Belize: sanctions imminent
The secrecy jurisdiction of Belize in the Gulf of Honduras is prone to stormy weather, and storms are forecast for the period that lies ahead.
The Observer reports that this tiny nation of just 300,000 people is likely to have economic sanctions imposed by the G-20 nations when they meet in Seoul next month. Unlike most other countries on the OECD grey list, Belize has largely ignored requests that it sign up to a minimum of 12 tax information exchange agreements, and just weeks before the agreed deadline has only one agreement - with Belgium (another secrecy jurisdiction) - to its name.
Belize has a chequered history. Originally a part of the Mayan empire, it was disputed for centuries by the Spanish and British, the latter using it for illegal logging activities through the 17th and 18th centuries before finally formalising its status as a colony - British Honduras - in 1854. More recently it became the focus of a protracted dispute between Britain and Guatemala, which delayed its independence until 1981.
Sadly for the people of Belize, centuries of exposure to pirates, illegal loggers, weak governors, tropical storms, illicit drugs trading, massive external debt and high levels of unemployment have bequeathed a weak economy and a vulnerable political system.
One of the more unfortunate legacies of British colonial rule has been the emergence of offshore banking and company registration activities. The country has over 20,000 offshore companies on its register, and its appalling lack of transparency - Belize fails to score a single transparency credit on our Financial Secrecy Index - combined with its geographical location, makes it all too attractive to criminal elements.
With G-20 poised to take action, the outlook seems choppy.