International Issues

Industry News, International Issues, Tax Co-operation

OECD Provides AEOI Update – Over 1300 Bilateral Automatic Exchange Relationships in Place

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The OECD today reports that a further 350 bilateral automatic exchange relationships have been established between over 50 jurisdictions committed to exchanging information automatically, pursuant to the OECD [Common Reporting Standard](http://www.oecd.org/tax/automatic-exchange/common-reporting-standard/) (CRS), starting in 2017. Two more rounds of activations are scheduled to take place in March and June 2017, which will allow the remaining 2017 and 2018 jurisdictions to nominate the partners with which they will undertake automatic exchanges in the coming months. The next update on the latest bilateral exchange relationships will be published before the end of March 2017, with updates to follow on a periodic basis. [OECD Release](http://www.oecd.org/ctp/exchange-of-tax-information/over-1300-relationships-now-in-place-to-automatically-exchange-information-between-tax-authorities.htm) [Full List of Automatic Exchange Relationships](http://www.oecd.org/tax/automatic-exchange/international-framework-for-the-crs/exchange-relationships/)

Industry News, International Issues, Tax Co-operation

BEPS Action 4 Report to Curb International Tax Avoidance

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The OECD has released an updated version of the 2015 BEPS Action 4 Report, which includes further guidance on two areas: the design and operation of the group ratio rule, and approaches to deal with risks posed by the banking and insurance sectors. [Press Release](http://www.oecd.org/tax/oecd-releases-additional-guidance-on-action-4-of-the-beps-action-plan-to-curb-international-tax-avoidance.htm?utm_source=Adestra&utm_medium=email&utm_content=Read%20the%20press%20release&utm_campaign=Tax%20News%20Alert%2022-12-2016&utm_term=demo) [Report](http://www.oecd.org/tax/beps/limiting-base-erosion-involving-interest-deductions-and-other-financial-payments-action-4-2016-update-9789264268333-en.htm?utm_source=Adestra&utm_medium=email&utm_content=Access%20the%20report&utm_campaign=Tax%20News%20Alert%2022-12-2016&utm_term=demo)

Business, Industry News, International Issues, Legal, Tax Co-operation, The Economy

The Bahamas Makes Progress in the Implementation of CRS

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Minister of Financial Services the Hon. C.V. Hope Strachan reported today that [the Bill](https://bfsb-bahamas.com/news.php?cmd=view&id=3694&pre=y) to provide for the implementation of the Common Standard on Reporting and Due Diligence for Financial Account Information in Tax matters and for connected purposes now has been passed unanimously in both Houses of Parliament. A release from the Ministry notes that the passage of this legislation *”evidences The Bahamas’ commitment to implement the OECD’s Common Reporting Standard (CRS) for the Automatic Exchange of Financial Information in 2018. The Bill sets out the requisite legal framework to begin the process for the automatic exchange which is mandated to take place on an annual basis.”* The legislation confers the necessary powers on the Competent Authority to enter into Agreements with the government of another country for the automatic exchange of financial account information in tax matters. It also ensures the proper administration and enforcement of the Act. Minister Strachan said that proactive steps have been taken already to identify the countries that The Bahamas intends to negotiate with on bilateral agreements for the automatic exchange of information. An initial group of countries has been prioritized – following consultation between The Ministry of Finance as the Competent Authority, The Office of the Attorney General, The Ministry of Financial Services, The Bahamas Financial Services Board and industry stakeholders. The Ministry of Financial Services has pledged to keep the Bahamian public and all relevant stakeholders advised as the country progresses with the implementation of CRS. *”Moreover, The Bahamas will continue to strive towards meeting international standards of tax cooperation and transparency to preserve The Bahamas’ reputation as a compliant financial services jurisdiction and a financial centre of excellence,”* the release confirmed. MoFS Official Release – See pdf below

