Offshore financial services are still a viable development option for Caribbean states despite unwelcome pressure from developed countries targeting tax havens in the region, Caribbean Community (Caricom) leaders said yesterday.

Caribbean governments grouped in the 15-nation Caricom have reacted with concern to an international campaign against banking secrecy by G20 leaders which has included increased scrutiny of a string of Caribbean offshore financial centers.

This scrutiny has included many Caribbean jurisdictions being put on an Organisation for Economic Cooperation and Development “grey list” of states viewed as not fully compliant with international tax information standards.

“There is no doubt there is much pressure on the offshore financial services sector, but there is still an opportunity for the region,” Ambassador Irwin LaRocque, Caricom Assistant Secretary-General for Trade and Economic Integration, said in a live webcast news conference broadcast from Guyana.

The G20 and OECD demands for improved financial transparency and regulation have piled pressure on small Caribbean states, many of whom are struggling to cope with the global economic downturn that has badly battered offshore finance and tourism — the pillars of their fragile economies.

At the news conference, Caricom Secretary-General Edwin Carrington recalled that it was industrialized countries and the international financial institutions they dominate which had originally advised Caribbean states to move out of their old sugar and banana industries into financial services.

“We answered many of the criticisms years ago about whether we were tax havens, and financial services being guilty of that role,” Carrington said.

“It is surprising that this pressure is now being brought on us when in fact many of the rules outlined for us to follow are not even followed by enterprises and areas of the developed countries themselves,” he added.

Caribbean leaders argue that the G20/OECD focus on their countries is unfair and discriminatory and say there are offshore financial jurisdictions within the United States, Britain and Europe which fail to fully apply the same transparency standards being demanded of their nations.

Nevertheless, several Caribbean territories and states have scrambled to sign the 12 bilateral tax information exchange agreements required by the OECD to get off its “grey list”.

Caricom members, most of them former British territories, are also lobbying Britain to modify an air passenger duty imposed by Prime Minister Gordon Brown’s government to tax aviation’s carbon emissions, which they say unfairly discriminates against Caribbean tourism destinations.

They say the way the duty is applied means British tourists who fly to U.S. destinations, including far-off Hawaii, pay less duty that those traveling to the Caribbean and they fear this will hurt the recession-hit regional industry.

“At the end of the day, what we are seeking is a reclassification of the Caribbean countries,” Carrington said