Saint Vincent and the Grenadines
This report analyses the implementation of the AEOI Standard in Saint Vincent and the Grenadines with respect to the requirements of the AEOI Terms of Reference. It assesses both the legal frameworks put in place to implement the AEOI Standard and the effectiveness of the implementation of the AEOI Standard in practice.
The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.
Overall findings
AEOI legal framework
Saint Vincent and the Grenadines’ legal framework implementing the AEOI Standard is in place but needs improvement in order to be fully consistent with the requirements of the AEOI Terms of Reference. While Saint Vincent and the Grenadines’ international legal framework to exchange the information with all of Saint Vincent and the Grenadines Interested Appropriate Partners (CR2) is consistent with the requirements, its domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) has two main deficiencies significant to the proper functioning of elements of the AEOI Standard. These are, firstly, Saint Vincent and the Grenadines’ legislative framework provides for jurisdiction-specific Non-Reporting Financial Institutions that are not in accordance with the requirements and secondly, there is a deficiency in the enforcement framework in place.
Overall determination on the legal framework: In Place But Needs Improvement
Effectiveness of AEOI in practice
Saint Vincent and the Grenadines’ implementation of the AEOI Standard is not compliant with the requirements of the AEOI Terms of Reference to ensure the effectiveness of the AEOI Standard in practice. This is because there are fundamental issues with respect to ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures (CR1) and with respect to exchanging the information in an effective and timely manner (CR2).
Overall rating in relation to the effectiveness in practice: Non-Compliant
General context
Saint Vincent and the Grenadines commenced exchanges under the AEOI Standard in 2018, and exchanges information on a non-reciprocal basis (i.e. Saint Vincent and the Grenadines sends but does not receive information).
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Saint Vincent and the Grenadines:
enacted the Automatic Exchange of Information (Common reporting Standards) Act 2016; and
introduced the Automatic Exchange of Information (Common reporting Standards) Regulations 2016.
Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 January 2017. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete the due diligence procedures on High Value Individual Accounts by 31 December 2017 and on Lower Value Individual Accounts and Entity Accounts by 31 December 2018.
With respect to the exchange of information under the AEOI Standard, Saint Vincent and the Grenadines is a Party to the Convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2018.
As set out in Table 1, information on the number of Financial Institutions in Saint Vincent and the Grenadines that reported information on Financial Accounts as defined in the AEOI Standard (essentially because they maintained Financial Accounts for Account Holders, or that were related to Controlling Persons, resident in a Reportable Jurisdiction) and the number of Financial Accounts that they reported is not available.
Table 2 sets out the number of exchange partners to which information was successfully sent by Saint Vincent and the Grenadines in the past few years (including where the necessary frameworks were in place, containing an obligation on Reporting Financial Institutions to report information, but no relevant Reportable Accounts were identified). These figures provide key contextual information in relation to Saint Vincent and the Grenadines’ exchanges in practice, which is also analysed in subsequent sections of this report. It is noted that Saint Vincent and the Grenadines did not carry out the exchanges that were due to take place in 2020 and 2021 due to technical problems.
In order to provide for the effective implementation of the AEOI Standard, in Saint Vincent and the Grenadines:
the Inland Revenue Department (the tax authority) has the responsibility to ensure the effective implementation of the due diligence and reporting obligations by Reporting Financial Institutions and for exchanging the information with Saint Vincent and the Grenadines’ exchange partners;
the technical solutions necessary to receive and validate the information reported by Reporting Financial Institutions were put in place by an online portal but Saint Vincent and the Grenadines has experienced technical problems that prevented it from carrying out exchanges in 2020 and 2021; and
the Common Transmission System (CTS) is used for the exchange of the information, along with the associated file preparation and encryption requirements.
It should be noted that the review of Saint Vincent and the Grenadines’ legal frameworks implementing the AEOI Standard concluded with the determination that Saint Vincent and the Grenadines’ domestic legal framework is In Place But Needs Improvement and its international legal framework is In Place. This has been taken into account when reviewing the effectiveness of Saint Vincent and the Grenadines’ implementation of the AEOI Standard in practice, and where particular identified gaps in Saint Vincent and the Grenadines’ legal frameworks directly impact its implementation in practice, these are mentioned below.
Findings and conclusions on the legal frameworks
The detailed findings and conclusions on the AEOI legal frameworks for Saint Vincent and the Grenadines are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.
