By NEIL HARTNELL
Tribune Business Editor
An ex-attorney general yesterday warned that France's "blacklisting" of The Bahamas may entice other countries to follow suit, and urged this nation to seek US help in defending its interests.
John Delaney, principal of the Delaney Partners law firm, told Tribune Business that the French government was likely "trying to score political points at the expense of places like The Bahamas" with its most recent action.
Suggesting it was trying to impress voters through the perception of cracking down on tax cheats, Mr Delaney said countries such as France incurred "little cost to themselves" by targeting The Bahamas and other small states who suffered tarnished reputations and a potential loss of business as a result.
While the French action was unlikely to have much actual impact upon the financial services industry and broader economy, he added that the international services hub model could ill-afford any hit to its "general standing" especially given its two-decade long effort to meet ever-evolving global standards.
"My greater concern would be other jurisdictions following suit," Mr Delaney told Tribune Business. "The French action, in and of itself, is of limited impact. It just tarnishes, though, and it's not nice to have a major country put us on their blacklist.
"It's disparaging and not good for business, but in terms of having an impact and difficulties getting in the way, it's of less concern. It's more about reputation. It's not helpful or desirable for a major jurisdiction to be blacklisting us from a PR perspective and general standing, whether in financial services or as a country that is engaged in international trade.
"We don't wish to have these things said about us, particularly when we've gone to great lengths to operate in a manner that is compliant with international standards. It's just extremely disconcerting and very unhelpful in terms of The Bahamas doing international business, and there doesn't appear to be anything fair in the way France has gone about it."
Several financial industry contacts have suggested it is ironic that France should "blacklist" The Bahamas now given that all its financial institutions, such as BMP Paribas, have exited this jurisdiction following the legal and regulatory pressures Paris imposed at home to drive them out.
But the French move is the latest example of individual European nations placing The Bahamas on their national "blacklists" despite being members of groups, such as the European Union (EU) and Organisation for Economic Co-Operation and Development (OECD), which have rated this nation compliant with the regulatory reforms they have demanded of it.
The Netherlands placed The Bahamas on its own "blacklist" earlier this year, and Mr Delaney agreed that such actions undermined the worth of The Bahamas' efforts in meeting EU and OECD impositions and "causes one to lose confidence" in working with such blocs if their members go further and apply their own standards.
K Peter Turnquest, deputy prime minister, previously expressed his "total disgust" over how The Bahamas had been blindsided by the French move. The Emmanuel Macron government has justified its actions on the basis that this nation, and the other three named, have taken too long to respond to requests for legal assistance and tax information, while the responses themselves are inadequate in terms of the information provided.
The Attorney General's Office handles all legal assistance requests, while the Ministry of Finance deals with tax information exchange demands. Mr Delaney argued that France needed to provide specific cases it had issues with, rather than "generalities", especially since Mr Turnquest said the Government had been unable to find any requests or follow-up demands that were outstanding.
Suggesting that the French move may be aimed more at its domestic audience, the former attorney general added: "I think they're trying to score political points internally at the expense of places like The Bahamas.
"My view on this is that in the world of international trade there's a lot of power plays going on, and unless we as a jurisdiction - and particularly as a small player - coalesce with others that have common interests or interests in looking after our well-being, then we are going to be vulnerable to these sorts of vagaries.
"The Bahamas, relative to a major European country, is seen as very vulnerable and, if they felt the need to score internal points by blacklisting The Bahamas, they will do so at very little cost to themselves. That's the reality of things."
Besides finding common cause with other international financial centres (IFCs), Mr Delaney said the obvious counter-weight to France and other EU countries is the US given the shared history, economic, trade, security and cultural ties.
While dealing with the Trump administration is often a unique experience, the US president has at times shown and expressed obvious disdain for European states and their leaders - something that The Bahamas might be able to use to its advantage, especially given the extra challenges post-Hurricane Dorian.
"We are a small jurisdiction and economy," Mr Delaney said, "but we do have bigger countries with shared interests that respect our approach to running an economy. What we need to do strategically is coalesce with our bigger and more powerful friends to help us make our way in the world.
"Our neighbours to the north have been our closest friend, and I believe out of any major jurisdiction, the US understands us best. We need to understand what they're about, they need to understand our concerns and we need to pursue them.
"The reality of the matter is there's no other country that we have greater links to. We are inter-linked on so many levels; economically, historically, socially. You'd be hard-pressed to find a single Bahamian family that does not have relatives living in the US," he continued.
"Apart from that we're right next door and they're our number one trading partner. Our security interests are linked. It's absolutely natural that we prevail upon them to act for our interests and be an advocate when our own voice may not be loud enough to be heard.
"The US ought to be better understanding of The Bahamas, and they know that we are running as best as can be reasonably expected a transparent and well-regulated financial services industry that can be compared to any of the onshore centres."