The Tribune

By NEIL HARTNELL

Tribune Business Editor

and NATARIO McKENZIE

Tribune Business Reporter

The Opposition’s deputy leader yesterday urged the Minister of Financial Services to use the ‘Panama Papers’ leak to advise her Cabinet colleagues against any further disclosures of private e-mails.

K P Turnquest told Tribune Business that the public release of 11.5 million documents belonging to Panamanian law firm, Mossack Fonseca, highlighted the potential damage that may have been caused by the revelation of private e-mails belonging to the Save the Bays environmental group.

Their contents were disclosed in the House of Assembly by Cabinet Ministers, Jerome Fitzgerald and Fred Mitchell, and Tall Pines MP, Leslie Miller, and Mr Turnquest expressed hope that the ‘Panama Papers’ episode had driven home the potentially negative consequences of their actions.

“This leak and the damage it may do to the jurisdiction’s reputation points out the very serious and damaging potential consequences of the alleged local breach of data security,” Mr Turnquest said, “which occurred when private e-mails were leaked and read in Parliament, followed by specific threats of vengeful prosecution as political payback against specific persons.

“The Minister of Education’s (backed up by a PLP backbencher) admission to being in possession of the private banking details of citizens and international clients of professional firms is even more worrisome and potentially damaging.”

Referring to Hope Strachan, Mr Turnquest added: “We trust now the Minister of Financial Services understands our previous exhortation to counsel her fellow ministerial colleagues on their loose talk and actions concerning this sensitive [financial services] industry.”

Mrs Strachan did not follow Mr Turnquest’s advice yesterday, describing the massive document leak, in which this nation was named, as “disconcerting”.

She emphasised that the Bahamas continues to uphold its reputation as a compliant jurisdiction, operating under international regulatory guidelines.

    The 11.5 million Mossack Fonseca documents, obtained by the International Consortium of Investigative Journalists (ICIJ), listed the Bahamas as the firm’s third most-popular jurisdiction for company incorporations - 15,915, behind Panama and the British Virgin Islands.

    “This leak challenges the work and validity of international financial centres. We are following the development of this investigation closely,” said Mrs Strachan

“The Bahamas is a compliant jurisdiction operating under international regulatory standards. We continue to ensure that we do everything to remain complaint  and to sustain our reputation as a premier financial centre.

“We consistently demonstrate our commitment to international tax transparency as well as anti-money laundering and the countering of financial terrorism.”

    Mrs Strachan said the Bahamas has been deemed compliant by the Organisation of Economic Cooperation and Development’s (OECD) Global Forum on Transparency and exchange of information for tax purposes.

“We continue to ensure that we are a clean and reputable jurisdiction in which to conduct financial services,” said Mrs Strachan.

She was backed on this assertion by Mr Turnquest, who said yesterday: “As a jurisdiction, it is my belief that the Bahamas remains a well-run and compliant jurisdiction.

“These leaks, however, point out how very important it is for all intermediaries to be vetted to ensure that the same strict standards practiced within the jurisdiction are maintained by those introducing business to the Bahamas.

“While this [the Panama Papers] does not point out any wrongdoing by local financial institutions, it points out the vulnerability of the jurisdiction to be used unwillingly as a safe harbour for illegally gained proceeds.

“It should also heighten our vigilance for the consistent application of international best practices necessary to ensure compliance standards and data security is maintained at all levels.”

Mr Turnquest said that the constant barrage of international regulatory initiatives since the turn of the century had weakened the Bahamian financial services industry, and “made it - and our economic viability - vulnerable”.

Good-paying jobs have been lost, while institutions also exited the Bahamas.