AML, Industry News, International Issues

EU Council on Money Laundering and Terrorist Financing

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The Council has agreed its negotiating stance on strengthened EU rules to prevent money laundering and terrorist financing. Today the Permanent Representatives Committee, on behalf of the Council, asked the incoming presidency to start talks with the European Parliament. The draft directive pursues two main objectives: (a) preventing the financial system being used for the funding of criminal activities; and (b) strengthening transparency rules to prevent the large-scale concealment of funds. It is aimed at closing down the financial means of criminals without creating unnecessary obstacles to the functioning of payment systems and financial markets. The text amends directive 2015/849, adopted in May 2015. [December 2016 draft directive on the prevention of money laundering and terrorist financing](http://data.consilium.europa.eu/doc/document/ST-15605-2016-INIT/en/pdf) [Statements accompanying December 2016 draft directive on the prevention of money laundering ](http://data.consilium.europa.eu/doc/document/ST-15615-2016-ADD-1/en/pdf) [Full EU Council Release with Links](http://www.consilium.europa.eu/en/press/press-releases/2016/12/20-money-laundering-and-terrorist-financing/?utm_source=dsms-auto&utm_medium=email&utm_campaign=Money+laundering+and+terrorist+financing%3a+Council+agrees+its+negotiating+stance)

Business, Industry News, International Issues, The Economy

FSB On Decline in Correspondent Banking

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The Financial Stability Board (FSB) has released its latest progress report on the implementation of its four-point action to assess and address the decline in correspondence banking. The progress report includes a set of deliverables for 2017 to implement the action plan, and describes progress in taking forward the plan: * Further examining the dimensions of the problem, and its causes and effects; * Clarifying regulatory expectations, as a matter of priority, including through guidance by the Financial Action Task Force (FATF); * Domestic capacity-building in jurisdictions that are home to affected respondent banks; * Strengthening tools for due diligence by correspondent banks. Alexander Karrer, Chair of the CBCG and Deputy State Secretary at the Swiss Federal Department of Finance said: *”A well-functioning correspondent banking system is essential for ensuring international payments. A decline in correspondent banking relationships can adversely affect growth, financial inclusion, remittances flows as well as the stability and integrity of the global financial system. Since the creation of the CBCG earlier this year, good progress has been made to assess and address this issue, but additional steps are needed to move from awareness raising to action. Given the number of actors involved, international cooperation and coordination are key.”* A further progress report on the work of the CBCG will be published in advance of the G20 Leaders’ Summit in Hamburg in July 2017. [FSB Release](http://www.fsb.org/2016/12/fsb-publishes-progress-report-and-2017-workplan-to-assess-and-address-the-decline-in-correspondent-banking/) [Progress Report](http://www.fsb.org/wp-content/uploads/FSB-action-plan-to-assess-and-address-the-decline-in-correspondent-banking.pdf)

Industry News, International Issues, Tax Co-operation

Monaco Ratifies The Convention on Mutual Administrative Assistance in Tax Matters

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Today Monaco deposited its instrument of ratification for the [Convention on Mutual Administrative Assistance in Tax Matters](http://www.oecd.org/tax/exchange-of-tax-information/convention-on-mutual-administrative-assistance-in-tax-matters.htm), underling its commitment to fight tax evasion and avoidance. It is another important step taken in implementing the Standard for Automatic Exchange of Financial Account Information in Tax Matters developed by the OECD and G20 countries, as well as automatic exchange of Country-by-Country Reports under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project. Monaco has committed to implement automatic exchange of financial account information in time to commence exchanges in 2018. It was amongst the first signatories of the [CRS Multilateral Competent Authority Agreement](http://www.oecd.org/tax/automatic-exchange/international-framework-for-the-crs/) (the “CRS MCAA”) and the [Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports](http://www.oecd.org/tax/exchange-of-tax-information/cbc-mcaa.pdf) (the “CbC MCAA”), which are both based on Article 6 of the Convention. The Convention will enter into force for Monaco on 1 April 2017. [OECD Release](http://www.oecd.org/tax/monaco-strengthens-international-tax-co-operation-ratifies-the-convention-on-mutual-administrative-assistance-in-tax-matters.htm?utm_source=Adestra&utm_medium=email&utm_content=Monaco%20strengthens%20international%20tax%20co-operation%20%E2%80%93%20ratifies%20the%20Convention%20on%20Mutual%20Administrative&utm_campaign=Tax%20News%20Alert%2014-12-2016&utm_term=demo)

