By NATARIO McKENZIE
THE Attorney General yesterday lamented that "riding behind our competitors" had caused "incalculable" damage to the financial services industry, accusing the former government of failing to act on tax information exchange changes.
Carl Bethel QC, addressing the Senate, said the Christie administration had "done nothing' for three years in relation to the OECD's Common Reporting Standard (CRS), which has become the global benchmark for automatic tax information exchange.
Underscoring the need to "revitalise" the financial services sector, Mr Bethel said the Bahamas had been left exposed to sanctions and reputational damage because the former government had failed to execute this nation's commitment to exchanging information via a bilateral approach.
Mr Bethel said: "I am informed reliably by those on the other side of the negotiating table that, for three years, the Government did nothing. We had to repair the reputational damage and the threatened sanctions because the PLP did nothing in the eyes of the OECD for three years after having gotten a bilateral commitment from them.
"It is absolutely unacceptable the condition in which the Bahamas was left by the former government; exposed and threatened on every side. We have been addressing these threats."
The Bahamas had 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 steadily increased 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 was left further exposed by the decisions of Hong Kong, Panama and the United Arab Emirates to switch from the bilateral to multilateral approach, and the Government has now taken a policy decision to implement CRS by way of the Multilateral Convention on the Mutual Administrative Assistance in Tax Matters (Multilateral Convention) on a non-reciprocal basis.
Mr Bethel said that, as a result, the Bahamas must "embrace new regulatory disciplines", maintain full compliance with its international obligations and set the pace.
"The tradition of riding behind our competitors has caused incalculable reputational damage to our financial sector. It has led to 'black' or 'grey' list threats or listings. It has cased some degree of loss of correspondent banking relations due to the naming and shaming of the Bahamas, and the offshore pressure to stop banking in risky jurisdictions," said Mr Bethel.
"We have to repair reputational damage and have the political will to address the problem; to clean up any perceptions of any failings that may be out there about the Bahamas."