By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Minister of Financial Services yesterday said warding off the threatened ‘blacklisting’ of the Bahamas was “10.5 on a one to 10 priority scale” for the newly-elected government.
Brent Symonette, whose portfolio also includes trade and industry, and immigration, told Tribune Business that Dr Hubert Minnis’s administration would determine the Bahamas’ approach to automatic tax information exchange within the necessary timelines.
He added that the Government was set to meet with the financial services industry today to get its feedback on the way forward, amid increasing pressure from the Organisation for Economic Co-Operation and Development (OECD) and a threatened ‘blacklisting’ by the European Union (EU).
“We’re meeting with the financial services people tomorrow [today] to discuss it, and we will be able to take a position in very short order and identify it to the public,” Mr Symonette told Tribune Business.
He acknowledged that the Bahamas had a “very tight” window in which to determine its approach for implementing the Common Reporting Standard (CRS), the global standard for implementing the automatic exchange of tax information, and seemingly criticised the Christie administration for leaving the matter to the new government.
“There is a deadline attached, and the Government intends to have a decision made within that deadline,” Mr Symonette said. “The deadline is very tight, and it’s something the previous government left to us to take a decision on.
“As soon as possible, we will take a decision. We have a deadline, and it is a priority. If you want to put it on a scale of one to 10, it’s 10.5.”
The Bahamas has until September 2018 to meet its automatic tax information exchange commitments, but it needs to be seen as making good progress on this soon, or otherwise this nation is likely to end up on the EU’s threatened ‘blacklist’ of non-cooperative countries that is due for publication by year-end 2017.
Mr Symonette said the ‘blacklisting’ threat, which has been played up by OECD officials in a bid to pressure the Bahamas to switch its CRS implementation approach to a multilateral method, as opposed to bilateral, was something the Government is taking seriously.
While the impending 2017-2018 Budget was taking up much of the new administration’s time, Mr Symonette said all relevant ministries and officials were working on the Bahamas’ CRS position.
As revealed by Tribune Business, the Bahamas is now isolated, and under growing pressure, to bow to international demands that it automatically exchange tax information on a ‘multilateral’ basis, with the EU and its members refusing to accept this nation’s preferred approach.
The Bahamas previously agreed to implement the CRS via a bilateral approach that involved negotiating agreements on an individual country-by country basis.
However, the OECD and its developed country members have been steadily increasing the pressure on the Bahamas to switch to the ‘multilateral’ approach, requiring this country to negotiate tax deals with all-comers at once.
The Bahamas has been left exposed by the decisions of Hong Kong, Panama and the United Arab Emirates to switch from the bilateral to multilateral approach, which has left this nation as the last international financial centre (IFC) of significance that is sticking to the former.
Given that it had previously approved the ‘bilateral’ route as an option, the OECD knows it is open to charges of ‘hypocrisy’ and ‘goal-post moving’ if it simply demands the Bahamas goes multilateral.
Instead, its officials are arguing that the Bahamas has left it too late to use the bilateral approach to meet its automatic tax information exchange commitments by the September 2018 deadline.
OECD representatives have employed the analogy of a high-rise building to describe the Bahamas’ situation, saying that all other countries were taking the elevator to the top via the multilateral approach, and this country was the only one using the stairs.
Monica Bhatia, who leads the OECD’s Global Forum secretariat, said the Bahamas was perceived as “the last tax haven standing” and an “outlier” because it was the sole financial centre of any significance to persist with the bilateral approach to CRS implementation.
Several financial industry sources, speaking on condition of anonymity, told Tribune Business that given the EU’s stance and the pressing compliance deadline, combined with this nation’s bilateral ‘isolation’, the Bahamas was unlikely to be able to “hold out”.
Tanya McCartney, the Bahamas Financial Services Board’s (BFSB) chief executive, told Tribune Business previously that the private sector acknowledged the Government may “have to consider a policy change” on how this nation implements the CRS.
She added that there is “no alarm” about this nation having to alter its approach, and emphasised that the Bahamian financial services industry’s priority was to avoid any ‘blacklisting’.
Comments
killemwitdakno 6 years, 11 months ago
The position is go ahead and blacklist us , we'll then briefly join WTO if we really have to to then sue their ass , then promptly leave WTO which may cause others to follow. And we'll make a loud statement that the blacklist is retaliation for seeking slave reparations.