AML, Industry News, International Issues, Legal

Equipping Lawyers in Fight Against Corruption

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The OECD has joined forces with the [International Bar Association](http://www.ibanet.org/) (IBA) to form a task force to develop professional conduct standards and practice guidance for lawyers involved in establishing and advising on international commercial structures and recommended actions for governments. The OECD-IBA Task Force on The Role of Lawyers and International Commercial Structures is expected to be a key component in the global fight against corruption. It will work to develop appropriate guidance with respect to forming international commercial structures, while ensuring that confidence in both the lawyers’ role and the core principles of the legal profession are preserved. According to the OECD, in completing legal transactions for their clients, lawyers may knowingly or unwittingly assist clients in asset concealment or money laundering. International standards, such as the Recommendations of the Financial Action Task Force (FATF), already provide a framework for conducting due diligence on customers and identifying the beneficial owner. However, countries’ implementation of these standards has been variable. OECD Director for Legal Affairs Nicola Bonucci says, *”Lawyers play a key role in our societies and the best way to ensure that they can continue to fulfil such a role is to work together on the design of good professional standards which can be used by all lawyers irrespective of their countries of origin or operation. Mere formal respect of the law is a necessary but not always sufficient condition and experts from the OECD and from the IBA will confront their point of view and work together in order to ensure that these professional standards meet the expectations of the various stakeholders. This pioneering work will not substitute or conflict with existing international and national requirements and will complement other ongoing OECD work on the role of tax intermediaries.”* And IBA President David W. Rivkin commented, *”It is undeniable that lawyers must play a central role in complex offshore financial transactions. To ensure that they do not unwittingly facilitate economic crime, it is imperative that lawyers ask the right questions of their clients, vet them sufficiently, understand who are to be the ultimate beneficiaries of their client’s actions, and have an understanding of sovereign laws. In practice, inevitably complications arise. For example, what are a law firm’s obligations when conflicting sovereign laws apply in cross-border transactions? Recent events have shown that existing international and professional standards may not provide sufficiently clear guidance to lawyers who handle such transactions. Recent actions also present the danger that in their anti-corruption activities, governments may ignore the need for lawyers to advise their clients in confidence. For this reason, the IBA has partnered with the foremost inter-governmental organisation analysing and promoting economic policies, the OECD, to create appropriate standards while, at the same time, respect the fundamental rules applicable to the profession that are a key element of the rule of law. Each organisation will bring its relevant expertise to the project.”* [OECD Release](http://www.oecd.org/newsroom/oecd-and-iba-join-forces-to-develop-practice-guidance-to-equip-lawyers-in-fight-against-corruption.htm) [IBA Release](http://www.ibanet.org/Article/NewDetail.aspx?ArticleUid=f549d8eb-2036-423c-b4d1-9f565ee6e8b1)

Business, International Issues, The Economy

IMF Mission Concludes Visit to The Bahamas

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An International Monetary Fund (IMF) team led by Jarkko Turunen visited The Bahamas from December 7-13, 2016, to update the economic and financial outlook following Hurricane Matthew. The team reports that despite significant damage by Hurricane Matthew, growth is expected to resume next year, supported by construction activity and work toward completion of Baha Mar resort. Also noted was that (a) further fiscal consolidation, including more determined efforts to rationalize spending, remains critical for rebuilding fiscal and external buffers; and (b) high unemployment and the high volume of non-performing loans continues to dampen private sector credit and economic activity. Mr. Turunen issued an [official statement](http://www.imf.org/en/News/Articles/2016/12/13/PR16557-The-Bahamas-IMF-Mission-Concludes-Visit) at the conclusion of the mission. While in The Bahamas , the mission met with the Honorable Michael Halkitis, Minister of State for Finance, Mr. John Rolle, Governor of the Central Bank of The Bahamas, other senior government officials and representatives of the private sector.

