The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

THE FNM yesterday called for heightened vigilance to prevent money laundering and tax evasion in the wake of the international leak of the “Panama Papers”, a disclosure of millions of documents purporting to show how some wealthy people around the world hide their money.

The Bahamas, long considered a tax haven, was listed as one of the third most popular offshore financial destinations used by the law firm Mossack Fonseca, based in Panama, to hide the cash of their clients.

The FNM did not call for specific policy remedies to this issue.

“The Bahamas remains a well run and compliant jurisdiction,” the party said in a statement. “These leaks, however, point out how very important it is for all intermediaries to be vetted to ensure that the same strict standards practised within the jurisdiction are maintained by those introducing business to the Bahamas. While this report 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 heighten our vigilance for the consistent application of international best practices necessary to ensure compliance standards and data security is maintained at all levels.”

Nonetheless, the FNM noted that the Bahamas was blacklisted by the Organization for Economic Co-operation and Development (OECD) in 2000 for lax tax laws that attract people and companies seeking to evade tax payments in their home countries.

The FNM, while in office, subsequently reformed laws to address the perceived problems with the system.

“Subsequent to that defining period, continued compliance pressures and shifting goal posts from developed states has resulted in further tightening of internal regulations and scrutiny of financial accounts and transactions culminating in the FATCA legislation passed last year,” the FNM said yesterday. “All of these attacks on our second economic pillar have weakened the industry and made it and our economic viability vulnerable. We have seen the effects of this through withdrawal of some international banks and consolidations in others, which have resulted in the loss of well paying jobs.”

The FNM also sought to draw a comparison between the widespread leak that exposed how wealthy people sometimes hide their money to the decision of Education Minister Jerome Fitzgerald to read personal emails of Save The Bays (STB) members during a Parliament session several weeks ago, in response to what Mr Fitzgerald called a plot to destabilise the government.

“This leak,” the FNM said, “ 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 that occurred when private emails 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 private banking details of citizens and international clients of professional firms are even more worrisome and potentially damaging. 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 industry.”