Determination: In Place But Needs Improvement
Saint Vincent and the Grenadines’ domestic legislative framework is in place and contains most of the key aspects of the CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures, but it needs improvement in relation to the scope of Reporting Financial Institutions required to report information (SR 1.1) and the framework to enforce the requirements (SR 1.4). More specifically, Saint Vincent and the Grenadines provides for jurisdiction-specific Non-Reporting Financial Institutions that are not in accordance with the requirements and there is a deficiency in the enforcement framework in place.
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Saint Vincent and the Grenadines has defined the scope of Reporting Financial Institutions in its domestic legislative framework in a manner that is largely consistent with the CRS and its Commentary. However, certain specific deficiencies have been identified, namely Saint Vincent and the Grenadines provides for two jurisdiction-specific Non-Reporting Financial Institutions that are not in accordance with the requirements. The scope of Reporting Financial Institutions, including the provision of Non-Reporting Financial Institutions, is material to the proper functioning of the AEOI Standard.
Saint Vincent and the Grenadines should amend its domestic legislative framework to remove Friendly Societies from its jurisdiction-specific list of Non-Reporting Financial Institutions as they do not meet the requirements of the AEOI Standard such as in relation to the purpose of the deposits and the restrictions on the contributions and withdrawals.
Saint Vincent and the Grenadines should amend its domestic legislative framework to remove Non-Profit Organisations from its jurisdiction-specific list of Non-Reporting Financial Institutions as they do not meet the requirements in the AEOI Standard.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Saint Vincent and the Grenadines has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and incorporated the due diligence procedures that must be applied to identify them in accordance with the CRS and its Commentary.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Saint Vincent and the Grenadines has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Saint Vincent and the Grenadines has a legislative framework in place to enforce the requirements in a manner that is largely consistent with the CRS and its Commentary. However, a deficiency has been identified. Saint Vincent and the Grenadines’ legislative framework does not include sanctions on Reporting Financial Institutions for failing to apply due diligence procedures in accordance with the AEOI Standard. This is a key element of the required enforcement framework and is therefore material to the proper functioning of the AEOI Standard.
Saint Vincent and the Grenadines should amend its domestic legislative framework to include sanctions for failure to apply the due diligence and reporting procedures, rather than being limited to failures leading to incorrect reporting.
CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.
Saint Vincent and the Grenadines’ international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Saint Vincent and the Grenadines’ Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Saint Vincent and the Grenadines and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3).
SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.
Saint Vincent and the Grenadines has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.
SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.
Saint Vincent and the Grenadines put in place its exchange agreements without undue delay.
SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.
Saint Vincent and the Grenadines’ exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.
Assessed jurisdiction’s comments on the assessment of its legal frameworks
Saint Vincent and the Grenadines remains committed to ensuring that its legal framework for the implementation of the AEOI Standard is fully consistent with the requirements of the AEOI Terms of Reference.
Saint Vincent and the Grenadines notes the recommendations made and will work towards meeting these recommendations.
At the same time, Saint Vincent and the Grenadines wishes to record by way of comment, one matter arising from its present assessment. While Saint Vincent and the Grenadines immediately sees the necessity of removing Non-Profit Organizations from its List of Non-Reporting Financial Institutions, the country is obliged to indicate its view that the recommendation with respect to Friendly Societies does not properly reflect the facts in our jurisdiction with respect to this type of financial entity. A Friendly Society is an indigenous community driven, alternative savings association, developed to address a particular need of rural communities in relation to the affordability of burial expenses. Though the narrow purpose of the Friendly Society is a financial benefit upon the occurrence of death, one other incidental purpose has evolved along the years, in the form of very small savings brought about by any contribution in excess of the required contribution, being returned to the member once annually.
The authorities in Saint Vincent and the Grenadines are unable to refute the conclusion that based on the technical requirements of the Standard for Automatic Exchange of Financial Account Information in Tax Matters, a Friendly Society under the law of Saint Vincent and the Grenadines is precluded from being classified as a Broad Participation Retirement Fund, or strictly captured under Sub-Paragraph B(5)(1)(c). However, in the country’s specific context, the authorities in Saint Vincent and the Grenadines wish to underscore that Friendly Societies are an example of a financial entity which fulfils the technical requirements of the Standards of being a Reporting Institution, however, its operational basis for AEOI is nil or negligible and likewise its financial account information will invariably have nil or negligible value to the country’s AEOI partners.
The jurisdiction suggests that it may be worthwhile to consider whether it should be given an opportunity to bring Friendly Societies more in line with the requirements of a Non-Reporting Financial Institution as a more apposite treatment of this particular entity, rather than incurring an administrative burden on this type of low risk entity and causing a deluge of information to the country’s AEOI partners, which the authorities are confident would serve no useful or relevant purpose in tackling tax evasion and avoidance.
