By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

THE European Union’s (EU) Bahamas representative yesterday asserted that the 27-nation bloc “has never imposed any sanctions or unfair practices” on this nation and other Caribbean states amid criticism of its regulatory initiatives targeted at international financial centers.

Dr Erja Askola, EU ambassador to Jamaica, Belize and The Bahamas, responded directly to complaints by Senator Barry Griffin, executive chairman of the Bahamas Trade Commission, that initiatives such as ‘substance reporting’ and the subsequent ‘blacklisting’ of this nation and others for purported non-compliance was anti-competitive and designed to drive rivals out of the financial services business.

Speaking on a panel during Diplomat Week, Mr Griffin highlighted the negative impact that regulatory and trade restrictions - particularly in financial services - have on small nations such as The Bahamas. He argued that while these restrictions are often framed as efforts to address compliance gaps, they actually expose deep structural inequities in global governance. 

Mr Griffin said that while small countries may struggle to fight back through traditional means, they are not powerless, and he called for a shift in mindset, urging nations such as The Bahamas to think and act collectively, especially through regional bodies such as CARICOM. By uniting as a bloc, he said small states can more effectively advocate for fairer treatment on the international stage.

During the question and answer segment, Dr Askola, said the EU has never imposed any “unfair practices” on its Caribbean partners. She stressed that the bloc operates under a rules-based trade framework while its approach to tax governance is rooted in the need to protect the integrity of its welfare systems.

Dr Askola explained that high levels of taxation across EU member states are essential to sustain their extensive public services, including free education, healthcare and social protection. Given this, she said it is critical that EU governments take steps to ensure that tax revenues are not eroded by individuals or corporations shifting profits to low-tax jurisdictions.

She maintained the EU’s tax governance mechanisms, including rules around anti-money laundering, tax evasion and avoidance, are applied equally to all jurisdictions, without targeting any specific countries or regions.

“I just wanted to react on your point on EU sanctions, EU unfair practices, because I want to clarify that the European Union has never imposed any sanctions or unfair practices on any of the Caribbean partners. We have an Economic Partnership Agreement which is a reciprocal, but asymmetric, free trade agreement, and we are fully complying with that agreement,” said Dr Askola

“The European Union and its 27 member states have very high standards for welfare states. It means that we have a very high taxation in most of the countries, because we offer free education, free health care, free public services that are actually quite rare elsewhere, and we also offer a very high standard of social protection. 

“So that means that we have high taxation and the kind of rules that you refer to, on anti-money laundering or tax evasion and tax avoidance. [They] are there to make sure that these high standards that we have are not evaded or avoided by transferring funds to tax havens or to countries which do not require, for instance, commercial presence or physical presence in the country.”

Dr Askola maintained that the EU’s tax rules are applied in a non-discriminatory manner, countering the suggestion that small or developing nations are being unfairly targeted. She emphasized that the regulatory frameworks developed by the EU are designed to ensure consistency and fairness across all partner jurisdictions, regardless of size or economic standing.

She also highlighted the EU’s commitment to working collaboratively with smaller countries, including those in the Caribbean, to help them meet international compliance standards. 

“It’s not that these rules would be targeting any certain kind of countries, or any certain group of countries. It is they are applied in a non-discriminatory way to all our partners, and with The Bahamas and with many Caribbean partners, what we have done is that we have supported these countries to achieve compliance, and I have been very pleased to see that before I started my term one year ago The Bahamas was delisted, and it is no longer in any in either of those lists - anti-money laundering or non co-operative tax jurisdiction,” said Dr Askola

She also highlighted The Bahamas’ removal from key EU watchlists as an example of successful collaboration, and a demonstration of the country’s progress in meeting international standards. Dr Askola framed these regulatory processes as constructive tools, intended not to penalise but to promote improved governance and transparency in the global financial system.

“We have been able to achieve compliance with the large number of countries in the world, and so this is used as a tool to improve the transparency, improve the kind of requirements that will avoid tax evasion and transfer funds to countries where they can be in avoidance of taxes, evasion of taxes in our jurisdictions, okay. This is the purpose,” she added.

In response, Mr Griffin pushed back firmly against the EU’s assertion of fairness, arguing that the bloc and its affiliated institutions have applied tax and financial regulations in a discriminatory manner. 

He maintained that while the EU promotes the appearance of uniform standards, in practice, a clear double standard exists, particularly when it comes to how EU member states and financial hubs are treated compared to small international financial centres such as The Bahamas.

“I think this is a matter that’s being heavily discussed across the world right now, and I think The Bahamas position on this has been particularly clear. So I note all of your points, but one very sharp example that I’ll give from what you said is that these rules are applied in a non-discriminatory way,  across the board. And that happens to be one of the instances where The Bahamas and many countries in a similar position disagrees,” said Mr Griffin

He argued that countries operating in the same financial ecosystem as The Bahamas, both within and outside the EU, are often not held to the same compliance requirements despite engaging in similar financial services activities.

Mr Griffin pointed to a pattern where EU member states and closely-aligned jurisdictions benefit from regulatory exemptions or more lenient oversight, while countries such as The Bahamas are placed under disproportionate scrutiny and pressure to reform.

“For example, there are many EU institutions that would have the various lists, whether it’s the European Commission, the Council of the European Union, etc. But one thing that is stable across the board is that EU member states do not have to comply with these rules, and so countries in the EU that do very similar work as The Bahamas and other international financial jurisdictions do not have to comply with the same rules,” said Mr Griffin

“In addition, there are select groups of countries across the world outside of the EU financial hubs, such as Singapore, Hong Kong, many states in the United States, again, that do very similar work, but do not have to comply.”

Mr Griffin reinforced The Bahamas’ position that global financial regulation should be consistent and equitable. He reiterated that the current framework allows powerful countries and regions to dictate rules that ultimately favour their own economic interests, while placing an unequal burden on smaller, developing jurisdictions striving to compete in the same global marketplace. 

“I think The Bahamas’ position has been very clear. It is that if the rules are going to be promulgated around the world, it should be fair and really and truly in a non-discriminatory way around the world, and perhaps that we should move from a model where every single multilateral institution, group of countries, regional bodies, each have their own specific rules and regulations that they require different countries to comply with, which should perhaps move to a more global body such as the United Nations that would have the purview of the entire world and that can get widespread support from different organizations and bodies across the world,” said Mr Griffin.

Mr Griffin pointed to Prime Minister, Philip Davis’ continued advocacy at international forums, including the United Nations, as evidence of The Bahamas’ consistent stance on the issue.

He stressed that the country remains deeply committed to upholding international standards, particularly in financial services, but this does not prevent The Bahamas from calling out what it views as unfair practices.

“The point is noted, but I think our Prime Minister has been very open and clear, speaking at forums such as the United Nations on this matter. The Bahamas position is clear that we do think these practices are unfair,” said Mr Griffin

“So on the one hand, while we continue to be one of the most compliant countries in the world, we will continue to comply, but that will not stop our advocacy… to have these rules and systems change for the betterment, not just of the Bahamian people, but to people around the world who are in similar instances.”