DPM: Bahamas has already satisfied over 30 of 40 FATF recommendations

DPM: Bahamas has already satisfied over 30 of 40 FATF recommendations
Deputy Prime Minister and Minister of Finance the Hon. Peter Turnquest (FILE PHOTO)

NASSAU, BAHAMAS – The Bahamas has already satisfied over 30 of the 40 Financial Action Task Force (FATF) recommendations and continues to take the appropriate measures to ensure that The Bahamas adheres to international best practices, Deputy Prime Minister and Minister of Finance K Peter Turnquest said yesterday.

Turnquest spoke at a Bahamas Financial Services Board (BFSB) Financial Crime and Tax Enforcement Seminar.

“At every level, The Bahamas is doing its part in the global effort to tackle harmful tax practices and dismantle artificial tax practices,” he said.

“We have worked diligently to demonstrate our commitment at the highest political level. The same applies to our efforts with financial crimes such as tax evasion and money laundering. Just this week, the FATF Plenary is in session in Paris, and the Attorney General is leading a delegation to represent The Bahamas.”

The FATF is considered the global standard-setter in combating money laundering and terrorism financing.

Turnquest stated that “for better or better or worse”, The Bahamas is part of a global multilateral process by which national governments collectively review, investigate and prosecute financial crimes and non-compliance matters.

“It is incumbent upon us to be at the forefront of industry developments and proactive in our efforts to secure and strengthen our position as a global financial center,” he said.

He noted that this week the European Union announced that The Bahamas was removed from its tax watch list, as itsEconomic and Financial Affairs Council completely removed The Bahamas from its List of Non-Cooperative Jurisdictions for Tax Purposes.

“This is confirmation that The Bahamas has implemented the necessary reforms to meet the EU criteria on tax governance and cooperation on tax matters. It is confirmation that The Bahamas’ financial services industry is stable and governed by a sound regulatory regime.”

The Bahamas was placed on the EU’s Annex II “greylist” in March of last year. 

While different from the more serious Annex I “blacklist”, The Bahamas was still subject to ongoing monitoring by the EU with respect to the implementation of economic substance requirements.

“With the EU’s decision this week, The Bahamas has addressed all of the concerns on economic substance, removal of preferential exemptions and automatic exchange of tax information,” Turnquest continued.

“The Government welcomes the decision and the positive impact it should have on growth to investor confidence in the industry.”

He also noted that taxation of the digital economy is the next frontier for global regulatory reform.

“In fact, at the G20 Riyadh Summit later this year, nations with some of the largest economies in the world are expected to vote in support of a new system of taxation rights allocation,” Turnquest said.

“The new system intends to prevent multinational companies from diverting taxable income to low tax jurisdictions by imposing minimum tax levels on their global income. There is no doubt, the introduction of a global minimum corporate tax rate will have an impact in the medium and long term on all countries, including The Bahamas. It will have future implications for our participation in the global economy.

“Now is therefore the time to plan and prepare so that we can exercise influence, and better adapt to the new possible realities,” he added.