The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The MINISTER of Financial Services yesterday said he was in the process of forming a Foreign Account Tax Compliance Act (FATCA) team to“proceed with haste” with an assessment of the second model Intergovernmental Agreement released by the US Treasury Department.  

“Model II was released late last night,” Ryan Pinder said. “I have not had the opportunity to review it as yet. I have started engaging in reviews and interviews to form the FATCA composition team to plough ahead with the industry assessment programme.

“That’s in the planning phase. I look forward to forwarding both agreements to the Attorney General’s Office for initial review and comment, and proceeding with haste on the industry assessment of both the readiness of the industry for FATCA and their opinion on the two model agreements now that we have the templates in hand.

“We now have the facts before us in which to start proceeding and make a reasoned decision on which the Government will stand as it relates to FATCA.”  

Mr Pinder said that while the Bahamas has not had any discussions yet with the US government, it was taking a serious approach.

“When the Bahamas approaches a serious decision like this it will do so with all the facts on the table, form a  decision that is the strongest with the input from the private sector, and we will make a decision in the best interest of the financial servcies sector,” said Mr Pinder.

He added that  FATCA will require foreign financial institutions to report directly to the IRS information about financial accounts held by US taxpayers, or held by foreign entities in which US taxpayers hold a substantial ownership interest. 

“We as an industry must be prepared to accept that what we are subject to under FATCA will only be the start of the new normal,” Mr Pinder said.

“The global paradigm is shifting to an expectation of transparency globally.  We have been witnessing this evolution over the last 15 years, from when legislative changes were made for anti-money laundering purpose since the early 2000s, to the implementation of TIEAs, to the imposition of OECD and FATF recommendations, and now FATCA. 

“We, however, as a longstanding jurisdiction which has developed a significant level of local expertise, an independent financial centre we cannot only compete in this new normal, we can be industry leaders,” said Mr Pinder, while addressing the  22nd annual Caribbean Actuarial Association Conference.

“The Ministry of Financial Services, with respect to FATCA, is committed to thorough analysis of the industry to understand the level of preparedness in the different sectors, and to understand which sectors of the financial services industry are underprepared and require guidance.

“These areas of the industry that I term vulnerable sectors should come together and try to work on a common solution this will help spread the cost and work through a broader base of institutions.”