The Role Of BFSB In The 21st Century
It is no longer business as usual. Not only do the old rules no longer apply, but also the time that “new environments” are introduced is greatly diminished.
The Bahamas has been the subject of three supranational initiatives: the OECD and its harmful tax initiative, the FATF’s review of the level of co-operation afforded by nations in their anti-money laundering efforts, and the FSF’s evaluation of the regulatory systems of Offshore Financial Centers. The legislation that we as an industry are currently digesting was primarily in response to the FATF and FSF initiatives. The various Acts and related regulations seek to ensure that The Bahamas has in place a comprehensive system by which it can (1) prevent the commission or facilitation of money laundering through its financial systems (2) detect and construct an audit trail where money laundering may occur and, (3) assist other nations in their counter money laundering efforts. This would be achieved primarily through the consistent application by the industry to an agreed upon standard of the “Know Your Customer” policy, and increased reporting requirements. It is these reporting requirements that have brought about a review of what was previously considered a cornerstone of our industry – Bank Secrecy.
Globalization and the advancement in technology have caused nations to become interdependent and exposed to weaknesses in the regulatory oversight and counter money laundering procedures of other nations. Consequently, the mandate of FATF and FSF cannot be ignored or wished away on the basis of our independence IF we wish to be a serious contender in the provision of international services. The need for transparency in the global market place has promulgated this key paradigm shift in the Bahamas: a shift from Secrecy to Confidentiality. How does our jurisdiction survive in this new paradigm? I believe our success will depend on our ability as a jurisdiction to compete in terms of the quality of our services and the strength and sustainability of our products. This level of competition must not only exist at companies level but at a jurisdiction or “Bahamas Inc” level.
Our ability to compete as a jurisdiction is the focus of the Bahamas Financial Services Board. BFSB’s mandate is to develop the international financial services in the Bahamas by acting as a catalyst to cause all industry participants to lever their resources to first develop and, secondly, promote the Bahamas.
Development of the Industry
One of the most important decisions made by our potential clients and partners is that of “jurisdiction selection”. Specific initiatives have been formulated by the Bahamas Financial Services Board to draw on the collective intelligence of our stakeholders. Certain initiatives undertaken by the Bahamas Financial Services Board directly in response to the new environment have included the establishment of the Strategic Development and the Standards & Practices Committees. These committees are responsible for developing products and formulating international best practice standards. Following on from this, the Bahamas Financial Services Board will hold Industry Roundtables to provoke further thought and consensus on key strategies, services and standards for our industry. The conclusion of these roundtables will be the formulation by BFSB of a mid to long-term strategy for “Bahamas Inc.”
Of utmost importance in the development of our jurisdiction is the strengthening of the human resources of the Bahamas. While our location, improvements being made in our telecommunication infrastructure, and the strengthening of our legislative framework are critical to our success as a country, the full deployment of our human resources has the potential to give the Bahamas a distinct and definitive competitive advantage. We are all proud that the Bahamas has a well-educated population comprised of some 600 lawyers, 350 accountants and a growing number of chartered financial analysts. However, I would contend that we must rapidly tool and, in some cases, retool all of our human resources to understand the new environment and to compete on an international level in the 21st century.
This mandate crosses all boundaries and calls for close partnership of the Bahamas Financial Services Board, industry associations, corporate citizens and, most importantly, each participant of the industry. We must take ownership for our own destiny by taking deliberate steps; these steps should result in the embodiment by all participants of the attributes necessary to compete in the global market place.
As we make strides in truly becoming “the” jurisdiction of choice, the more fruitful our promotion of international services will become. With continued focus on our commitment to providing service levels that compete with any jurisdiction and the provision of international services in a well-regulated environment, The Bahamas has the opportunity to reassert itself as a leader in international financial services.
The Bahamas Financial Services Board’s programs will focus on bringing the Gatekeepers to the Bahamas through conferences and other programs so that they can become comfortable that The Bahamas is serious about the business of international services and that we are indeed prepared to conduct business in an environment of transparency.
Notwithstanding our disappointment or even our disagreement that the Bahamas was blacklisted, we must focus on the how we can use this watershed in our history to show the ability of the Bahamian people and Bahamian based enterprise to adapt, to convert this threat into an opportunity, an opportunity to develop sustainable products and provide responsive and expert services to an increasingly discriminating international clientele.
(Extract from a Presentation by BFSB CEO/Executive Director Wendy C. Warren at an industry briefing sponsored by McKinney, Bancroft & Hughes)