Barry J. Malcolm, Executive Director of the Bahamas Financial Services Board, has characterised the action of various international institutions as being “aggressive” –primarily because the process of listing The Bahamas did not sufficiently consider actions already in progress to address many of the concerns that were the subject of their criticisms. Such significant acts of aggression should not be left unchallenged.
The BFSB Executive pointed out that one would have expected the international bodies involved to have initiated in depth, bilateral discussion and closer evaluation of what The Bahamas was really doing by way of response to various concerns. Instead, unilateral evaluations and pronouncements were made. The Bahamas has earned the right to the consideration of having powerful, developed nations – which profess to observe and prescribe to best standards for the financial services sector – “sit down with us to address differences in a spirit of cooperation and fair play for the benefit of global progress”, according to Mr. Malcolm.
His remarks came during a Panel Discussion on the Implications of the OECD and Other Initiatives at the September 19-20 Offshore Finance seminar hosted in Washington, D.C. by Caribbean/Latin American Action. He pointed out to the international audience that by the end of the year The Bahamas would have made significant responses to all relevant issues, in a manner which should eliminate the concerns precipitating these initiatives.
The 2-day programme was hosted at The Brookings Institution under the general theme of “The State of Offshore Finance in the Caribbean and Latin American Regions: Challenges and Implications”. Presentations and floor discussions included substantial expressions of concern with respect to the actions of the OECD in particular. The Bahamas has been included in a list of 35 financial centres identified by the OECD as having “harmful tax competition” — in reality, centres which it felt unfairly deprived members of income tax revenue. From his interaction with delegates participating in the Seminar, Mr. Malcolm observed strong pockets of support in the international community for The Bahamas — still widely recognised as a reputable and viable financial centre.
The Bahamas Financial Services Board has spearheaded an industry-wide initiative to assist The Government of The Bahamas in responding to issues raised by the OECD, Financial Action Task Force, US Treasury Department, and the Financial Stability Forum. The Strategic Development Committee also is charged with developing long-term strategy for enhancing the competitive advantages of The Bahamas as an international financial centre, while adhering to international best practice standards.
Currently, Bahamas Prime Minister Hubert Ingraham is on a 4-week mission to Europe, meeting with representatives of the G-7 countries. The Prime Minister has indicated the delegation’s intent to establish a clear understanding of what is required of The Bahamas to be removed from the OECD’s 35-strong list. Understanding what the OECD and its affiliates are demanding should enable The Bahamas to determine whether the legislative and administrative changes already being implemented will secure its removal from the “harmful tax” list. Likewise, discussions with the FATF should enable the Government to assess what needs to be done to strengthen the nation’s financial laws and remove any perceptions of non-cooperation in the fight against money laundering.