Foreign policy and defense
St. Kitts and Nevis is a nation in North America. Its capital city is Basseterre. Saint Kitts and Nevis have extensive cooperation with neighbors in the Caribbean, and the ties are also strong to the US and the EU. Regional cooperation is primarily about economic cooperation. With the US, Saint Kitts and Nevis have a security cooperation.
Saint Kitts and Nevis are members of the regional cooperation organization Caricom (Caribbean Community), whose 15 members, among other things, strive to create a common economic market. In 2006, the first step was taken when six members founded what is called a single market (Caricom Single Market, CSM). This means that members have common duties on goods from other countries, that capital and labor can be freely moved between the countries and that members revise economic laws in order to make them more coherent. In the long term, a common currency will be introduced. Saint Kitts and Nevis have joined the united market.
The country is also part of the Eastern Caribbean Cooperation Organization OECS (Organization of Eastern Caribbean States) which has the ambition to become a counterpart to the EU. The seven OECS members share the same currency and a joint central bank. Citizens of the Member States can also travel freely within the OECS area and trade barriers between countries have been torn down.
Criticized tax haven
The ties to the US and the UK are strong. Both the US and EU countries favor imports from Saint Kitts and Nevis through various agreements. The country is also a member of the US-backed Security Policy cooperation Regional Security System and has an agreement with the United States to combat drug smuggling. The agreement gives the US military and Coast Guard the right to strike at suspected smugglers on the territorial waters of Saint Kitts and Nevis.
The country’s low taxes and liberal financial sector have led to some wear and tear in relations with the United States and other Western countries. Following pressure from the Western Economic Cooperation Organization (OECD) in the early 2000s, a series of laws were made that made it more difficult for criminals to use the country’s banks to “launder” money (converting illegal income into legal through various transactions). As a member of Caricom, Saint Kitts and Nevis also participate in a collaboration with the UK to strengthen the legal institutions and prevent money laundering.
The measures led to Saint Kitts and Nevis being removed from the OECD’s so-called black list of non-cooperative tax havens. However, the country remained on the OECD’s “gray list” which meant that the measures implemented were not considered sufficient. In 2009, new laws were passed to meet the OECD’s requirements and then the country was also removed from the “gray list”. However, Saint Kitts and Nevis continue to receive criticism from the US and the EU for not doing enough to stop tax evasion and money laundering.
Assistance from Taiwan and Japan
China and Taiwan are trying to trump each other with promises of aid to the countries of the Caribbean. The intention is to win support for each line in the mutual conflict over Taiwan’s status. Saint Kitts and Nevis have chosen to stand on Taiwan’s side and in return have received financial support from the Taipei government. Among other things, the airport in the capital Basseterre and the city’s central square have been expanded with Taiwanese money. Taiwan has also contributed money to the education sector and cultural projects.
Saint Kitts and Nevis also receive assistance from Japan, which is linked to the fact that the country in the International Whaling Commission has supported Japan’s demand to resume commercial hunting for whales.
Within the framework of the Petrocaribe oil cooperation initiated by Venezuela, Saint Kitts and Nevis and a number of other countries in the region can buy Venezuelan oil with good credit and favorable conditions.
Defense
In 1997, the country’s defense was reestablished after being shut down since 1981. The emphasis was on building a coastguard unit with the task of fighting drug traffickers. At the same time, a minimal army compound and a police force were set up. Saint Kitts and Nevis have military training agreements with the United States and the United Kingdom.