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‘HIGHER DISCUSSION ABSENT FROM FATCA DEBATE’

Published: 
Wednesday, February 15, 2017

In 1998 the controversy in the Caribbean surrounded the ship rider agreement between nation states of the Caribbean and the United States of America. US President, Bill Clinton pushed an agreement on Caribbean nations giving the US the right to pursue suspected drug traffickers into its territorial waters thereby infringing on their national sovereignty.

During a visit to T&T the Prime Minister of Barbados Owen Arthur succinctly and poignantly stated this was a “dangerous doctrine that has no place in the Caribbean.” He said, “Sovereignty is not divisible. For us it was won after a long struggle by those who believe that ‘massa day done’… There are those who have argued that sovereignty does not matter, that we are incapable of providing for our own defences against the advances of the drug barons, and that we should surrender our defences on this sphere to the tender mercies of those more capable than ourselves to provide our defence… This was the very doctrine—the Brezhnev Doctrine—that led to the subjugation of Eastern Europe to domination on the grounds that they could not provide for their own defence.”

This was the challenge of the Caribbean and while we eventually signed the ship rider agreement we did so after stating the principles of our opposition to it. Having said this, the ship rider agreement has made a significant impact in the fight against drugs in the region. Suggesting to some that national sovereignty cannot be absolutely defined or delineated in the new world order and amongst the family of nations.

With the exception of the contribution of Prof Hamid Ghany this lofty philosophical debate, however, escapes us in the present context of the President Obama-inspired Foreign Account Tax Compliance Agreement (FATCA). All that we are being fed is that if T&T does not implement this law it will have dire economic repercussions for all concerned. The politics of economics and the fear of food has been mobilised in an attempt to impose this latest US-driven law in the Caribbean and indeed the world. Absent from this debate is a higher discussion.

The US believes that there is a significant amount of its citizens all over the world who are earning income and simply hiding it from their Internal Revenue Services (IRS), and as a result the US has to force foreign nations to become de facto agents of its IRS for free. There does not appear to be any reciprocal arrangement in place for foreign nations to find out if their nationals are hiding income in the US.

In a few countries such as Canada, China, Russia and Israel where the FATCA law has been challenged in the courts the issue of national sovereignty has been raised and discussed. FATCA, essentially a tax enforcement law, is an unprecedented incursion and extraterritorial expansion into another country by the USA. Article 2 of the United Nations Charter states, “the principle of sovereign equality” is fundamental to mutual respect between states. In essence FATCA would remove that.

FATCA appears to violate the unwritten principle of our Constitution that we will not forfeit our sovereignty to a foreign government.

We are T&T citizens; the United States of America has no rights over our nationals and we expect our Government to vigorously protect our rights. We are, however, unfortunately a small nation unable to withstand the economic sanctions of the US, so we comply. We are not alone as the mightiest of nations have also complied, fearing economic sanctions. The world has submitted to US law because the world is vulnerable to the US economy.

This time we don’t have the eloquence of Owen Arthur.