Business, Industry News, International Issues, The Economy

FSB Regional Consultative Group for the Americas Meets in Nassau

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The Financial Stability Board (FSB) Regional Consultative Group (RCG) for the Americas met in Nassau today at a meeting hosted by the Central Bank of The Bahamas. At their meeting, members of the FSB RCG for the Americas began by reviewing the FSB’s Work Plan and policy priorities for 2017. In particular, the group discussed the FSB work on implementation and effects of the G20 financial reforms. The RCG discussed the findings of the second annual report for G20 Leaders on the implementation and effects of reforms published by the FSB in August 2016. Members of the group discussed regional macroeconomic and financial market developments, and key financial stability issues in the region, including possible policy responses to these developments. A discussion took place on the impact of the low interest rate environment on financial stability, including the impact on bank profitability and possible spillovers for emerging market and developing economies. The group next discussed developments in fintech including the implications of distributed ledger technology and peer-to-peer lending and relevant developments in the insurance industry. The group considered the benefits these developments could provide in terms of deepening access to financial services and promoting financial inclusion. However, they also discussed possible risks that could emerge from fintech developments and potential issues for authorities. The RCG discussed the FSB’s action plan to assess and address the withdrawal of correspondent banking services. In particular the group considered the impact of reductions in correspondent banking relationships in the Americas and a proposal for the RCG to establish a new working group on the broader issues of “de-risking” in some parts of the region. The group received an update on the work of the RCG working group on shadow banking. The working group will publish a report in the coming months and is discussing its workplan for 2017. The group also discussed work on long-term investment financing in the region. The FSB RCG for the Americas is co-chaired by Carolyn Wilkins, Senior Deputy Governor, Bank of Canada and DeLisle Worrell, Governor, Central Bank of Barbados. Membership includes financial authorities from Argentina, Bahamas, Barbados, Bermuda, Bolivia, Brazil, British Virgin Islands, Canada, Cayman Islands, Chile, Colombia, Costa Rica, Guatemala, Jamaica, Mexico, Panama, Paraguay, Peru, Uruguay and the United States of America. ##About the FSB## The FSB has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts. Through its six Regional Consultative Groups, the FSB conducts outreach with and receives input from an additional approximately 65 jurisdictions. The FSB is chaired by Mark Carney, Governor of the Bank of England. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements. The FSB has six Regional Consultative Groups, established under the FSB Charter, to bring together financial authorities from FSB member and non-member countries to exchange views on vulnerabilities affecting financial systems and on initiatives to promote financial stability.

Industry News, International Issues, Tax Co-operation

Global Tax Transparency Summit Backs Push for Greater Transparency

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Twenty-six Parliamentarians have now signed a concordat calling on governments to support greater tax transparency by multinational companies. The signatories were in London for today’s [Global Tax Transparency Summit](http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/taxation/global-tax-summit-16-17/), hosted by the Committee of Public Accounts and attended by delegates from jurisdictions with a combined population of more than two billion people. The Parliamentarians agreed that future work should explore: * VAT; taxation and high net worth individuals in sport and entertainment * Further work on tax transparency, focusing on those who advise and facilitate companies and individuals * Holding a follow-up conference in Canada in 2017, the 150th anniversary of Canadian Confederation * Broadening the umbrella of Parliamentarians and other stakeholders scrutinising tax collaboratively * Collaborating in real-time on coordinated work across Parliaments Delegates also took part in four plenary sessions examining global tax transparency, action to combat tax avoidance, efforts to drive change in the international tax system and the impact of tax avoidance on the developing world. [Commons Select Committee Release](http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news-parliament-2015/global-tax-summit-summary-16-17/) [Parliamentarians sign concordat on greater transparency for international tax system](http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news-parliament-2015/global-tax-summit-concordat-16-17/)

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