Saint Vincent and the Grenadines reiterates its commitment to being a responsible, co-operative and accountable tax jurisdiction, as has been demonstrated by measures taken, both legislative and administrative, over the past several years.
Findings and conclusions in relation to effectiveness in practice
The detailed findings and conclusions in relation to effectiveness in practice of AEOI for Saint Vincent and the Grenadines are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Effectiveness in practice: Jurisdictions should ensure that in practice Reporting Financial Institutions correctly implement the due diligence and reporting procedures, which includes a requirement for jurisdictions to have in place an administrative framework to ensure the effective implementation of the CRS.
Saint Vincent and the Grenadines’ implementation of the AEOI Standard is non-compliant with respect to ensuring that Reporting Financial Institutions are correctly conducting the due diligence and reporting procedures. More specifically, while Saint Vincent and the Grenadines is meeting expectations with respect to collaboration with its exchange partners to ensure effectiveness (SR 1.6), there are fundamental issues with respect to ensuring effectiveness in a domestic context, such as through having an effective administrative compliance framework and related procedures (SR 1.5).
SR 1.5 Jurisdictions should ensure that in practice Reporting Financial Institutions identify the Financial Accounts they maintain, identify the Reportable Accounts among those Financial Accounts, as well as their Account Holders, and where relevant Controlling Persons, by correctly conducting the due diligence procedures and collect and report the required information with respect to each Reportable Account. This includes having in place:
an effective administrative compliance framework to ensure the effective implementation of, and compliance with, the CRS. This framework should:
be based on a strategy that facilitates compliance by Reporting Financial Institutions and which is informed by a risk assessment in respect of the effective implementation of the CRS that takes into account relevant information sources (including third party sources);
include procedures to ensure that Financial Institutions correctly apply the definitions of Reporting Financial Institutions and Non-Reporting Financial Institutions;
include procedures to periodically verify Reporting Financial Institutions’ compliance, conducted by authorities that have adequate powers with respect to the reviewed Reporting Financial Institutions, with procedures to access the records they maintain; and
effective procedures to ensure that Financial Institutions, persons or intermediaries do not circumvent the due diligence and reporting procedures;
effective enforcement mechanisms to address non-compliance by Reporting Financial Institutions;
strong measures to ensure that valid self-certifications are always obtained for New Accounts;
effective procedures to ensure that each, or each type of, jurisdiction-specific Non-Reporting Financial Institution and Excluded Account continue to present a low risk of being used to evade tax; and
effective procedures to follow up with a Reporting Financial Institution when undocumented accounts are reported in order to establish the reasons why such information is being reported.
In order to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, Saint Vincent and the Grenadines implemented some of the requirements in accordance with expectations. However, fundamental issues were identified. The key findings were as follows:
Saint Vincent and the Grenadines has carried out communication activities to help promote compliance and has conducted a risk assessment that took into account the information provided by the financial regulators and areas of possible uncertainty highlighted during the review of its legislative framework. However, Saint Vincent and the Grenadines does not have a clearly defined overarching compliance strategy to ensure that Financial Institutions correctly implement the requirements under the AEOI Standard in practice.
Saint Vincent and the Grenadines has worked to understand its population of Financial Institutions, including non-regulated entities, utilising various relevant information sources, such as the list of regulated entities from the financial regulators and the Foreign Financial Institutions list for FATCA purposes. However, Saint Vincent and the Grenadines has not yet taken actions to verify that Reporting Financial Institutions are classifying themselves correctly under its domestic rules and reporting information as required. There is also no clearly defined, written policy to keep its understanding of its Financial Institution population up to date on a routine basis.
The institution responsible for implementing Saint Vincent and the Grenadines’ compliance strategy does not appear to have the necessary resources to discharge its functions. The lack of technical resources raises significant concerns on Saint Vincent and the Grenadines’ ability to effectively implement an operational plan to verify compliance with the requirements, incorporating appropriate compliance activities.
Saint Vincent and the Grenadines lacks defined procedures to review and verify compliance. Furthermore, in practice, no dedicated AEOI-related compliance activities including in-depth reviews or the inspection of records held by Reporting Financial Institutions have yet been undertaken. Saint Vincent and the Grenadines is also unable to demonstrate how it will effectively address non-compliance where it is identified. This reflects its lack of a legal basis to impose sanctions for failure to comply with the due diligence procedures.
