NASSAU, BAHAMAS – A busy year of persistent modifications to regulations governing the financial services industry may finally be producing results, with executives pleased The Bahamas was left off of the European Union’s updated blacklist of countries seen as non-cooperative.
While the EU’s Economic and Financial Affairs Council expanded its list of non-cooperative Jurisdictions for Tax Purposes by 10 on Tuesday, local industry executives expressed satisfaction for avoiding that blacklisting.
A statement from the Bahamas Financial Services Board (BFSB) and the Association of International Banks and Trusts Companies (AIBT) said it would continue working with the government as it did over the past year to address the concerns raised by the European Union in March of 2018.
“We will continue to support the government as it moves to implement the measures that have been taken,” said BFSB Executive Director Tanya McCartney. “This is an ongoing effort that requires us to adhere to international standards whilst acknowledging the importance of the financial services sector to our economy.”
The organization’s pledged support of the government in taking necessary steps to avoid adverse impact to The Bahamas as an international financial centre and in its pursuit of initiatives for sustainable industry growth and development.
Deputy Prime Minister and Minister of Finance, Peter Turnquest said complying with the evolving international standards was important to the government.
The “significant” financial and human capital resources allocated, he said, were to ensure the effectiveness of the legal and regulatory framework and driving the growth of the industry,” he said.
“Our ongoing cooperation with the EU and the positive evaluation of the country sends a strong signal to the international community that The Bahamas’ financial services industry is stable and governed by a sound regulatory regime.
“The government will continue to promote engagement with all stakeholders on these issues to ensure The Bahamas remains the preferred jurisdiction of choice for financial services in the region.”
It’s a commitment reinforced by AIBT co-chair Bruno Roberts, noting that the efforts will have to be ongoing.
“The EU has made it clear that we will be subject to continued monitoring,” he said. “Industry stakeholders are committed to doing their part to meet the requirements set for the business of international financial services.”
Over the past year, private sector execs have been providing input to policymakers on various measures needed to secure the sustainability of the industry.
Some of the results have brought about changes to the business license and regulatory regime for financial institutions, which remove the distinction between domestic and international financial institutions, and the enactment of a suite of new laws embody this commitment to curb harmful tax practices.
These laws include: The Multinational Entities Financial Reporting Act, 2018 which prescribes reporting requirements for multinational groups with annual revenue in excess of $850 million dollars; The Commercial Entities (Substance Requirements) Act, 2018 (and accompanying public guidelines), which requires that certain entities must demonstrate real business activity and have a substantial economic presence in The Bahamas; The Removal of Preferential Exemptions Act, 2018 which equalizes the tax treatment of resident and non-resident companies; The Beneficial Ownership Act, 2018 which requires that the beneficial ownership details of corporate entities be filed and retained in a secure, government database and the Penal Code (Amendment) Act, 2018 which makes tax evasion a crime in The Bahamas.