National Development Bank might be a temporary solution for those affected.
PHILIPSBURG:— Minister of Finance Richard Gibson Sr. acknowledged that several persons have been affected through the banking system on St. Maarten due to the FATCA rules and regulation. SMN News asked the Minister of Finance if he was aware of the amount of businesses and private citizens that are being affected even though they are legally compliant. According to information provided to SMN News banks on St. Maarten are selecting people and tell them they need to close their bank accounts and seek services elsewhere, even though the persons selected are legally compliant. Minister Gibson in his response said the matter is a “vexing” issue and government is fully aware of the situation. He said the previous government left it up to the banks to report to FATCA instead of government doing the reporting. He said institutions that does not comply with the FATCA regulations could be exposed to astronomical fines for non-compliance. Minister Gibson further explained that this matter is not only affecting St. Maarten but it is affecting the entire Caribbean region/world. He said the financial institutions would earmark certain accounts they deem as high risk accounts and report them to the FATCA. He said when that happens the clients are being called in and are asked to close their accounts and to find another institution to do business. He also said the banks are not obligated to give their services to everyone, instead they have a right to choose their clients besides that the banks on St. Maarten have their headquarters overseas and they are the ones that makes the call on which accounts they consider high risk. He said that under the FATCA regime has given countries the choice to exchange information through government or the financial institution, however, the former government chose to leave the reporting to the financial institutions. The MInister of FInance said when the CRS is implemented sometime next year that will give government a bit or leeway in the reporting system.
He said the Council of Ministers held meetings with persons that have suffered from the decisions taken by the banks on St. Maarten and for now the only solution he sees for now is to have the National Development Bank that will have an arm that could service businesses or persons on St. Maarten to transact business locally and not overseas.
Etienne Ys to evaluate St. Maarten Tax System
SMN News learnt from well-placed sources that the Minister of Finance Richard Gibson Sr met with former Prime Minister of the Netherlands Antilles Etienne Ys during his recent visit to Curacao in order to hire him to evaluate St. Maarten Tax system. On Wednesday SMN News reporter asked the Minister of Finance if Ys was contacted and what contribution the former Prime Minister could make to St. Maarten while Curacao economy is collapsing. Minister Gibson confirmed that he consulted with Ys and requested his services to evaluate St. Maarten Tax system. He said that Ys was the President of Curacao’s Financial Association, while he is a tax expert and has vast experience in advising on matters relating to taxes. Gibson said he did invite Ys to St. Maarten to conduct the evaluation especially since Curacao and Aruba revised their tax system and St. Maarten is running behind and it is losing its competitive edge. He said that the country cannot jump into tax reform because things may very well go haywire. Gibson said at the moment he is conducting general discussions but in the month of May there will be a general discussion with the three countries, Aruba, Curacao, and St. Maarten and the more information he gets will be useful to St. Maarten moreover, he felt that St. Maarten would benefit from Ys experience and knowledge since he is in private practice.
Source: St. Martin News Network
FATCA compliance affected a number of businesses and private individuals.