Saint Vincent and the Grenadines does not have procedures to follow up with Reporting Financial Institutions when undocumented accounts are reported, nor does it have procedures to address circumvention of the due diligence and reporting procedures by Financial Institutions, persons or intermediaries.
Saint Vincent and the Grenadines also does not have a clearly defined policy in place to keep its jurisdiction-specific list of Non-Reporting Financial Institutions under review to ensure it continues to pose a low risk of being used for tax evasion purposes. Saint Vincent and the Grenadines has two categories of Non-Reporting Financial Institutions that have been recommended to be removed from its jurisdiction-specific list of Non-Reporting Financial Institutions.
Table 3 provides a summary of the specific activities undertaken, or that are planned to be undertaken, in relation to each of the key parts of the framework described above.
Saint Vincent and the Grenadines was not able to confirm that it collects and monitors information on the proportion of Financial Accounts that are reported that include information on the Tax Identification Numbers and dates of birth with respect to the individuals associated with them. These data points are key to exchange partners to effectively utilise the information and are important to developing an effective compliance strategy to ensure the AEOI Standard is being effectively implemented. Saint Vincent and the Grenadines needs to confirm that it collects and monitors information on the number of undocumented accounts reported by its Reporting Financial Institutions. This information will be crucial to implementing the requirement to follow up on undocumented accounts.
Based on these findings it was concluded that Saint Vincent and the Grenadines is not meeting expectations in ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, including by having in place the required administrative compliance framework and related procedures. More specifically, fundamental issues have been identified, including with respect to the lack of a clearly defined overarching compliance strategy, a lack of requisite actions to ensure Reporting Financial Institutions are classifying themselves correctly under its domestic rules and reporting information as required, a lack of technical resources to discharge the Competent Authority’s functions with respect to the AEOI Standard and an inability to impose sanctions for failure to comply with the due diligence procedures. Saint Vincent and the Grenadines should therefore continue its implementation process accordingly, including by addressing the recommendations made.
Saint Vincent and the Grenadines should develop and implement an overarching compliance strategy to underpin its compliance activities, informed by a risk assessment that takes into account a range of relevant information sources.
Saint Vincent and the Grenadines should develop and implement effective procedures to identify its population of Financial Institutions to ensure that they correctly apply the definitions of Reporting Financial Institution and Non-Reporting Financial Institution and report information as required, specifically including non-regulated entities that are Financial Institutions for the purposes of the AEOI Standard.
Saint Vincent and the Grenadines should develop and implement effective enforcement mechanisms to address non-compliance by Reporting Financial Institutions, including the application of dissuasive penalties and sanctions as appropriate, and routinely apply them where non-compliance is identified. Reference is made to the recommendations made when assessing Saint Vincent and the Grenadines’ legal frameworks implementing the AEOI Standard in relation to penalties in particular.
Saint Vincent and the Grenadines should implement systems to monitor the reporting of Tax Identification Numbers and dates of birth by Reporting Financial Institutions to inform its compliance strategy. Saint Vincent and the Grenadines should develop and implement effective procedures to monitor and verify whether Reporting Financial Institutions are obtaining valid self-certifications as required, including dedicated communication activities, with a particular focus on the monitoring and verification of self-certifications obtained after the opening of a Financial Account.
Saint Vincent and the Grenadines should put in place and implement a clearly defined policy to identify and follow up with Reporting Financial Institutions that report undocumented accounts to ensure that the requirements are being complied with.
Saint Vincent and the Grenadines should put in place a clearly defined policy to ensure that, where circumvention of the AEOI Standard is identified, action is taken to address it.
Saint Vincent and the Grenadines should establish a plan to periodically review its list of jurisdiction-specific Non-Reporting Financial Institutions to ensure it continues to present a low-risk of being used for tax evasion.
SR 1.6 Jurisdictions should collaborate on compliance and enforcement. This requires jurisdictions to:
use all appropriate measures available under the jurisdiction’s domestic law to address errors or non-compliance notified to the jurisdiction by an exchange partner; and
have in place effective procedures to notify an exchange partner of errors that may have led to incomplete or incorrect information reporting or non-compliance with the due diligence or reporting procedures by a Reporting Financial Institution in the jurisdiction of the exchange partner.
It should be noted that, as Saint Vincent and the Grenadines exchanges information on a non-reciprocal basis and does not therefore receive information, it is not required to have in place procedures to notify its exchange partners. SR 1.6 b) has therefore not been assessed in this case.
