Nicaragua, Panama and the Virgin Islands joined with Raizal scholars during a day-long conference in commemoration of the 2014 Emancipation Day ceremonies. 

Panamanian activist Ricardo Richards

Raizal youth activist Edmiston (Eddie) Williams 

International Governance Expert Carlyle Corbin
Panelists respond to questions from audience

International Linguistic Expert Guillermo McLean

14 August 2014

UK corruption in Cayman Islands while it preaches adherence to 'rule of law'

GEORGE TOWN, Cayman Islands - In a decision that has been described by local media as part of an “ongoing cover up”, the Royal Cayman Islands Police Service (RCIPS) has concluded that allegations that a former Cayman Islands governor, the attorney general and a British Foreign and Commonwealth Office (FCO) adviser lied to investigators about their level of involvement in an ill-fated corruption investigation are unfounded.

However, the conclusion apparently reached by the RCIPS in response to a criminal complaint againstformer governor, Stuart Jack; attorney general Samuel Bulgin; and FCO advisor Larry Covington by former Scotland Yard detective Martin Bridger flies in the face of an earlier contrary view reached by London’s Metropolitan Police and a statement by former Cayman Islands police commissioner Stuart Kernohan.
In a complaint dated March 4, 2013, headed “Allegation of Crime”, a redacted copy of which has been seen by Caribbean News Now, Bridger said he wished to make criminal allegations, which he asked the Metropolitan Police to investigate.
The crime involved events that took place in the Cayman Islands between September 2007 and May 2009, he said.
According to the complaint, “The allegation of crime is against [redacted] and possibly FCO officials in the UK.”

11 August 2014

Cooperation Agreement between Curacao and Republic of Colombia

Asjes in Colombia
WILLEMSTAD – During his stay in Bogota, the Prime Minister of Curaçao, Ivar Asjes had a meeting with the Colombian Minister of Foreign Affairs, Mrs. Maria Angela Holguin Cuellar. According to the Prime Minister, this meeting was very positive for both countries. At the end of the meeting the Prime Minister and the Colombian Minister of Foreign Affairs signed a memorandum of understanding (MoU) to open the doors to continue promoting, strengthening and intensifying the bilateral ties and cooperation between Curaçao and Colombia. The areas of cooperation indicated in the MoU are: agricultural products and services, fishery, customs, culture and education, tourism, infrastructure, transport and urbanization, health and energy.
Premier Asjes is very satisfied that the Curaçao government was able to sign this important agreement after both Curaçao and Colombia has been working on it for some time now. “As it is known, Curaçao and Colombia have historical ties, solidarity and friendship. Seeing that Colombia went through an economic boom these last years, this MoU represent a concrete opportunity to realize more cooperation between Curaçao and Colombia,” the Prime Minister said.
Asjes in Colombia
To achieve more cooperation on the areas discussed in the MoU, the governments of Curaçao and Colombia will install working groups, which will jointly prepare a plan and indicate action steps to execute these plans. Prime Minister Asjes is convinced that this cooperation agreement will benefit both the people of Curaçao and from Colombia.

08 August 2014

Virgin Islands Premier announces tax agreement with U.S.


Tuesday July 22, 2014

Madam Speaker it is now appropriate to address the Foreign Account Tax Compliance Act (or FATCA) pursuant to the British Virgin Islands having formally signed an intergovernmental agreement with the United States on the 30th of June 2014.

Madam Speaker, FATCA was enacted by the Government of the United States in 2010 as part of a process to ensure that US persons around the world fulfill their obligation to the US by reporting on, and remitting taxes where necessary on their worldwide earnings. Indeed all major countries including Europe Asia, Australia, as well as smaller ones such as the Channel Islands, Bermuda, and Cayman have signed this agreement.

FATCA places an obligation on Foreign Financial Institutions to report on the particulars of accounts owned by US Persons (including green card holders and US Companies) to the US Internal Revenue Service. Madam Speaker I must make it abundantly clear that FATCA does not place any additional obligation whatsoever on the US person or entity with respect to what they were obligated to do by virtue of their status as a US person.

There are currently many BVIslanders who purely by birth, who may have been unaware of their obligations as US citizens. Last year we began a public information programme on the impact of FATCA on such persons and what they must do in fulfilment of their obligations to the United States. In the coming days we will reinforce these messages and announce the measures that we are taking to assist BV Islanders who are also 'accidental' Americans as we often refer to them in coming up to speed on their commitments to the Internal Revenue Service. These measures Madam Speaker will include a help desk at the Government Administration Building.

