He said that much of the growth will also hinge on the sector’s reputation, which is inclusive of the professionals who populate the industry, the regulators as well as the government, which is responsible for setting policy direction and enacting appropriate legislation.
“We must be a jurisdiction, which is organised, well-regulated and replete with competent world class professionals and certainly open for business,” he told delegates attending the Financial and Corporate Service Providers Act, 2000 Industry Briefing.
The event was hosted by the Securities Commission of The Bahamas and Turnquest, who is also Deputy Prime Minister, said in the present international climate, regardless of whether it is true or not, being perceived as an international financial centre that is weak in hampering money laundering and combating terrorism efforts, or as a haven for persons engaged in illicit activities will inevitably destroy the nation’s financial services industry.
“It is a very serious matter for the jurisdiction when the Head of the Organisation for Economic Co-operation and Development (OECD) Global Forum on Tax Transparency and Tax Information Exchange, Monica Bahtia says that the nation’s image was that of the last tax haven standing and warns that actions are needed to avoid a blacklisting as was reported in The Tribune of April of this year.”
Turnquest said the Bahamas should not be fooled into thinking that serious above-the-board investors will start beating a path to its door to do business as a result of headlines like this.
He told the meeting that this announcement came prior to the government’s commitment to adopting the multi-lateral approach to shared tax information under the OECD’s Common Reporting Standard , which was developed in 2014 in response to the G20 request.
It calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. It also sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.
“The reputational hit the jurisdiction would have to suffer from being blacklisted as a non-cooperative, would pose an existential threat to our financial services industry restricting access to global markets and increasing the costs of doing business as a result of the greater due diligence requirements that those willing to do business with a blacklisted jurisdiction will incur. Transparency is the order of the day.”
Turnquest said that the Securities Commission has recently released guidelines on the management of accounting records, which impacts many financial and corporate service providers.
He spoke of the importance of this new initiative and commended the Commission for issuing the guidelines, which sends a strong signal to the international community that the jurisdiction is committed to world class regulation.
“As financial and corporate service providers, you must ensure that you meet your obligations and maintain accounting records as required under relevant legislation both in respect of your own businesses and any International Business Companies or exempt limited partnerships where you provide corporate or administrative services.
“You should expect that you are taking every effort to meet these fundamental responsibilities. You have a reasonable and pragmatic regulator in the Securities Commission, so as you see ways to improve the guidance, share it with your regulator but ensure at the same time that you meet the requirements,” he told the meeting.
- Countries: Bahamas