The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

The Bahamas is “trying to close gaps” in its legislation to ensure a favourable review by the Organisation for Economic Co-operation and Development (OECD) over its compliance with global automatic tax information exchange standards, the Attormey General has revealed.

Ryan Pinder KC, speaking at the Society of Trust and Estate Practitioners (STEP) Bahamas conference, reaffirmed that fiinancial institutions operating in The Bahamas will face mandatory registration to address loopholes identified by the OECD during its peer review of this nation’s Common Reporting Standard (CRS) compliance.

He said the Government has tabled the Automatic Exchange of Financial Account Information Bill, which will require all financial institutions to register under the reporting regime - even if they do not have reportable account - in the House of Assembly.

“We have an amendment to the Automatic Exchange of Financial Account Information Act; the third amendment relating to CRS,” said Mr Pinder. “You would know CRS, and you may also know that we are at the end of a peer review with the OECD. The OECD has mentioned that there are some gaps, and we are trying to close those gaps in time for our assessment so that we are in a good position.”

He explained that the review highlighted concerns with how the current framework tracks financial institutions operating within the jurisdiction. “One of the primary gaps brought to our attention relates to how our CRS framework is structured,” said Mr Pinder.

 “Currently, you only have to register if you are a financial institution with reportable accounts. The concern raised was: ‘If you only register those with reportable accounts, how do you know how many financial institutions actually exist in your jurisdiction?’

“If you don’t know how many financial institutions you have, how can you properly enforce compliance with the Automatic Exchange of Information Act? That is a fair observation.”

To address that issue, Mr Pinder said the Government is moving to require mandatory registration for all financial institutions, regardless of whether they hold reportable accounts.

“We are now putting in mandatory registration for all financial institutions in the country,” said Mr Pinder.  “If you have clients that are financial institutions, regulated or unregulated, for CRS purposes they are a financial institution and they will have to register with the board.”

He said the reforms will also introduce a “nil return” reporting concept for institutions that have no reportable accounts. “We are also introducing a counterpart ‘nil return’ concept. So, if you are a financial institution with no reportable accounts, you will still register, and then there will be a drop-down for the nil return,” the Attorney General added.

Mr Pinder said the amendment will be fast-tracked once passed, with financial institutions expected to register by mid-June, adding that corporate service providers should be able to comply because they are already familiar with the entities they administer.

“We are going to ask financial institutions to register their entities by the middle of June, so you will have to move on it,” said Mr Pinder. “Responsible corporate service providers should be able to comply. You all know what your clients do and what entities you manage here.”