By AVA TURNQUEST
Tribune Chief Reporter
FIVE months after the country’s financial services sector was dragged into the spotlight as a top tax haven in the infamous “Panama Papers”, international watchdogs yesterday unveiled a free online database created from 1.3 million leaked files from the Bahamas’ corporate registry.
The database by the International Consortium of Investigative Journalists (ICIJ) circumvents the local register’s costly retrieval fee and incomplete online registry by providing, for the first time, a publicly searchable forum of the names of directors and some shareholders of more than 175,000 Bahamian companies.
Released in tandem with detailed reporting on the offshore links to high-profile international politicians, including UK Home Secretary Amber Rudd, the latest instalment to the massive Offshore Leaks Database created by the ICIJ has labelled the country as the “Switzerland of the West”.
The reports detail the country’s longstanding struggle with international tax agencies, namely the United States’ Internal Revenue Service and the Organisation for Economic Co-operation and Development (OECD), since the 1930s.
For its part, Gerard Ryle, the director of ICIJ, said: “We see it as a service to the public to make this basic kind of information openly available. There is much evidence to suggest that where you have secrecy in the offshore world you have the potential for wrongdoing. So let’s eliminate the secrecy.”
Administered by the Registrar General’s Department, the Corporate Registry can be consulted in person or via its online registry. However, ICIJ argues that the information available online is often incomplete. The international watchdog also took issue with the $10 retrieval fee per document, pointing out that search fees were discouraged by the international association of company registries.
The ICIJ report read: “Bahamian authorities told ICIJ that the country honours its international obligations and cooperates with international authorities. The Bahamas ‘does not tolerate dirty money,’ authorities said, noting it ‘has in many areas been rated as ‘largely compliant’ with international standards.’
Authorities did not comment on specific cases and defended the Bahamian corporate registry.
“Fees for online registry searches covers the cost and upgrading of the online system,” said authorities, according to the ICIJ.
Regarding the sharing of tax information, authorities said, according to ICIJ: “The Bahamas negotiates in good faith with all appropriate partners of the Global Forum for Transparency and exchange of information for tax purposes, subject to…international confidentiality and data security standards.”
ICIJ maintains that the new data does not specify whether directors named in connection with a Bahamian firm “truly control the company or act as nominees, employees-for-hire who serve as the face of the company but have no involvement in its operations.”
Although ICIJ explicitly states on its website that there is no suggestion of law breaking or impropriety, its reporting noted that “police, detectives and fraud investigators use registries as starting points on the trail of wrongdoing.”
The ICIJ report read: “The data released today involves the basic building blocks of offshore companies: a company’s name, its date of creation, the physical and mailing address in the Bahamas and, in some cases, the company’s directors. At a basic level, this information is crucial to day-to-day commerce.”
The documents were leaked to the same media agency that received the massive ‘Panama Papers’, an exposé that rocked the industry back in April, German newspaper Sueddeutsche Zeitung, and its timeline spans from 1990 to early 2016.
In a statement released last night, Minister of Financial Services Hope Strachan said the country remains committed to the transparency of its corporate registry.
“The data required by law to be maintained in the corporate registry is available to the public,” she said in a statement. “The Bahamas is committed to the Registrar General’s Department transitioning to an entirely online service that meets international standards. This transition commenced in 2016 with the advent of the online companies registry.”
Data protection breach
The data leak has raised serious concerns for not only international clients but also domestic companies and individuals, according to Free National Movement Deputy Leader K Peter Turnquest. He termed the disclosure as a “very serious data protection breach” that demonstrated the hostile international agenda to dismantle the country’s economic base. Against the backdrop of the Baha Mar debacle, and controversial stop prosecution orders issued by the Office of the Attorney General, Mr Turnquest said the latest breach of data security gave Prime Minister Perry Christie reasonable cause to reconsider the present ministerial appointments.
Mr Turnquest, the opposition’s shadow minister for finance, also sought to draw a parallel between the breach and the controversial Save the Bays email leak by Marathon MP Jerome Fitzgerald, arguing that the government would be hypocritical to condemn the Bahamas leaks but condone Mr Fitzgerald’s actions.
“This is very serious and the Attorney General (Allyson Maynard-Gibson) must respond to the threat and advise what steps have been taken to determine if in fact there has been a breach,” he said, “how extensive the problem has been, what information has been illegally accessed, any legal implications to the jurisdiction, have clients been notified of the breach and advised of steps to protect themselves from financial, legal and personal risk, was an IT audit done, has the exposure access points been closed, have other data access points been reinforced and data security and protection been addressed?”
“We would all recall that it was a very recalcitrant Minister of the government (Mr Fitzgerald) who just this week indicated rather arrogantly and belligerently that he would leak private information coming into his possession from undisclosed sources again in similar circumstances. He was speaking about a similar alleged breach of confidential information that highlighted the serious damage that has been done to this sensitive financial services industry.
“We wonder if he has yet realised the danger of his actions and careless speech,” he added.
Topping international reports yesterday was the revelation that UK Home Secretary Amber Rudd served as a director of Bahamian firms Advanced Asset Allocation Fund and Advanced Asset Allocation Management between 1998 and 2000. While there is no suggestion that Ms Rudd used the companies to avoid tax, British newspapers yesterday were quick to point out that Ms Rudd was silent on her own involvement in offshore investment funds when she defended former UK Prime Minister David Cameron whose father was named in the Panama Papers.
Another high-profile link unearthed from the leak is to former European Union Commissioner for Competition Policy Neelie Kroes. Ms Kroes, a Dutch politician, served in the high-ranking post from 2004-2010, but never disclosed that she had been a director of a Bahamian company from 2000 until 2009.
Ms Rudd became an MP in 2010, and according to ICIJ, her lawyers have explained that she did not declare her directorship of the company because it was never operational, and blamed the listing on a clerical oversight that was not corrected.
In a report published by UK news site The Guardian on the “Bahamas Leaks”, one tax expert branded the country as the number one tax haven.
Mark Morris, an adviser to the European parliament and the Tax Justice Network, said: “They are going round the world saying ‘bring your untaxed money to us.’ People send money to Nassau by the billions because they know it’s safe. Even compared to Switzerland, the Bahamas is now the number one tax haven.”