Published On:Wednesday, November 18, 2009

By CHESTER ROBARDS

Business Reporter

crobards@tribunemedia.net

A FORENSIC accountant at HLB Galanas Bain yesterday argued that bank statements from the Bahamas and Europe tend to have much more information than those coming out of the US.

John Bain, the firm's forensic partner, responding to claims that the Bahamian financial services industry lacked transparency, cited a Financial Secrecy Index released by the Tax Justice Network (TJN), which showed that the US state of Delaware ranked number one on a list of countries with the most opacity. The Bahamas ranked as number 33, far below bigger 'tax haven' players such as Switzerland, Cayman Islands and Bermuda.

According to TJN, Delaware does not put details of trusts on the public record, does not comply sufficiently with international regulatory requirements, does not require that details like company accounts and beneficial ownership of companies be recorded and available on public records, and has a zero per cent tax rate. It also collects no taxes on foreign income from LLCs (Limited Liability Companies) with at least two partners who are not US residents.

According to Mr Bain, the report found that "the USA (Delaware) offered so little financial transparency it gave it an opacity score of 92".

He said a noted Miami attonrey once remarked that he could pick up a telephone and establish a corporation in Delaware in 20 minutes.

"Davis said the irony of the US and one of its own states topping the list is that 'the United States goes around accusing other countries of being secrecy havens', but even after the move for greater financial transparency in the wake of September 11 'we never put ourselves on the black list'," Mr Bain said.

"While Davis said he has tips for cracking domestic secrecy havens, he doesn't want to 'educate the bad guys' because it's hard enough already to track assets in places like Delaware.

"For example, a primary tool of forensic accountants is bank statements - and those in the US are far more opaque. European bank statements and those from the Bahamas honestly have a lot more information."

The Organisation for Economic Co-Operation and Development, in the wake of the global financial crisis, sought to force all so-called 'tax havens' to adhere to new international laws that would make their businesses more transparent. The US used those 'tax havens' as a scapegoat for the finacial collapse in the US.