The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Ministry of Financial Services yesterday suggested that the infamous ‘Panama Papers’ were a “gratuitous attempt” to produce a negative portrayal of the Bahamas as an international financial centre (IFC).

In a statement released yesterday, the Ministry questioned the motives for the Mossack Fonseca leak in light of the International Consortium of Investigative Journalists’ (ICIJ) own disclaimer that there was no suggestion of law breaking or impropriety.

The Bahamas was ranked as the third most popular ‘tax haven’ used by the Panamanian law firm for company incorporations in a data breach that has sent shockwaves through international finance.

“The International Consortium of Investigative Journalists (ICIJ) recently published the names of structures formed in the Bahamas and other international financial centers,” the Ministry said.

“The publication came with a disclaimer which stated: ‘There are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any persons, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly’.”

The Ministry continued: “The question comes to mind as to why publish a list at all? What is the motive? Without more, the leak appears to be a gratuitous attempt to convey a negative impression of the Bahamas as an international financial centre.

“Based on what has transpired thus far since the initial event, it would appear that these leaks will take place intermittently over an extended period of time.

“Any leak of confidential information is unfortunate and potentially damaging. The uncertainty and sustained programme of leaks is that much more serious. That said, it is imperative that companies and the jurisdictions in which they operate ensure that regulatory standards are adhered to, monitored and that they are enforced. 

The Ministry of Financial Services spoke out just as UK prime minister, David Cameron’s, much-trumpeted anti-corruption conference was closing in London.

While there were developments worth noting, it appears the conference produced nothing that should unduly alarm the Bahamas and its financial services ibndustry, although it may signal where the next pressures will come from.

The Bahamas’ IFC rivals, and British overseas dependencies, the Cayman Islands, Jersey and Bermuda, were among 11 countries to sign up to the sharing of beneficial company owner information on a government-to-government basis - much like how the existing tax information exchange sharing works.

However, the British Virgin Islands was not among those agreeing to this. And, crucially, the US (and its individual states such as Delaware and Nevada) also failed to sign up for beneficial ownership information sharing.

Prime Minister Perry Christie recently said the ‘Panama Papers’ episode had further impacted an already-pressured financial services industry in the Bahamas.

Mr Christie added that although the Bahamas had stringent regulations, it was too early to predict what impact the affair will have on international financial centres (IFCs) such as the Bahamas. 

Millions of documents were leaked from Mossack Fonseca to a German news agency, which contacted the International Consortium of Investigative Journalists (ICIJ) to help analyse the data.

Mossack Fonseca is said to have played a major role helping clients use offshore centres. Data from the leaks reveal information about current and former heads of states and relatives/friends of country leaders.