The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Minister of Financial Services yesterday described the industry as a “parody of contradictions”, given that many of the G-20 countries pushing for automatic tax information exchange are the main perpetrators of bank secrecy.

Addressing the second day of the Bahamas Institute of Chartered Accountants (BICA) seminar week, Mrs Strachan said the G-20 wants international financial centres such as the Bahamas out of the business completely.

“The issue for us, then, is to fight back but to do so recognising that the future of our industry does not lie in finding ways around the rules but, to the contrary, finding the best and most efficient and beneficial ways of conforming to the rules,” Mrs Strachan said.

“The financial services industry today is a parody of contradictions. A large number of G-20 countries, which are the main proponents of the automatic exchange of information, are the main perpetrators of secrecy within their own borders.

“For instance, discussions revolve around the extensive business and ownership registry which exists in the state of Delaware, and despite FATCA and its implications for jurisdictions like the Bahamas, when it comes to them conforming to a registry of beneficial ownership, the distinct impression given is that they are not prepared to have it opened to full scrutiny because it is likely to negatively affect their competitive advantage.

“Indeed, in a recent report by The Tax Justice Network, the United States, having imposed FATCA upon the world, has been ranked as number three in the Financial Secrecy Index for 2015.”

Mrs Strachan added: “Notwithstanding the reluctance of the giants to implement the registry of beneficial ownership, there is trepidation within the sector that if successfully implemented in the UK, it will become the rule rather than the exception.

“Of even more significance among industry is the implications that attend the concept of tax evasion as a predicate offence. This will place the obligation upon service providers to implement measures to identify tax cheats, and to report or face criminal penalties themselves.

“This is cause for much consternation and highlights the curious nature and strange imbalance that is occurring between states, as individual territories grapple with the need to maximise tax collection from their citizens to enhance their budget deficits.”

Mrs Strachan noted that despite efforts relative to compliance with international regulatory obligations, this nation has still been slapped with blacklisting by the European Union (EU), for example.

“It begs the question as to whether it will ever be possible to please everyone even if you adhere to all of the rules,” she said.