The Tribune

MINISTER of Financial Services Ryan Pinder said the Foreign Account Tax Compliance Act might be the “most significant international matter facing” the financial services industry today.

FATCA is an effort by the US government to improve tax compliance by Americans who use foreign financial assets and offshore accounts in places like the Bahamas.

“We have hosted many FATCA conferences here in the Bahamas, some sponsored and organised through the Ministry of Financial Services, some organised by the Bahamas Financial Services Board, and some by the Eugene Dupuch Law School and other institutions,” Minister Pinder said.

“At each event you could sense a mood of intimidation and sense of being overwhelmed by the private sector,” he added. “This is why it is so important to have the input and explanation from the US Treasury representatives and IRS (Internal Revenue Service) representatives. We will ensure that all opportunity is given to provide the education and information on such an important issue.”

Minister Pinder was speaking at “Complying with FATCA”, a one day regional conference at the British Colonial Hilton, held by his Ministry in association with the Bahamas Association of Compliance Officers (BACO).

“This I think is a first in the region, especially for the regional financial services industry, where the United States government technical experts engage not only the private sector here in the Bahamas, those from the region, but also on a multilateral, and, later, a bilateral basis with representatives from regional country governments and regulators,” Mr Pinder said.

“In this vein, I want to personally welcome all those attendees here today from throughout the region, both from the private sector and the public sector. We have representatives from at least 10 countries as part of this symposium. The participants here today extend beyond the CARICOM region, and into Central America, I want to congratulate you all and welcome you to the Bahamas.

Minister Pinder said that the industry, locally, must be prepared to accept that what it is subject to under FATCA will only be the start of the “new normal”.

“The global paradigm is shifting to an expectation of transparency globally,” Mr Pinder said. “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 (Tax Information Exchange Agreements), to the imposition of OECD (Organisation for Economic Co-operation and Development) and FATF (Financial Action Task Force) recommendations, and now FATCA.

“We, however, have developed a significant level of local expertise; we must be committed to competing in this new normal. We can be industry leaders.”

Mr Pinder said that in the implementation of FATCA, all stakeholders have certain responsibilities.

“We will hear today the responsibilities of both the private sector and of government, how private sector is expected to prepare and the options for government with respect to intergovernmental agreements,” he said. “Of equal importance, we will hear about how different products are treated for the purposes of FATCA, something that is clearly of interest to the private sector.”

He said that in launching the government’s 10-year strategy for Financial Services, he emphasised the urgency of formulating a focused and defined plan to address the many aspects of FATCA and its applicability to the country’s financial services industry.

“Recognising FATCA and its implementation is a responsibility of both government and private sector,” Mr Pinder said, “we in the Ministry of Financial Services thought it wise, even before engaging the United States, to create a FATCA Task Force representative of some of the most progressive minds in the private sector of our financial services industry.

“This FATCA Advisory Group had the mandate to review FATCA requirements and make recommendations for research and ultimate discussion and negotiation on matters particularly sensitive and relevant to the financial services sector of the Bahamas.

“It was this FATCA advisory group of private sector representatives who would partner with my Ministry to prepare for the beginning of negotiations on FATCA.”

He added that the FATCA Advisory Group prepared a strategy document for the government to consider in its preparations, a model that his ministry prides itself in: engagement at all levels with the private sector as government policy is developed.

“I want to thank the private sector for effectively having a meaningful role in the preparation of the government of the Bahamas for negotiations and discussions with the United States on FATCA,” Minister Pinder said. “Having recognised the areas of FATCA that have particular relevance to our financial services industry, we are prepared to address them.

“We are thankful for the opportunity to have continued dialogue with US experts for FATCA on these matters. The ability for us as a region to gain valuable knowledge from the experts is a necessity. We, as a region, just don’t possess the expertise.”

Mr Pinder added: “I view this event as a historic event for financial services in the region, addressing a topic that is of utmost importance to the private sector and governments.”

Caption

Minister of Financial Services Ryan Pinder speaks at the “Complying with FATCA” conference.

Eric Rose/BIS