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Enterprises Bill ‘Could Have Saved’ Financial Services

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Bahamas “could easily have saved the financial services industry” had it introduced the Commercial Enterprises Bill six to eight years ago, a prominent attorney is arguing. Terence Gape, the Dupuch & Turnquest law firm’s managing partner, told Tribune Business that the Bill’s liberalised work permit regime placed the Bahamas “on a path” that its Caribbean international financial centre (IFC) rivals adopted up to 30 years ago.

Describing the legislation as “phenomenal progress” compared to previous bids to reignite the stalled Bahamian economy, Mr Gape argued that the Bill’s critics were attempting “to protect jobs that don’t exist”.

“I think it’s a phenomenal progress from where we’ve been, and finally an acknowledgement that the country needs foreign direct investment,” he told this newspaper of the Minnis administration’s proposed reforms. “This is amazing for the Bahamas.

“If we had pushed for this six to eight years ago, we could easily have saved the financial services industry, which now we need to rebuild. It puts us on a path that has been so successful for the Cayman Islands for the past 30 years, and been so successful in Providenciales (Turks & Caicos) for the past 15 years. Those two places have outstripped us in offering fully employment for their people.”

The Commercial Enterprises Bill, which the Opposition sought to embroil in political controversy through the weekend, will enable a ‘specified commercial enterprise’ to obtain an Investments Board certificate granting it a specific number of work permits for certain positions.

The ‘certificate’, which will initially be issued for one year and can be renewed, would allow key personnel to set up the company’s physical operations in the Bahamas before they obtained a work permit.

Such a permit must be applied for within 30 days of their entry, and the Bill mandates the Director of Immigration to make a decision on approval within 14 days of receiving the application. Should the Director not respond within that timeframe, the work permit is “automatically deemed to have been granted”.

Work permits issued under the Bill’s provisions will be for a three-year period, and are renewable for the same duration. They can only be revoked on grounds of “public safety, public morality or national security”.

Mr Gape said the real “value” of the Commercial Enterprises Bill was that it mandates, by law, that the Immigration Department approve and issue work permits for senior executives, managers and specialist personnel within a clearly defined timeframe.

He suggested that this would provide certainty, and potentially a major confidence boost, to prospective investors in the Bill’s targeted industries who are eyeing the Bahamas.

Pointing out that uncertainty over work permit approvals, and issuance timeframes, is one of the biggest obstacles cited by the private sector, Mr Gape told Tribune Business: “If this was announced as a policy, the Immigration Department would not live up to it.

“The fact it’s in statute is a critical thing. It’s a mandate. The investor would not have taken any comfort in a change in policy, but they’re going to feel extremely enthused because it’s a statute and part of our law.

“The Immigration Department, for the past 50 years, has been able to limit work permits. Their culture has been to limit work permits granted, not realising the negative effects it has on the Bahamas compared to Bermuda, Cayman, BVI, Providenciales and the Dominican Republic, which have far outstripped the Bahamas over the past 20 years in particular.”

The opposition Progressive Liberal Party (PLP) has argued that the Commercial Enterprises Bill, and its ‘fast track’ work permit approvals process, will undermine the concept of ‘Bahamianisation’ by pushing out local workers and expatriates in favour of foreign-owned rivals.

However, Mr Gape echoed Brent Symonette, minister of financial services, trade and industry and Immigration, by arguing that since the Bill’s provisions  applied only to industries that are largely not present in the Bahamas, its opponents are attempting to protect jobs and businesses that do not exist.

“They believe they’re protecting Bahamian jobs when in fact they’re killing the jobs,” he said of the Bill’s critics. “I hope the culture is changed, but it may not happen for 10 years.”

The Government’s decision to push the Commercial Enterprises Bill through without any major public consultation beforehand is an indication of the haste with which it feels it must move to break the Bahamas’ depressing cycle of low-to-no-growth and high unemployment since the 2008-2009 recession.

The Minnis administration’s belief is that the economic ‘status quo’ is not working, as shown by three years of recession between 2013-2015, and a GDP per capita figure that has declined since the turn of the century.

It is now proposing ‘radical surgery’, with the Commercial Enterprises Bill intended to signal that the Bahamas is both ‘open for business’ and serious about improving the ‘ease of doing business’ - in this case, the granting of work permits by Immigration.

This feeds into a wider strategy that appears to be centred on liberalisation and deregulation of the Bahamian economy, via measures such as exchange control relaxation and World Trade Organisation (WTO) membership.

The ‘specified commercial enterprise’ legislation is targeted at specific industries - chiefly foreign exchange earners, and those which have been cited by the Minnis administration as part of its economic growth and diversification strategy.

