EU tax blacklist could block Pacific trade - expert

Transcript

MARK STAFFORD: The challenge is whether or not the European countries stop processing transactions that relate to Vanuatu coming out of Europe in particular or going into Europe. Obviously if the banks stop processing transactions then we have to look at alternates and that's not something that's new to us, we've had issues in previous years where there have been arbitrary sanctions placed upon doing business with Vanuatu for not much reason but we've been able to work around many of those issues. The real scary thing I suppose, is if we can't trade with European countries and that would have some impact on our capacity to trade in commodities and to import from European countries, consumer goods in particular.

MACKENZIE SMITH: Right and you think that's a genuine concern for Pacific countries who have been placed on this list?

M Stafford: I think it's a concern yes for all countries that have been placed on the list including all of the Pacific ones which has probably come as an equally big surprise to them when they wake up in the morning and read this communique. You might you may be aware that Vanuatu over the past two to three years has made some significant changes to a lot of our legislation to, for example introduce automatic exchange of information. But you know and other things like the amount of due diligence that is required to process any transaction. I find that in Vanuatu, the due diligence requirements of our local banks is a much, much heavier impasse than doing transactions through Australia and New Zealand banks.

M Smith: Vanuatu's Foreign Minister has described this blacklist as trying to play a game when the rules of the game are always changing, the goalposts are always been shifted and there are several different referees. Do you get the sense that this is maybe a bit arbitrary or what is your thinking?

M Stafford: I think it's quite arbitrary. I coined a phrase some years ago when we were in the harmful tax practices division. When I was the chairman of the Vanuatu Finance Centre that it was like playing a game of soccer, where we were defending the goalposts at the bottom of Mount Everest and the Europeans, all they had to do was touch the ball and it was rolling down at 1000 miles an hour.