Optimism that amendments to Act will satisfy EU requirements

Optimism that amendments to Act will satisfy EU requirements
Tanya McCartney.

NASSAU, BAHAMAS – The CEO of The Bahamas Financial Services Board is anticipating that government’s amendments yesterday to the Commercial Entities (Substance Requirements) Act will further satisfy the European Commission and get The Bahamas off its deficient list.

Speaking with Eyewitness Business, BFSB chief Tanya McCartney said government had been actively engaged with the financial services community in recent days to ensure the amendments made to the Substance Requirements legislation passed last year would mitigate any form of adverse listing for this jurisdiction.

“The Prime Minister, the Attorney General and the Minister of Financial services met with senior officials from all financial institutions on Monday to indicate that this amendment was in furtherance of our commitment to improving what the European Union added as substance issues in our legislation,” she said. “We have accepted this is the standard that will be required of all International Financial Centers, so we’re not alone in having to implement these measures.”

Her comments came as the EU Commission moved The Bahamas yesterday from compliant to a list of countries it deemed non-cooperative in Anti-Money Laundering and Countering Financing of Terror (AML/CFT).

The listing caught many in the industry by surprise, given that it countered a recent compliant categorization by the very same EU Commission.

In response, Attorney General Carl Bethel said The Bahamas ‘ought not to have been listed’ and that his office regrets this action by the EU College of Commissioners. He also pledged to seek all ways to ameliorate and, if possible, encourage the EU Commissioners to reverse their decision.

McCartney said the government was indeed active in fine-tuning the amendments.

“We have to comply with the terms set out by the EU Code of Conduct Group because failure to comply will have us on the list of non-compliance,” she added. “We support the government’s efforts to mitigate any form of adverse listing for this jurisdiction and we hope this satisfies what the EU requires of us.

“They have been very much engaged with industry throughout the entire process as we continue to demonstrate our commitment to addressing the concerns they have highlighted over the last several years.”

Indeed, much of the concerns in the past that were centred around tax transparency have been resolved in recent years.

Highlighted in yesterday’s amended Commercial Entities Bill are stipulations that IFC reporting take place within nine months of the fiscal year and that any entity claiming to have tax residence in a jurisdiction outside of The Bahamas report on its compliance in accordance to the act within the nine-month timeline. Added to that, the entities must also show in its annual report that it is registered and compliant with tax laws in the jurisdiction that it resides, among other amendments to the Act tabled Wednesday.