Financial services leads the way with reinsurance; captive insurance; investment fund administration; arbitration; wealth management; international trade and international arbitrage included in the ‘fast track’ work permit sectors.

Also listed in the Bill are technology-related industries such as computer programming; software design and writing; bioninformatics and analytics; nano technology; and biomedical health facilities.

The Government has targeted Grand Bahama as a technology hub, and the inclusion of ‘boutique health facilities’ on the ‘fast track’ list adds to the focus on health. Data storage and warehousing are also present, as is aviation registration and ‘approved’ aviation maintenance operations - again sectors that have been identified by the Minnis administration as potential growth drivers.

The list is concluded by ‘call centres’ and manufacturing and assembly/logistics businesses.

Comments

birdiestrachan 2 weeks ago

The Financial Service sector was killed when the FNM Government passed the laws to destroy the service. Mr: Gape has conveniently forgotten this. This new Brent Symonnette law is what Gape and the real estate Companies have been agitating for.

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banker 1 week, 5 days ago

Nope. If you had a broader worldview, you would have realised that the financial services sector changed dramatically when a tsunami of several things happened. The first was September 11th, the World Trade Center. Bin Laden was financed in the legal banking system. The second was the John Doe subpoena to the Swiss Banks to name the American customers. The third was FATCA. The fourth was the institution of rigid AML/KYC (Anti Money Laundering / Know Your Customer) revamp. And then the blacklistings by the OECD and FATF was the straw that broke the camel's back. When BNP (French private bank) sold their book of business in the Bahamas, the buyers had to shed over a thousand customers in order to maintain their licences according to the laws of their home countries, because of in the past we accepted dodgy customers without proper AML/KYC. You can't do business anymore in the world without both parties undergoing the vetting. The world has changed, and we didn't change with it.

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birdiestrachan 2 weeks ago

Bahamians are aware that there will be no jobs for them in this bill. The concern is that these people with their pennies and dimes investment will be able to buy bonded cars and duty free purchases it seems unfair. when person like Mr: Gape resents the average Bahamian buying a Japanese car. when lawyers and high end real estate agents are given these same benefits Mr Gape and the real estate agents will be singing a different tune.

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CatIslandBoy 1 week, 6 days ago

Birdie, I really hope you are not from Cat Island. You certainly spew out some nonsense when you get your fingers on the keyboard. You really should butt out of grown folks conversation. Positive input into conversations about the financial industry, the economy, and diversification and liberalization of the marketplace, may just be a little beyond your intellectual ability. You know the saying that talks about "...opening one's mouth and removing all doubt".

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John 1 week, 6 days ago

You would think that Hubert Minnis and his government would use caution and common sense and get more advice and consultation on this bill before rushing to pass it. This along with the proposed changes in the immigration act is dangerous as it futher seeks to erode the assets of being Bahamian and throws the economic doors of the Bahamas and access to Bahamian wide citizenship wide open. Who really is behind this dirty agenda? Who is Hubert Minnis pandering to?

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birdiestrachan 1 week, 6 days ago

They have taken the power from the immigration department. in my view they should call this bill the Brent Symonette and the elite bill. Trickle down effect?. all those who have watched anything trickle down knows how little reaches the bottom.

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Economist 1 week, 6 days ago

Birdie your grade "D-" average continues to shine through.

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birdiestrachan 1 week, 6 days ago

After 14 days consider the work permit approved. Now that is really Dumb. Now for the :"A" Graders what is education? consider this a professor came to a small Island and a Island boy took him in a row boat out to sea. The professor continued to tell the Island boy how very educated he was. The boat for some reason turned over, The professor could not swim. the young boy said "You no swim" What is education? May the good Lord give me wisdom and understanding. Wisdom is always better than just a "A" grade.: It is good to know what to do and when to do it.

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Economist 1 week, 5 days ago

To have wisdom you need understanding, experience and knowledge. If you don't know anything about the rest of the world you do not have the wisdom in the discussion above.

Your lack of knowledge of what is happening outside our country, which has a direct impact on our employment and our economy is loud and clear. God gave you a brain, I suggest that you use it for once.

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banker 1 week, 5 days ago

Cayman Islands approves work permits in 10 days. Edit -- 10 working days which is 14 calendar days.

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Dawes 1 week, 5 days ago

I find people complaining about the 14 days laughable. We want to encourage companies to set up here and we tell them how modern we are and how efficient. Then we say we need months though to do a check on whether you can work here because we are so efficient. That should do the trick in getting them here.

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