Madam Speaker, so what exactly is the Foreign Account Tax Compliance Act.
On 18 March of 2010 the United States enacted Hiring Incentives to Restore Employment (or HIRE) Act, as an incentive to employers to hire previously unemployed persons by giving them payroll tax exemptions. Enacted by President Obama’s administration, the HIRE Act was designed to increase the level of employment in the United States and to combat money laundering and drug trafficking.

Madam Speaker, as part of this Act there were two components to it aimed at improving tax compliance of US persons holding assets overseas these are FBAR (report on Foreign Bank Accounts) and FATCA. The first of these to Foreign Bank and Financial Accounts requires a US citizen or green card holder to report if:

1. He or she is a United States “person” (which can include residents in the United States on a visa);
2. He or she had a “financial interest” in, or “signatory authority” over any “financial account” in a foreign county or jurisdiction; and
3. The total of all such foreign accounts exceeded $10,000 at any time in a given year.

The second of these components; FATCA, requires that:
• U.S. taxpayers report on certain foreign financial accounts and offshore assets
• foreign financial institutions report on financial accounts held by U.S. taxpayers or foreign entities to report instances in which U.S. taxpayers hold a substantial ownership interest
• The objective of FATCA is the reporting of foreign financial assets; withholding tax is the cost of not reporting.

Madam Speaker, in no instance does the HIRE Act and specifically FATCA require a foreign Government to report on the financial accounts of US persons within its borders, but it does require foreign institutions to do so. In the event that a foreign institution does not report on the accounts of US persons, a thirty percent (30%) withholding tax would be applied to the foreign institution whenever the US was able to apply such to the institution.

In order to avoid violation of domestic law in countries around the world, but reporting on accounts held domestically or to increase the comfort level of foreign institutions when reporting to the US authorities, the idea of the Intergovernmental Agreement was born. This agreement essentially allows the Government of the respective country to act as a facilitator, acting as an intermediary between the financial institution and the US Government. This arrangement in desirable to institutions since it requires them to report through the same channels with they are accustomed to reporting, and the information in relation to FATCA is merely passed on to the US Government.

The countries around the world as a matter of course have taken this route in order to reduce the effects of the requirements of FATCA.

Madam Speaker the Government of the Virgin Islands has signed a Model 1B intergovernmental agreement, which provides for information on US Accounts held in the BVI to be sent to the US. A copy of this agreement and it annexes are posted on the website of the Ministry of Finance.

Madam Speaker the IGA itself outlines.
1. the type of information that will be transmitted,
2. the time and manner in which the information will be transferred
3. the rules surrounding how the institutions in the BVI will be required to transfer the information and those of which will not have to transfer information,
4. rules regarding the confidentiality of the information and
5. how the BVI and the US will communicate on administrative procedures and enforcement.

Attached to this Madam Speaker are two Annexes.

Annex I speaks to the due diligence obligations for identifying and reporting on the requisite accounts to the US authorities and Annex II identifies the entities in the BVI that will be exempt from reporting. For example Madam Speaker, government institutions, international organizations, retirement funds and low value accounts (accounts less than 50,000.00) will be exempt from reporting under FATCA.

Madam Speaker, at the risk of repeating myself, FATCA does not put any new obligations on BVIslanders who in having dual nationality also have to report to the United States Tax Authorities. These obligations have always existed as part of the obligations of being a US person. However the BVI Government will, assist persons who consider themselves to need this support in meeting their reporting requirements to the US by providing useful advice and identifying professionals versed in US Tax matters to assist.

Madam Speaker, the Government of the Virgin Islands has not sold out its citizens as some would deliberately mislead you into believing, but instead has, by signing an Intergovernmental Agreement with the United States, improved the ability of financial institutions and relevant US citizens in the BVI to comply with this requirement.

Finally Madam Speaker I think that it is important that the implications of FATCA are understood by all in order that any uncertainties may be dispelled. Pursuant to this we have drafted a set of Guidance notes that will be used to clarify in great detail the various provisions of the FATCA IGA. During this week the Government of the Virgin Islands is hosting workshops to examine these documents with a view to finalizing them by the end of this month. In addition to this we will also be speaking to the public again in order that any remaining questions can be answered and the apparent mysteries surrounding FATCA dispelled. These discussions will be done through various media, including television and radio.