In order to collaborate on compliance and enforcement, it appears that Saint Vincent and the Grenadines implemented all of the requirements in relation to issues notified to them (i.e. under Section 4 of the MCAA or equivalent) in accordance with expectations. While no such notifications have yet been received and exchange partners had limited opportunity to utilise the notifications as Saint Vincent and the Grenadines did not carry out the exchanges due to take place in 2020 and 2021, it appears that Saint Vincent and the Grenadines has the necessary procedures to process them as required.
Based on these findings it was concluded that Saint Vincent and the Grenadines is fully meeting expectations in relation to collaborating with its exchange partners to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures. Saint Vincent and the Grenadines is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
CR2 Effectiveness in practice: Jurisdictions should exchange the information effectively in practice, in a timely manner, including by sorting, preparing, validating and transmitting it in accordance with the AEOI Standard.
Saint Vincent and the Grenadines’ implementation of the AEOI Standard is non-compliant with respect to exchanging the information effectively in practice and in a timely manner. More specifically, while Saint Vincent and the Grenadines is meeting expectations with respect correctly putting transmission mechanisms in place (SR 2.5), there are fundamental issues with respect to Saint Vincent and the Grenadines transmitting the information in a timely manner (SR 2.6). Furthermore, due to the delays in exchanges, it was not possible to assess Saint Vincent and the Grenadines' implementation of the requirements in relation to sorting, preparing and validating the information (SR 2.4) and the correct transmission of the information in practice (SR 2.7). The requirements in relation to the receipt of the information (SR 2.8) have not been assessed as Saint Vincent and the Grenadines exchanges information non-reciprocally, so does not receive information. Saint Vincent and the Grenadines should continue its implementation process to ensure its effectiveness, including by addressing the recommendations made.
SR 2.4 Jurisdictions should sort, prepare and validate the information in accordance with the CRS XML Schema and the associated requirements in the CRS XML Schema User Guide and the File Error and Correction-related validations in the Status Message User Guide (i.e. the 50000 and 80000 range).
No feedback has been received from Saint Vincent and the Grenadines’ exchange partners with respect to their ability to process the information received from Saint Vincent and the Grenadines and therefore with respect to Saint Vincent and the Grenadines’ implementation of these requirements. This reflects the fact that Saint Vincent and the Grenadines did not carry out the exchanges that were due to take place in 2020 and 2021 due to technical problems.
It has therefore not been possible to review Saint Vincent and the Grenadines in relation to SR 2.4.
SR 2.5 Jurisdictions should agree and use, with each exchange partner, transmission methods that meet appropriate minimum standards to ensure the confidentiality and integrity of the data throughout the transmission, including its encryption to a minimum secure standard.
In order to put in place an agreed transmission method that meets appropriate minimum standards in confidentiality, integrity of the data and encryption for use with each of its exchange partners, Saint Vincent and the Grenadines linked to the CTS.
Based on these findings it was concluded that Saint Vincent and the Grenadines is fully meeting expectations in relation to agreeing and using appropriate transmission methods with each of its partners. Saint Vincent and the Grenadines is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.6 Jurisdictions should carry out all exchanges annually within nine months of the end of the calendar year to which the information relates.
Whilst Saint Vincent and the Grenadines was able to exchange information in 2018 and 2019, it has subsequently faced significant technical issues and has consequently not yet carried out the exchanges that were due to take place in 2020 and 2021.
Based on these findings it was concluded that Saint Vincent and the Grenadines is not meeting expectations in relation to exchanging the information in a timely manner. More specifically, fundamental issues have been identified, including with respect to the technical capacity to ensure the exchanges with all partners in a timely manner. Saint Vincent and the Grenadines should continue its implementation process to ensure its effectiveness, including by addressing the recommendations made.
Saint Vincent and the Grenadines should ensure that it sends information to all of its partners in a timely manner.
SR 2.7 Jurisdictions should send the information in accordance with the agreed transmission methods and encryption standards.
No feedback has been received from Saint Vincent and the Grenadines’ exchange partners with respect to Saint Vincent and the Grenadines’ use of the agreed transmission methods and therefore with Saint Vincent and the Grenadines’ implementation of this requirement, as Saint Vincent and the Grenadines did not carry out exchanges in 2020 and 2021 due to technical problems.
It has therefore not been possible to review Saint Vincent and the Grenadines in relation to SR 2.7.
SR 2.8 Jurisdictions should have the systems in place to receive information and, once it has been received, should send a status message to the sending jurisdictions in accordance with the CRS Status Message XML Schema and the related User Guide.
