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Eu Sorted: Now For France And Holland

Deputy Prime Minister Peter Turnquest.

Deputy Prime Minister Peter Turnquest.

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The deputy prime minister is "very confident" The Bahamas will resolve its blacklisting by individual European Union (EU) members after it yesterday completed its escape from the bloc's tax watch-list.

K Peter Turnquest told Tribune Business that this nation was "making progress in addressing the issues" - including "distrust" - that led both France and the Netherlands to place it on their own individual "blacklists" of countries deemed non co-operative on tax matters.

Disclosing that their concerns have now been identified, Mr Turnquest said they related to "similar issues that we've had in the past with respect to the exchange of [tax] information". This likely means that The Bahamas was failing to respond within the timeframe sought by both France and the Netherlands, and/or the content of the information supplied was less than desired.

The deputy prime minister added, though, that both EU members had failed to be totally transparent about the standards they wanted The Bahamas to meet before invoking their national "blacklists". He also suggested communication with this nation had not been up to the mark.

Speaking after the 27-nation EU confirmed The Bahamas' removal from its so-called "grey list", deeming this nation to be in full compliance with its tax-related demands, Mr Turnquest said this nation has no qualms about meeting global regulatory standards once "treated with mutual respect".

"I think the message is that The Bahamas has demonstrated, and attempted to demonstrate for any number of years, that it is co-operative and meets the standards when they are made known to us and they are transparent," he told this newspaper.

"In the case of those individual countries that may have reservations and specific issues, we are addressing those. Once we have communication and are treated with mutual respect, we don't have reservations about dealing with the issue of international standards. We don't equivocate over that."

Mr Turnquest declined to provide detail on the rationale for the French and Dutch actions, but said: "It's communication and some distrust in the relationship that caused them to take the action they did.

"We are making progress. We know what the issues are, and are dealing with them. It's similar issues that we've had before with respect to the exchange of information. I'm very confident we will address their issues. What their timeline is for removing us from their list, I can't speak to that. But I'm very confident we will be able to address their issues."

The Bahamas' removal from the EU's so-called 'grey list', effectively a category of nations that were being monitored for full compliance with its demands, means this nation is now deemed to have properly implemented economic substance requirements, the removal of preferential incentives for foreign investors, and be demonstrating full co-operation on all tax matters.

However, many in the Bahamian financial services industry are questioning the value of meeting all the EU's demands when its individual members - France and the Netherlands - adopt what appear to be even more rigorous criteria to "blacklist" this nation on similar tax-related grounds.

While less worrisome than a blacklisting by the full EU, a fate that befell rival international financial centres (IFCs), the Cayman Islands and Panama, yesterday, such individual country actions still negatively impact the reputation of The Bahamas' financial services industry, deter French and Dutch citizens/companies from doing business here, and delay transactions with those states.

Emmanuel Komolafe, a Bahamas-based risk management specialist, yesterday told Tribune Business that "it makes no sense" for the EU to brand The Bahamas fully compliant while some of its major members keep it on their own blacklists.

Arguing that this had dampened any joy at escaping full EU scrutiny, he said: "The EU initially put us on their blacklist, then took us off it and put us on their 'grey list'. Now we are off the 'grey list' but, in the middle of that, the Netherlands put us on their blacklist for tax matters and then France did.

"My first flashpoint is: Today, the EU have taken us off their grey list, yet here we have the Netherlands and France doing the same thing with their own blacklists. They are part of the EU, and the EU has confirmed we've fulfilled their requirements, so I submit they ought to do the same. It only makes sense for the Netherlands and France to follow suit."

While acknowledging that being one of 16 countries removed from the EU's 'grey list' was positive for a Bahamian financial services industry badly in need of a boost, Mr Komolafe said the country "must go beyond that" given that national blacklists undermine the rationale for complying with both the EU and likes of the Organisation for Economic Co-Operation and Development (OECD).

"Having their own lists undermines the process that the EU follows," Mr Komolafe added. "We must follow up with France and the Netherlands so that they take us off their blacklists, especially as they're based on the same issues of tax co-operation and the exchange of information.

"The removal from the 'grey list' is positive news but is not cause for jubilation." Besides The Bahamas' continued presence on national tax blacklists, Mr Komolafe added that it still needs to focus on also escaping the Financial Action Task Force's (FATF) monitoring list of countries that have deficiencies in their anti-money laundering and terror financing regimes.

Mr Turnquest, meanwhile, said The Bahamas' 'grey list' escape gives the Bahamas Financial Services Board (BFSB) and the private sector "another tool through which to promote The Bahamas" as a compliant, well-regulated jurisdiction to international investors.

He conceded, though, that The Bahamas cannot afford to "rest on our laurels" and needs to "keep our eye on the ball" given the constantly-changing global regulatory environment and standards to ensure it avoids such pressure in the future.

The deputy prime minister also confirmed that this nation was "actively engaged", and monitoring, the OECD's proposals for countries to levy a minimum tax rate on multinationals as well as for taxing the digital economy.

"It is a significant achievement given all the challenges put before us," Mr Turnquest said of the 'grey list' escape, "and our team demonstrated tremendous capacity and proficiency in dealing with it.

"We are happy with the result, and have demonstrated to the international community that we are reliable partners, and that The Bahamas is committed to good governance and transparency for the industry.

"In terms of the industry itself, it's a boost for us again and brings confidence to the jurisdiction that it is compliant with international standards and regulatory quality."

Mr Turnquest added that upgrading the Investment Funds Act to meet the EU's Alternative Investment Fund Management Directive (AIFMD) would also provide "a particular advantage to us as we seek to regain our position with regards to fund management".

He said it was critical for the partnership between the Government, financial services industry and its regulators to continue to ensure that The Bahamas "makes sensible regulations and legislation that can give us a tremendous advantage."

Comments

Well_mudda_take_sic 4 months, 3 weeks ago

The Bahamas and the other OFCs need to create a blacklist and put on it the EU, OECD and the individual countries that make up these globalist organizations. The dastardly globalist bureaucrats in the outrageously high tax European jurisdictions have for decades now been trampling all over the sovereign rights of other much smaller nations as they themselves continue to go about taxing their own citizenry to death. Instead of reining in their own wasteful, fraudulent and corrupt over-bloated governments in order to lower taxes within their own outrageously high tax jurisdictions, these despicable over-paid greedy globalists prefer to simply beat up on and impose burdensome costs on much smaller OFC nations like the Bahamas. Why should we be burdened with costs to help these essentially socialist countries collect ridiculously high amounts of taxes from the wealthier individuals within their own citizenry in order to pay for all of the absurd entitlements that have been promised to their citizenry across the board by their corrupt politicians?

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