By NATARIO McKENZIE
Tribune Business Reporter
The Bahamian financial services sector was yesterday said by an ex-Cabinet minister to be facing another “new frontier”, this time the Organisation for Economic Co-operation and Development’s (OECD) Common Reporting Standard.
Ryan Pinder, head of wealth management and chief legal officer at Deltec Bank & Trust, told a Society of Trust and Estate Practitioners (STEP) Bahamas luncheon that the push for global automatic tax information exchange meant the Bahamas must find ways to operate within the rules and increase its market profile to attract business.
“We don’t make up the rules. We have to figure out how to operate within the rules,” said Mr Pinder.
“We always have to be mindful of the holistic economic development of the Bahamas.
“One thing with respect to economic development is it always requires financial institutions, it always requires a form of investment. That’s a constant whether it’s commercial banking, whether it’s investment banking or private wealth management. Those are all constants, and those are things we do very well as a practical matter.
“I think it’s very important that we look to broaden the economic profile of the Bahamas, its positioning in the global economic marketplace, what can we offer and then ensure that our financial offerings are also in line with that.”
Mr Pinder added: “That may mean expanding into other areas of commercial finance, but we have the ability and capacity to do it. I think it’s important that our mindset for our development of our financial services platform is consistent with our development of our global economic model for the country.”
The Bahamas has chosen to embrace the 2018 start of automatic information exchange by entering into such treaties on a bilateral (country-to-country) basis rather than a multilateral one.
Adopting the latter approach could overwhelm the Bahamas, as it would require this nation to enter into multiple automatic TIEA agreements with different countries simultaneously.
And these nations may include countries that could misuse, or be incapable of protecting, the private financial data belonging to high net worth clients of the Bahamian financial services industry.
These concerns explain why the Bahamas has decided to embrace automatic tax information exchange on a bilateral - not a multilateral - basis.
Mr Pinder yesterday said that unlike FATCA, the US Foreign Accounts Tax Compliance Act, the OECD Common Reporting Standard initiative encompasses numerous countries with different domestic rules and laws.
“It certainly creates a level of complexity that we’re not used to, or many financial centres are used to. I think that’s certainly one of the challenges,” he added.