The Tribune

By RICHARD COULSON

I have just read press reports that another bill has been tabled in the House to avoid blacklisting, by satisfying - better read “appeasing” - the European Union (EU) in its campaign to extract full compliance on tax matters.

Our Government will now face the tedious task of collecting comprehensive financial records from any corporate group doing business here with more than $850m annual revenue (IBM maybe? EXXON?) packaging the massive paperwork and sending it off for analysis by the bureaucratic gnomes in EUland. Why? At what possible benefit to our nation? Why not simply decline?

Last week at the OffshoreAlert conference in Miami, attended by over 300 outspoken voices from public and private sectors, I enjoyed a breath of fresh air scepticism about EU, OECD, CFATF and all the other acronyms with ambiguous rules against money-laundering, terrorist financing, tax evasion and “unfair tax policies”. Yes, the IRS from Washington was also present, making a tough but crystal-clear presentation of what the US can and cannot do to collect federal income tax.

The conference sponsors handed to every delegate the latest issue of The Cayman Financial Review, a serious quarterly journal that prints analytic pieces about the international economy. It often calls a spade a spade and a dirty one at that - a far cry from our bland Bahamas Investors Review, whose editors stick to “better in The Bahamas” promotional platitudes.

Two detailed stories in the Cayman Review should destroy any illusion that the EU is an impartial body promoting equitable, fair-minded treatment between the European nations and the offshore world. Their real objective is to extract the maximum tax revenue from offshore financial centres (OFCs) such as Cayman with its $4 to $5 trillion of annual flow-through, in order to support the profligate fiscal and spending policies of counties such as France, Germany, Belgium and Spain.

The first of these profound articles is titled “Mr Moscovici and his EU “lists of many colours” and names French citizen Pierre Moscovici as EU Commissioner for Taxation, strongly implying he is backed by “high-profile left-wing NGO charities like Oxfam”. The so-called “harmful” tax competition provided by low - or zero - tax OFCs is only “harmful” to European countries that are hurt by their own misguided policies.

The second article, titled “EU Blacklist: The real story is demographic decline and a panicked search for revenue”, explains how Europe is suffering from two economic traps.

While its population is static or declining, particularly among working ages, its countries fail to reduce their levels of social security and welfare payments. Second, they have allowed immigration to ascend catastrophically, with waves of immigrants unprepared linguistically or culturally and falling dependent on public welfare. As a result, only 12 of the EU’s 28 members have been able to balance their government budgets. German Chancellor Merkel quotes an alarming statistic: with seven percent of world population, Europe accounts for 50 percent of welfare spending - an imbalance for which her own party bears much responsibility.

These dry figures cover innumerable stories of human tragedy and suffering. But why should the OFCs accept blame for measures they never created? It is baffling to me that our Government, in its many statements from Minister of Finance Turnquest, seems to accept the EU has some “higher vision” that we must simply obey. The Cayman Review points out that neither the USA nor China are members of the EU or pay any attention to its rulings. Is it not possible that we, trading heavily with both nations, could follow the same path?

Privacy vs ‘The Public Interest’

The most dramatic session at the Miami conference arose from the Paradise Papers, whose many confidential documents were taken from Appleby, the leading Bermuda law firm, and then disclosed by the international press. The moderator, David Marchant, read a forceful statement from Appleby that these documents were obtained by cybertheft, and that the firm was suing the media for unauthorised publication of “stolen goods” - privileged client-attorney communications.

Legal experts believe this case will go to the Supreme Court to resolve the long-running debate between legitimate confidentiality and the “public interest” in learning what sins may, or may not, be committed offshore.

The discussion panel generated heated debate. Two members represented the German newspaper that broke the Paradise story, and the ICIJ (International Consortium of Investigative Journalists, based in Washington) that spread it widely among print and TV media. The other two were retired senior of officials of the Bermuda government: former Prime Minister Michael Dunkley and former Finance Minister Bob Richards. They went much further than simply defending Appleby. They attacked the very notion that Bermuda was a “tax haven”, claiming forcefully that “Bermuda is not a place to hide money”, citing the many information requests from foreign authorities had been promptly answered when presented through well-established inter-government channels.

In both his public presentation and his private words to me, native Bermudian Bob Richards revealed himself as a passionate opponent of what he called the “hypocrisy” of the world’s power blocs, like the EU nations, in forcing regulations on small offshore jurisdictions, and then failing themselves to adopt them. When a Bank of England official argued to him in favour of a international beneficial ownership register, he enjoyed retorting that Bermuda had already created one many years earlier. He told the assembly of having been caught in a massive human rights demonstration in London where he was vilified for representing an OFC, guilty of reducing funds for “the starving thousands of African babies”. This typical stereotype is encouraged, he believes, by the reporting style of the liberal media.

The two-day Conference left me troubled with a profound doubt. Beginning years ago should The Bahamas have rejected the very concept of “blacklisting” - refused to accept that a cadre of European nations, who have abysmally mismanaged their own economies, can dictate the rules of the game? Suppose we had formed a common front with Bermuda, Cayman and all the British Overseas Territories and sovereign nations lumped together as Offshore Financial Centres. Could we have retained tighter control over our own financial regime? Could we still?

IMAX Films, Someday?

For well over a year, Bahamians have watched with bemusement the looming structure rising at the junction of Gladstone Road and JFK Highway. Last June, the press informed us, yes, an IMAX projection facility plus eight regular movie houses were being built, as the starring element in a vast entertainment/hospitality/restaurant centre known as Fusion Superplex covering some 100,000 square feet. Photos of the four young Bahamian entrepreneur-founders were shown, who had raised $42m, together with an artist’s rendering of the impressive façade overlooking Lake Cunningham.

Not much more was heard until this year’s February 2 story eyeing an April 20 opening, for which construction work was being boosted to 24-hour shifts. Clearly, the effort was not enough. April 20 has come and gone, with hard-hat workers still scuttling like busy ants, scaffolding being moved from one wall to another, and no paved entrance drive or parking lot yet replacing the dirt trucking ramps.

No announcement of the delay was made, or any indication of a new date. Although continuing work is visible to all passing motorists, ever-sceptical Bahamians are joking about taking the kids to the movies only to find the doors still shut.

Always favourable to writing about any new venture, I have often asked for a site visit and interview with the principals, but have been rebuffed by their public relations lady, a strict gate-keeper saying “we aren’t ready.”

Oh well, together with the kids, I can wait to see my first IMAX film.