0

Bahamas must decide if ‘to hell with’ the EU

photo

Branville McCartney

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas must soon decide whether to tell the European Union (EU) “to hell with it” and refuse to be cowed by its repeated ‘blacklisting’ threats, an ex-Democratic National Alliance (DNA) leader argued yesterday.

Branville McCartney told Tribune Business the country’s financial services industry “continues to be wiped out” through the EU and other global bodies “moving the goal posts” over the regulatory standards The Bahamas must achieve every time it escapes their adverse listings.

Speaking after the Government confirmed the EU is again set to ‘blacklist’ The Bahamas at its upcoming Council meeting in October, he said this nation’s 22-year effort to comply with Europe’s demands - and those of the Organisation for Economic Co-Operation and Development (OECD) and Financial Action Task Force (FATF) -  had yielded nothing but a steady contraction in the country’s second most important industry.

Disclosing that, as a financial services provider, his Halsbury Chambers law firm “has to go through hell every year” to meet the reporting and record-keeping demands imposed on The Bahamas, Mr McCartney told this newspaper that the country has “gone over and beyond” in making itself one of the world’s most heavily-regulated jurisdictions.

Recalling the then-Ingraham administration’s FATF-enforced regulatory overhaul in 2000, he said: “Twenty years later we’re still having threats of being blacklisted. What do we do? I really don’t know, in the sense that they’re threatening to blacklist a country that has gone over and beyond what is required over the years, certainly to the detriment of our financial industry to say the least.

“They keep on moving the goal posts. As a financial services provider, as my firm is, we have to go through hell every year in terms of certain reporting requirements because of the laws put in place over the years. Where does it end? Where does it end? When they talk about blacklisting, it causes the administration of the day to go into a panic so that we’re not adversely affected in any form or fashion.

“Because of the threat of blacklisting 22 years ago, we started to wipe out our financial services industry, the second industry in the country,” Mr McCartney continued. “Every time they speak about blacklisting, and the administration of the day addresses their demands, our financial services industry continues to be wiped out. If they keep this up we’ll soon not have a financial industry in The Bahamas, and I think that’s really what they want to happen.

“No matter what we do, they’ll continue to threaten and move the goal posts until we don’t have a financial industry whatsoever. The question I think the administration needs to determine is whether it’s best to comply with their requests, knowing that they will continue to move the goal posts as they have been doing for the last 22 years, or say ‘to hell with it; let them blacklist’. Are we going to be better or worse off? That’s something the administration will have to determine.”

While there is likely to be increasing temptation for The Bahamas to assert its sovereignty, defying the demands of the EU and other ‘blacklisting’ bodies would also come with potential consequences. Besides the reputational damage from being ‘blacklisted’, The Bahamas could also be subjected to sanctions that add to the time and cost of conducting transactions with European financial institutions, companies and clients, hurting competitiveness and the ease of business.

Access to the EU financial services market for Bahamian institutions could be restricted, while local affiliates whose parents are based in the bloc’s 27 member states will also come under increased scrutiny that could ultimately lead to pressure for them to exit this nation. And a ‘blacklisting’ by the EU will also lead to The Bahamas’ inclusion on its members’ own national blacklists, further deterring possible investors and permanent residents.

Meanwhile Sir Franklyn Wilson, too, hit out at the double standards employed by the EU, questioning why it was not threatening to ‘blacklist’ US states such as Delaware, Nevada, Wyoming and South Dakota - all of which now offer the secrecy and tax advantages that The Bahamas has been driven away from by the international regulatory onslaught.

Branding Europe’s actions as “a blight” on the global financial and economic system, the Arawak Homes chairman asserted: “It has nothing to do with objectivity. They pick on small countries, and do what they want to do. It’s terrible. It’s just abusive. It’s crazy. It’s crazy.....

“Tell them go talk to the state of Delaware. All these things they tell us we can’t do, they allow in Delaware. Tell them go after that and let the US deal with them. It’s abusive.” Sir Franklyn argued that, like any “abuser”, the EU and OECD will “find some way to rationalise their abusive conduct” towards small international financial centres (IFCs) such as The Bahamas. 

Yet while international pressures continue to “erode” the financial services industry, he added that “the good news” was that most of the damage and loss has already been suffered by The Bahamas. “Life goes on,” Sir Franklyn said. “We’ve had industries before that have shrunk in size. There was a time when the sponging industry was booming. We’ll find a way to survive, but the ‘blacklist’ issue is terrible. It’s abusive. It’s abusive.”

The Prime Minister, responding to the latest EU threat, branded it “premature” and hit out at the arbitrary, discriminatory “name and shame” tactics employed by the EU and other bodies when he addressed the United Nations General Assembly over the weekend.

“When we look at the countries that are flagged as high-risk and blacklisted, several startling commonalities emerge. Why is it that European states that operate frameworks akin to that of high-risk or blacklisted countries are not even eligible for inclusion on these lists? Why are all the countries targeted – all of them – small and vulnerable, and former colonies of European states?” Philip Davis KC said.

“We find it astounding that the $2-$3trn which is estimated to be laundered each year through the developed countries are never flagged as causes for concern. And yet my country, which is widely recognised as one of the best-regulated countries in the world, and other countries like The Bahamas, are singled-out for such reputational attacks?”

Few would disagree with the Prime Minister’s ‘big picture’ analysis. Many observers believe the EU and OECD’s ultimate goal is to undermine the competitiveness of The Bahamas and other international financial centres (IFCs) by imposing overly-burdensome regulation that drives them out of the industry, and helps their member states regain millions in tax dollars they believe are being lost offshore.