Are they going to compensate for killing the market like they're forcing Britain to do? They can have Britain pay us the $100B instead....as a start.
Base erosion prevention is all because Merkel is mad the British Islands had more in their market than Germany.
What happened to Turnquest prioritizing having foreign entities support local ones with the Small and Medium Business Act?
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Well_mudda_take_sic 6 years, 11 months ago
All of this never ending blacklisting after black listing after blacklisting is tantamount to the unlawful imposition of economic sanctions against the Bahamas by elitist organizations that have a deceitfully hideous self-serving agenda aimed at creating a New World Order to fulfill the ambition of global rule. The blacklisting is designed to mercilessly cripple our smaller (defenseless) developing nation so that other much larger developed nations (like the OECD countries) can much more easily exploit for themselves (and at much less cost to themselves) our natural resources, including our utility enterprises. Already the blacklisters have moved from our shores to their shores, and within their own borders, much of the very lucrative and thriving offshore financial business that we enjoyed prior to the 1990s. Successive Bahamian governments and the brightest minds in our legal and banking communities have just stood by and allowed this nonsense to continue. From the late 1980's we have allowed ourselves to be wrongfully labelled as facilitating foreign nationals to evade payment of the taxes they owe in their home countries. But as a tax friendly jurisdiction of our own sovereign choosing, we have never had, nor should we ever be expected to have, a duty to help police and protect the tax base of other countries at our expense. All of this foolishness was absurd from the outset. As the OECD countries increase the tax burden on their citizenry to unreasonable levels, they force an increase in our burden and expense of policing and protecting their unreasonably high tax bases. The blacklisters and the international lending agencies are working together to turn the Bahamas into a high taxing jurisdiction so that they can then claim their so called hideous exchange of tax information agreements have validity through reciprocity, i.e. they will in turn help the Bahamas police and protect its own tax base. But all of this blacklisting foolishness is nothing but an effort to disguise the blacklisters' true agenda, which is the wrongful stealing of our financial services economy and our other natural resources for their own benefit to the detriment of the standard of living and quality of life of all Bahamians.
Reality_Check 6 years, 11 months ago
The OECD countries also don't like the idea that we have an exchange control regime with the Bahamian dollar supposedly still pegged at par against the U.S. dollar. They would like nothing more than to see our country destabilized (as a result of their ever increasing burdensome requirements) to the point where our Bahamian dollar is significantly devalued and made to float against the U.S. dollar. This is their ultimate goal which will allow them and their greedy corporate interest groups to acquire our natural resources, utility enterprises, etc. at bargain basement prices, leaving the Bahamian people to be nothing but economic slaves for their new foreign masters!
Socrates 6 years, 11 months ago
all of this shows that really small states although politically independent, in reality have little control in matters the 'big boys' consider important. its their way or the highway. and its not just the Europeans,... note uncle Sam just posted the most recent list of money laundries and (not surprisingly given the heavy chinese presence here), quite naturally we were on that list too..
concerned799 6 years, 11 months ago
If the Bahamas will give in to endless foreign demands, which always seem to become new ones even if you meet the old demands then it is no longer soverign.
Why is it so hard to state the Bahamas Government does not represent the OECD but rather the Bahamian people?
banker 6 years, 11 months ago
Reminds me of Mr. Burns of the Simpsons who invested monies in companies making in buggy whips, gaiters and spats, not realising that the entire world had changed since he made those investments.
Alex_Charles 6 years, 11 months ago
you know, this wouldn't be the case of the Caribbean united as a trade block. I've witnessed 3 caribbean countries get stiff armed by the EU all because they were divided. CARICOM should work like our version of the EU.
concernedcitizen 6 years, 11 months ago
All sounds so good to say FU to the EU and US but how many large investors, Joe Lewis etc ,and small investors like winter residents are going to like their money sitting at a clearing bank in NY for three months every time they do a transaction that involves any of their their Bahamian holdings .Pay bills ,transfer funds ,invest in the NYSE ,buy or sell ,use their credit cards ..try to import a car etc etc etc ,How is Butlers ,Kellys ,Arawak homes going to order goods w/ every money transfer sitting in NY to go through all kind of scrutiny b/c we went rogue
banker 6 years, 11 months ago
Exactly. There is only one game in town, and if you don't play by the rules, you no longer play. Simple.
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