G-20 Outcomes and OECD Report
by The Honourable Sela Molisa MP, Minister of Finance and Economic Management

Good evening ladies and gentlemen from the media, and a warm welcome

to our listening and viewing audiences. We are grateful that you could join us at such short notice.

I know many of you are interested in hearing the Government’s position regarding the outcomes from the G-20 Summit in London on 2 April, and the related report issued by the OECD

on progress by financial centres around the world towards implementation of international standards on exchange of information on tax matters, and the treatment of Vanuatu within that report. On those G-20 outcomes, the Vanuatu Government is reviewing the proposed measures announced on 2 April - particularly those related to strengthening financial supervision and regulation, resisting protectionism and promoting global trade and investment and strengthening global financial institutions. Government will be looking for opportunities to engage with international standard setters directly or through government counterparts to provide our input where we can, keeping with our commitment to pursue a financial system that is strong and transparent, and meet international standards and best practices. We realize the need for Vanuatu to pursue independent policy stances, free from influences imposed by external factors, however, the weakness imposed by our shear size and other vulnerabilities are major setbacks that force us to pursue measures that correspond adequately to such external pressures. On the OECD progress report, we have taken note of Vanuatu’s position and believe that the Vanuatu is cast in the "lighter shade of grey" among the financial centres with which we have been listed. To graduate to the “White List” however, we will need to enter into at least 12 Tax Information Exchange Agreements.

Our position is informed by the fact that we are currently:

1. Overhauling the legislative framework of our finance centre. By early 2010, our laws should then be on par with other jurisdictions around the world;

1. We are also now consolidating our regulatory functions under the Reserve Bank of Vanuatu. Previously the Reserve Bank of Vanuatu was the regulator for banks and financial institutions only. This however, will change during 2009 to include the regulation of insurance business and credit unions;

1. Assessments conducted by international organizations such as the International Monetary Fund, Financial Action Task Force, Asia/Pacific Group on Money laundering, and the Offshore Group of Banking Supervisors of our ability to supervise and regulate financial institutions in the country have commended the positive efforts of our government. So far the assessments have found that we are “largely compliant” with internationally accepted standards and best practices;

1. Arrangements are being made to seek membership of the World Trade Organization (WTO); and

1. It is the intention of this government to conclude at least one Double Taxation Agreement during 2009. Logistical arrangements are being completed for government to begin the negotiation process.

Vanuatu has committed to OECD standards for transparency and exchange of information in tax matters in May of 2003. We have upheld that commitment by working with the OECD and non-OECD colleagues to design and implement effective standards. Vanuatu is in a strong position to achieve additional recognition for our efforts that we have earned and we will continue our policy of commitment to international standards and best practices including those in the area of exchange of information on tax matters. It is however, important to note that the existence of tax havens such as the one we have in Vanuatu did not contribute to the current global crisis. Rather, the cause is poor regulation and bad investments by major investments banks in developed countries especially in the United States.

2009:10th April

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Last Updated on Thursday, 30 June 2011 11:11