By NEIL HARTNELL
Tribune Business Editor
The deputy prime minister yesterday voiced his "total disgust" over France's decision to blacklist The Bahamas as he blasted the "devious" way in which it had been implemented.
Confirming that Paris had formally notified the Minnis administration of its decision yesterday morning, K Peter Turnquest slammed its "surreptitious" decision as "an affront" to international diplomatic norms and the relationship this nation had sought to build with France.
He added that The Bahamas' inclusion on France's list of countries deemed non-cooperative in the fight against tax-related crimes stemmed from "the perception by the French authorities" that this nation "has not been responding to requests for information in a manner that is satisfactory to them".
Mr Turnquest did not say whether it was the speed or content of responses to French requests on their citizens/companies via the Tax Information Exchange Agreement (TIEA) between the two countries that had troubled Paris, other than it felt "our response was not sufficient".
He added, though, that an inter-governmental investigation had not turned up any French tax information requests that remained outstanding or had not been dealt with, saying The Bahamas has "nothing on the record".
Mr Turnquest, though, voiced particular displeasure that The Bahamas had been deemed compliant last year with the various tax demands of the European Union (EU) and Organisation for Economic Co-Operation and Development (OECD) - France being a member in both.
Admitting that achieving compliance with each body had made The Bahamas' financial services sector "uncompetitive in some respects", with the industry going through "significant pain", the deputy prime minister said France's decision to perform a unilateral u-turn and blacklist this nation called into question whether it had all been worthwhile.
Pointing out that the OECD's Global Forum is the acknowledged body for dealing with tax matters, Mr Turnquest questioned why his French counterpart did not inform him of the impending blacklisting when both attended the body's 10th anniversary celebrations last week.
He also criticised France's failure to invoke the dispute resolution process contained in the Multilateral Convention on Mutual Assistance in Tax Matters, which The Bahamas signed in late 2017 to facilitate tax information exchange and co-operation.
"I have expressed to the French ambassador our disappointment, our total disgust with the way in which this has been done," Mr Turnquest said, "the disrespectful manner in which The Bahamas has been treated in this particular regard.
"We intend to communicate that to the Global Forum, to the OECD and the EU. There is no point, Mr Speaker, in us engaging in these multilateral organisations if individual members are going to take unilateral action, particularly without dialogue, at the highest level. Yet they expect commitment from us at the highest political levels.”
The latter point refers to the EU's move to temporarily "blacklist" the Bahamas in early 2018 on the basis that this nation had not given a commitment at the Government's highest levels to address its concerns over economic substance and the elimination of preferential tax regimes for foreign investors.
Mr Turnquest added: "The same goes here. They [France] did not engage with us at the highest political level, or indeed at any level. So we will communicate our feelings in this regard formally. The Bahamas is a committed partner to tax transparency, the cooperation and the performance of our obligations with our international partners.”
Pointing out that this had come at a significant cost to this nation's financial services industry, Mr Turnquest said: "The Bahamas has gone through significant pain to pass a suite of legislation, to the chagrin of the financial services industry, that has made us uncompetitive in some respects.
"This [France's action] demonstrates a complete disregard for the damaging repercussions and significant long-term impact that these unilateral punitive measures have on allied countries like The Bahamas that are fully engaged at the highest levels of international cooperation.”
Slamming the "less than transparent manner" employed by the Emmanuel Macron-led government, Mr Turnquest added: "I advised the ambassador that such a surreptitious posture knowing that they intended to blacklist us is an affront to the amicable relationship that we have fostered with France.”
Philip Davis, the Opposition's leader, said he backed the "expression of outrage" at France's “arbitrary” move, adding that there always seemed a “moving of the goal post” when it came to international regulatory standards.
However, he cautioned the Government against being too “bullish” in its response to France, urging it to first understand “why it is we are being blacklisted”. Mr Davis said complaints about The Bahamas' response to overseas requests for assistance had been a long-standing issue, with concerns frequently raised about this nation's ability to enforce the laws it has passed.
"From 2000 the country has been under assault in respect of one of the arms that contributes to GDP, financial services," Mr Davis said. “From what I understand the reasons undergirding this [French blacklisting] is our failure to properly respond to requests. It's important that we identify why they acted in such an arbitrary, draconian and disrespectful manner.
"One of our challenges over the years, not just with France but many parties around the world, is the ability to respond to requests; multiple requests...... We should always try to remind ourselves that we can pass these laws, but enforcement is also a key element. Enforcement requires proper resourcing and the setting up of the various structures to be able respond.”
Mr Davis said he has been “lamenting for quite a while" that The Bahamas should be “shoring up” its tax information exchange agencies, and ensure they are staffed with competent people to deal with these matters. He called for the Government to develop an “action plan” to address these issues.
Mr Turnquest, in response, said: "We have told each and every regulator, and we told every ministry that has any connection to any tax matter, to determine whether they have received any request outside of those outstanding, or whether they have received any follow-up to any request that had already been responded to. The fact of the matter is we have none, as far as we are aware.
"We are in the process now of determining what could possibly be the issue, as we have no requests outstanding, none as far as we are concerned.”