Wendy C. Warren
CEO & Executive Director
While the OECD is now accepting a reference to a level playing field in commitments, clarity is still required with respect to whom it applies and when it is applied.
“Whom” must capture our principal competitors. They are the OFCs identified in the 1998 Harmful Tax Report, the OECD member countries and those non-OECD member countries providing cross border services, that have yet to be identified – in particular Hong Kong and Singapore.
As for “When”, in business – timing is everything. It would be entirely unreasonable for the OECD to ask smaller nations to change their business environment before their biggest OECD and non-OECD competitors, such as Delaware, Switzerland and Singapore, have agreed and implemented similar changes. We must be doing the same things at the same time.
Of particular concern is the 12-month implementation plan to which the OECD proposes adherence by committed jurisdictions. This 12-month period would conclude prior to the requirement that OECD member countries come into line with respect to transparency or exchange of information. The OECD report in November does not address this time discrepancy.
The Board is therefore of the view that any commitment should only be given to the OECD with the most robust ” level playing field ” language. This language would be essential to ensure that The Bahamas changes its business environment only when every OECD member country, as well as all non-sanctioned Offshore Financial Centres (OFCs) agree to implement the same initiatives, with the same timelines. The pre-requisite of a level playing field has been the position of The Bahamas since the publication of the OECD’s Report on Harmful Tax Competition in 1998.
Further, the fact that four OECD members dissented from the OECD’s Progress Report reaffirms the view of the Board that The Bahamas should only introduce legislation when equivalent measures and timelines have been adopted by OECD member countries as well as non-sanctioned, non-member jurisdictions providing cross border financial services.
February 25, 2002
For more information:
Bahamas Financial Services Board
(242) 326 7001