The Tribune

By ERIC ROSE

Bahamas Information Services

The Minister of Financial Services believes the increased demand for compliance in financial services has created the ability for Bahamians to specialise and become an entrepreneur in this niche.

“In the face of what seems to be overwhelming changes, we should explore opportunities as well. We in the Bahamas have excelled in developing human capital and professionals in compliance. As such, we have looked to develop opportunities for entrepreneurism in compliance,” Ryan Pinder said at the Higgs and Johnson annual client seminar, held at the Sheraton Nassau Beach Resort.

Mr Pinder added that defining the framework for professional compliance outsourcing by the Securities Commission of the Bahamas is a significant step in the right direction to make this happen.

“We will now take the next step in the development of the financial services industry; what we frequently speak about,” he said. “We will cause for Bahamian compliance officers to own their segment of the financial services industry.

“Through the finalisation of the Guidelines on Outsourcing Compliance Functions, through the development and application of the international initiatives, the expertise of our domestic human capital in the compliance function will be given the opportunity to be entrepreneurs.”

Mr Pinder said recent international regulatory developments raised legitimate questions about confidentiality of information.

“We recognise that confidentiality is important for a number of reasons,” he said. “In many of our new markets, such as Latin America, confidentiality is important for personal safety concerns and a lack of confidence in their respective governments. This is an important distinction when we advance notions of confidentiality.”

The Minister added that the Government had advanced this argument in the context of the Foreign Account Tax Compliance Act (FATCA).

“My ministry forcefully and articulately advanced the Bahamas’ concerns with the requirement that all trusts managed by professional trustees - even those without US interests – be required to register and enter into an FFI (Foreign Financial Institutions) agreement with the IRS (Internal Revenue Service),” Mr Pinder said.

“This had significant confidentiality concerns for the number one segment of the financial services industry.”

He added that having advanced this argument, the US Treasury updated its FATCA exemption Annexes (Annex II) of both Model Inter-governmental Agreements (IGAs) to include an exemption for ‘trustee sponsored trusts’, such that a trust with a professional trustee would be exempt from the registration and FFI agreement requirements where the due diligence and reporting – where there are US interests – are carried out by the professional trustee, an FFI under FATCA.

“This demonstrates to me that, with arguments grounded in legitimacy and credibility, confidentiality can be protected,” Mr Pinder said.

“We saw confidentiality being eroded with respect to money laundering and now, as we discussed, being eroded in the context of unlawful tax evasion.

“It is my opinion that we have to – and I am certain that we are – distance ourselves from the perception as a jurisdiction of tax cheats and a place to hide wealth, but demonstrate that we are a jurisdiction with a highly skilled workforce, a long history of integrity, a well-regulated industry where wealth is managed and, in turn, positioned for international business and investment globally.”

In this vein, Mr Pinder said, the Government remains committed to the philosophy and argument of confidentiality with legitimacy.

“We maintain that we are a jurisdiction of substance and credibility, always operating consistent with international best practices,” Mr Pinder said.

“The Bahamas, as a preeminent independent international financial centre, will succeed, we will grow and we will advance. We will identify new opportunities and stay in front of the evolution of the industry.

“The Government of the Bahamas is committed to this notion. Things may shift and evolve, but we will do all we can to ensure that opportunities grow as a result of that.”