The Bahamas must expand its diplomatic horizons to ward off the threat of blacklisting, said Attorney General (AG) Carl Bethel, as the country remains in limbo awaiting word from the European Union (EU) on whether it has been removed from the EU’s latest blacklist.
Last week, Deputy Prime Minister Peter Turnquest said he remained hopeful that government had “done more than enough” to be removed from the list, however. Up until Sunday evening, Turnquest told Eyewitness News, that nothing had materialized as yet.
“We anticipated hearing from them this weekend,” Turnquest said.
“Hopefully we will hear something tomorrow (Monday).”
The AG addressed the blacklisting in his contribution to the mid-year budget in the Senate last week, noting that the Ministry of Finance, the Ministry of Financial Services and the Office of the AG, have all been working hand-in-hand as a task force on many fronts against threats, and now the actuality of Blacklisting.
He noted that the task was “enormous” and “complex”.
“Recently, the European Union blacklisted our country, apparently because at the end of the day, we did not use the precise words they wanted to see in the letter,” he said.
“Apparently, they wanted at the very least, for us to cut and paste their exact words into our letter; words contained in certain guidance notes they issued. We have rectified the “error” and are hopeful that the situation will be resolved soon.”
In order to combat the issues, Bethel said, it is clear that The Bahamas must expand its diplomatic horizons to Brussels at the very least, and to set up a consular office, if not a full Embassy.
“There has been some public pushback from the private sector practitioners, particularly lawyers and accountants. We will continue to work closely with the sector and all participants in financial services. However, it is an inescapable reality that change is not coming, it is here already, and it is insistent and relentless,” Bethel said.
“How far we go will depend on consultations with the sector, but quite frankly, also upon the immediacy of the specific mandates being made by the international community. All our major competitors in this region are making necessary regulatory and changes to their laws. The Cayman Islands have recently criminalized tax evasion and “tax crimes”, in order to be fully capable of assisting foreign countries in tax crime cases on the basis of dual criminality.”
The AG acknowledged that The Bahamas may not have to go as far as the Cayman Islands, since the Criminal Justice International Cooperation Act 2000, does allow Bahamian Courts to provide assistance to foreign investigations and proceedings.
This, he said, includes investigations and proceedings into “fiscal offences” without any need for proof that there is a corresponding criminal offence in The Bahamas, and that an amendment to the act may be needed.
Thankfully, however, Bethel said The Bahamas does have a tax information exchange agreement (TIEA) with most countries in the EU and is committed to entering such agreements with all EU members while converting to comply with the group’s common reporting standards.
“This is the world in which we now live, and we must do all in our power to assist the financial services sector to re-position itself and to transition to the new realities,” he said.
“The development of new products and skill-sets will be critical to the ability to compete with the rest of the world on a non-tax sensitive basis.”
