JAMAICA has been removed from the European Union’s (EU) list of non-cooperative jurisdictions for tax purposes following amendments to the Special Economic Zones Act (SEZA).

This was confirmed last Tuesday, with Barbados, North Macedonia and Uruguay also being removed from the Annex II state of play document. The amendment to the SEZA ensured Jamaica conformed with international standards of tax transparency which were related to preferential tax regimes as per the EU’s October publication. Jamaica was mentioned in February 2021 as being one jurisdiction aiming to cooperate with the EU in implementing commitments.

“At the same time, I warmly congratulate North Macedonia, Barbados, Jamaica and Uruguay as they successfully fulfilled their commitments and could be removed from the state of play document,” stated Sweden’s Minister of Finance Elisabeth Svantesson in the release.

Four more countries were added to the Annex I list, with the current list now having 16 jurisdictions including The Bahamas, Trinidad and Tobago, the British Virgin Islands, and the US Virgin Islands. The Annex I list, which is also dubbed the black list, is reserved for jurisdictions that don’t cooperate with the EU or have failed to deliver on commitments on implementing necessary reforms. The Annex II list, typically referred to as the grey list, is for jurisdictions that have committed to making reforms in cooperation with the EU.

This decision comes as a victory for the local insurance sector, which would have faced possible repercussions in its reinsurance arrangements if it had been added to the black list in the recent update. The general insurance sector is already facing the fallout from reduced reinsurance capacity that has lead to insurance premiums rising by more than 50 per cent for renewals with existing clients.

The Financial Action Task Force (FATF) is set to give an update on Friday regarding Jamaica’s status on the multilateral body’s grey list. The FATF had set February 2023 as the new follow-up evaluation deadline, after missing its original January 2022 timeline. Barbados, the Cayman Islands, and Haiti are other Caribbean territories on the grey list. The FATF is an intergovernmental organisation aimed at combating money laundering and terrorism financing.

Jamaica was put under increased monitoring in February 2020, with the country having 40 action items based on FATF recommendations. Jamaica was compliant/largely compliant with 27 of these items up to October when Finance Minister Dr Nigel Clarke provided an update on the matter. The last major hurdles at the time were amending the Companies Act to improve the beneficial ownership regime; finalisation of charities regulations; bringing all designated non-financial businesses and professions (DNFBP’s) into the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regime; and ensuring adequate, risk-based supervision in all sectors.

Dr Clarke had indicated a March 2023 deadline to have the amendments brought to Parliament.

The Privy Council ruled on February 9 in favour of the General Legal Council and attorney general of Jamaica against the Jamaica Bar Association on Jamaican statutory regime to combat money laundering. This means that Jamaica would have satisfied international standards in bringing all DNFBP’s under its anti-money laundering and Combating of Terrorism Financing framework.

“For the reasons set out above, the board concludes that the regime does not breach attorneys’ or their clients’ constitutional rights. It follows that the board will humbly advise His Majesty that the appeals should be allowed and that the order of the Full Court should be restored,” the Privy Council judgment stated.

As a result, Jamaica will now move ahead with putting attorneys-at-law under the Proceeds of Crime Act for them to fulfil their reporting obligations, as part of the DNFBP’s framework. Thus, they would have a duty to report suspicious activities/transactions in relation to their clients with the General Legal Council, which will resume its role as the designated body for monitoring compliance.