It should be noted that, as Saint Vincent and the Grenadines exchanges information on a non-reciprocal basis and does not receive information, it is not required to have in place systems to receive the information and provide status messages. SR 2.8 has therefore not been assessed in this case.
SR 2.9 Jurisdictions should respond to a notification from an exchange partner as referred to in Section 4 of the Model CAA (which may include Status Messages) in accordance with the timelines set out in the Commentary to Section 4 of the Model CAA. In all other cases, jurisdictions should send corrected, amended or additional information received from a Reporting Financial Institution as soon as possible after it has been received.
Given the technical difficulties that Saint Vincent and the Grenadines has experienced, it is unclear that corrected, amended or additional information will be provided in a timely manner. Nevertheless, it has not been tested and no such concerns were raised by Saint Vincent and the Grenadines’ exchange partners.
Based on these findings and as no particular issues were identified, it was concluded that Saint Vincent and the Grenadines appears to be meeting expectations in relation to responding to notifications from exchange partners and the sending of corrected, amended or additional information. Saint Vincent and the Grenadines is encouraged to continue to ensure the ongoing effectiveness of its implementation.
Assessed jurisdiction’s comments on the assessment of effectiveness in practice
St. Vincent and the Grenadines has experienced certain unavoidable setbacks at the institutional and national levels which have stymied progress towards the effective implementation of AEOI.
Firstly, the cited technical difficulties besieged the IRD for an unduly lengthy period. For the large part of this time, rectification remained out of the control of the IRD as this originated from more than one issue with the external/international network service provider, upon whom the IRD and the country are wholly dependent. These technical difficulties were finally resolved in late March 2022 and AEOI exchanges for 2020 and 2021 were thereafter able to take place. This is because the Financial Institutions in St. Vincent and the Grenadines, as well as the IRD, had been in a state of readiness to meet AEOI obligations but were prevented from so doing by said technical issues.
Secondly, greater progress to effective implementation which would have been made in 2020, was forestalled by the advent of the Coronavirus Pandemic from March 2020.
The Pandemic resulted in staff at the IRD working on reduced hours or rotation, for the large majority of 2020 and also periodically in 2021. There are no facilities to provide legal or physical access to systems of the IRD when one works outside of the offices of the IRD. Compounding matters and simultaneously experienced with the disruptive effects of the Pandemic, were the worst Dengue Fever outbreak in its history in the second half of 2020 and multiple volcanic eruptions from early April 2021. Hurricane Elsa followed with devastating effects, mere weeks after the worst volcanic eruption. The country was officially declared to be under a ‘national crisis’ following the stated eruptions, as was recognized by international bodies such as the World Bank and the United Nations. From April 9th 2021, the rest of the year 2021 was thus one of recovery for the country, with the commencement of rehabilitation only possible from the last quarter of 2021. Even this was complicated with setbacks in workplaces with the worst Coronavirus increase and unprecedented deaths in the said quarter and the first quarter 2022.
The authorities in St. Vincent and the Grenadines recognize and are working towards bolstering the human and technical resources at the IRD to more effectively address all matters relative to a more effective administrative framework. In the meantime, though some of the more developed and formalized processes to ensure circumvention, or to ensure dedicated communication or guidance, have not yet been fully implemented, in practice, the AEOI administrative framework administered by the IRD and supported from the supervisory authorities, provide a sound foundation from which a more effective structure can be built. Until such time, St. Vincent and the Grenadines will diligently address any issues which arise from its obligations to any exchange partner on a case by case basis.
In addition, amendments have already been drafted to the AEOI Act and Regulations to ensure that legislative recommendations are met, including sanctions for non-compliance of due diligence procedures are enacted earliest. The authorities of St. Vincent and the Grenadines are confident that undocumented accounts as described under the AEOI framework, do not pose a risk or threat to the AEOI regime due to very effective implementation of the country’s AML/CFT and regulatory regimes. Finally, a national GAP analysis of the AEOI regime utilizing the previous and current recommendations of the Assessment is ongoing, with the objective of implementation of recommendations in 2022. Parts thereof are already weighing heavily into an AEOI Compliance Strategy, Framework and Procedures document, which is also being prepared. The conclusions of the afore-stated analysis will finally inform this document, as appropriate.
Saint Vincent and the Grenadines deeply regrets its inability to progress AEOI matters with the effectiveness required, owing to myriad extraneous and unavoidable internal reasons. The country wishes to express its commitment to rectifying the non-complaint issues identified in this Report, in the shortest time possible.