Financial Services Industry welcomes EU ‘grey list’ removal

Financial Services Industry welcomes EU ‘grey list’ removal
European Union flag

NASSAU, BAHAMAS – Financial Services industry stakeholders yesterday welcomed the news of The Bahamas’s removal from the European Union’s ‘grey list’, noting that it is anticipated to have a positive impact on the sector and investor confidence generally.

The European Union’s Economic and Financial Affairs Council completely removed The Bahamas from its List of Non-Cooperative Jurisdictions for Tax Purposes, at their meeting in Brussels yesterday.

In a statement, the EU confirmed that The Bahamas has implemented the necessary reforms to meet the EU criteria on tax governance and cooperation on tax matters.

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

In March 2019, The Bahamas was placed on the EU’s Annex II “the greylist”.  

Although different from the more serious Annex I “the blacklist” of the EU List of Non-Cooperative Jurisdiction for Tax Purposes, The Bahamas was still subject to ongoing monitoring by the EU with respect to the implementation of economic substance requirements.

With today’s move, The Bahamas has addressed all of the concerns on economic substance, removal of preferential exemptions and automatic exchange of tax information.

The Bahamas Financial Services Board and the Association of International Bank and trust Companies (AIBT) said in a statement yesterday, “BFSB and AIBT welcome the news of The European Union’s Economic and Financial Affairs Council’s complete removal of The Bahamas from its List of Non-Cooperative Jurisdictions for Tax Purposes, at their meeting in Brussels. This was done in recognition of The Bahamas having implemented all of the necessary reforms to meet the EU criteria on tax governance and tax cooperation. The move by the EU underscores The Bahamas’ commitment to adhere to global regulations and international best practices as a premiere international financial centre. The decision acknowledges that The Bahamas has implemented all the necessary reform to address concerns regarding economic substance, removal of preferential exemptions and automatic exchange of tax information.”

The statement continued, “Industry stakeholders welcome today’s decision and the positive impact we anticipate that it will have on the financial services sector and on investor confidence generally. We commend the Bahamas government, in particular the team at The Ministry of Finance, for its collaborative approach, steadfastness and ongoing dialogue with industry bodies such as BFSB and AIBT to ensure that practitioners understand the nature and reasoning for the various reforms and have a say in the implementation process. This evidences commitment to public private sector partnership. Throughout the entire process of reform, The Bahamas has demonstrated commitment at the highest political level to ensuring that as jurisdiction we comply with international standards on information exchange, tackling harmful tax practices, dismantling artificial tax structures and prevention of financial crime which is critical to our value proposition as a well-regulated international financial center. We look forward to continued stakeholder engagement on these issues, the development of a strategic plan for the sector and other emerging international initiatives to ensure that we persist in repositioning the financial services sector for long term viability.”

Deputy Prime Minister K Peter Turnquest commenting on the matter ahead of yesterday’s Cabinet meeting said, “This is a significant achievement and we are very happy that we have been able to demonstrate that we are cooperative and that we are responsive to the international community and international standards. I want to thank the team that has worked on this. We have had some very qualified professionals working with the regulators and working with the industry to achieve this result.  We have been saying all along to the international community that we are partners in this overall fight of global terrorism financing, with anti-money laundering initiatives and with the exchange of information for tax purposes. We want to be partners in this community of financial regulators.”

He added, “As long as we have communication and we know what the expectations are, The Bahamas can and will rise to the occasion and meet the standard. That’s what we did here. Once we knew what the issues were we dealt with them and we dealt with them expeditiously. For all of our partners this sis the message we want to send, that the Bahamas is fully committed to the overall regulation of the industry. We are a premier financial services jurisdiction and we protect that jealously because we know what that means in tear sot our GDP and our overall projection of our middle class sin particular. This is a very significant achievement. It will certainly bring confidence to the industry here in The Bahamas as well as those financial service providers and clients looking at The Bahamas as a jurisdiction for the management of their wealth.”