Indeed, Mr Davis’ was backed by Kwasi Thompson, the Opposition’s shadow finance spokesman, who said in a statement: “The Opposition stands in support of the Prime Minister’s recent statement at the United Nations General Assembly condemning these punitive blacklistings which unfairly harm our reputation in the international community.

“We agree with the Prime Minister that these actions seem to be unfairly targeted towards former colonised and vulnerable small island states. We remain resolute in our previous communications with the EU while in office that these drastic actions should only be issued in the most extreme and stubborn circumstances.”

However, Tribune Business uncovered evidence showing The Bahamas was warned on December 13, 2021, about the EU’s concerns over its “economic substance” and tax reporting regime. The Government responded with three letters in six weeks, all signed by the Prime Minister, promising Brussels this nation would address these issues - all of which involve technical implementation matters rather than policy - within the required deadline.

This raises questions of whether the imminent EU blacklisting was avoidable, and The Bahamas failed to follow through and execute. Similar questions were also raised by the Free National Movement (FNM). 

Comments

IslandWarrior 2 months, 1 week ago

In the words of Barbados Prime Minister, the Honorable Mia Mottley, 'we have also seen others use alternative mechanisms'.

1

bahamianson 2 months, 1 week ago

Bunch of bullies. It is don't do as I do , do as I say. It is wrong to bully classmates. The only time it is right to bully is when you are a big country. You bully small countries, and it is ok.

3

DWW 2 months, 1 week ago

So basically the lazy BS attitude of the Bahamas Gov't is causing the rest of us hardship. Well done. well done. This sentence is a misnomer that speaks volumes about this petty issue. "The Bahamas could also be subjected to sanctions that add to the time and cost of conducting transactions with European financial institutions, companies and clients, hurting competitiveness and the ease of business." Every single Bahamian reads this and thinks "Well, they can't make it any worse than it already is.". opening a bank account in the Bahamas takes 6 to 12 months minimum. Tell me i'm wrong please.

0

Proguing 2 months, 1 week ago

This is a new form of colonialism. It’s submit or be blacklisted!

2

sheeprunner12 2 months, 1 week ago

However, Tribune Business uncovered evidence showing The Bahamas was warned on December 13, 2021, about the EU’s concerns over its “economic substance” and tax reporting regime. The Government responded with three letters in six weeks, all signed by the Prime Minister, promising Brussels this nation would address these issues - all of which involve technical implementation matters rather than policy - within the required deadline.

Post the communications between the PM and the EU.

Then show us what and where the technical upgrades were done.

That is transparency & accountability.

Calling the EU "black country haters" doesn't fly with the truth of the situation.

2

Proguing 2 months, 1 week ago

Errr we are not at the order of Brussel's bureaucrats, this is interference in our own affairs and these threats are prohibited by the UN Charter.

0

Dawes 2 months, 1 week ago

We are not at the order of the Brussel's bureaucrats thats right. However their citizens and companies are, so if they tell them not to do business with us they won't and move to somewhere they can.

0

sheeprunner12 2 months, 1 week ago

The Bahamas can resolve this matter very easily ............ Tax these foreigners just as their country of origin does OR MORE and watch how quickly the EU would leave us alone.

The EU is jealous that we put ourselves out there as a "tax haven" ......... and we are stupid because we continue to live in the past and not make money off these filthy rich people who wish to bank in The Bahamas. Why continue taking the harrassment of the EU for free????

1

Proguing 2 months, 1 week ago

Tax the foreigners and they are gone, great idea...FTX will move to Caymans

2

killemwitdakno 1 month, 4 weeks ago

FTX knew that we we're aiming for 1% before he came here. He didn't want to look grimy being here for nothing either, hence fulfilling the brick and mortar BEPS requirement with a headquarters facility that probably cost just as much as simply direct taxing would.

0

LastManStanding 2 months, 1 week ago

The EU is nothing more than a vassal of the US at this point, and the little economic and political independence that it had is now gone thanks to the economic suicide that they have brought upon themselves for the past six months. Talk to the people in charge and not to the jokers who pretend that they have some influence on what goes on in the world. The EU will soon have much more pressing matters to worry about as winter approaches anyways; freezing to death is a much bigger concern than harassing us.

3

birdiestrachan 2 months, 1 week ago

Is Neil and the tribune taking up for the EU in their view how much is enough and should there be different standards for different countries led by black leaders

0

Flyingfish 2 months, 1 week ago

We need to join up with other low tax states (caymans etc) in the world and form a tax union to fight the EU garbage.

0

sheeprunner12 2 months, 1 week ago

Cayman is part of the UK. Not a country

0

Flyingfish 2 months, 1 week ago

It is a territory yes, I never claimed it is a country but we should as low tax states agree to work together instead of being competitors, for our betterment to stand against those that want to hurt our industries.

We should all adopt a common tax policy and implement restrictions on the EU for their abusive and invasive policy.

0

sheeprunner12 2 months, 1 week ago

Wishful thinking ...... Rich imperial countries use "divide & conquer" as their main weapon against poor neo-colonial countries. Case in point is Ukraine. Imagine 242.

0

TalRussell 2 months, 1 week ago

Nah ― Comrade Bran disclosing that, as a financial services provider, his Halsbury Chambers law firm “has to go through hell every year” to meet the reporting and record-keeping demands imposed on The Bahamas, Comrade Bran, told this newspaper that the country has “gone over and beyond” in making itself one of the world’s most heavily-regulated jurisdictions ... But Comrade Bran, didn't disclose the actual number with connections to pay cheques for the benefit of the working popoulaces who too have gone through hours of hell, by his chambers high net worth clients ― Yes?

0

Sign in to comment