The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The DNA’s leader yesterday expressed fears that investors would view the Bahamas “with jaundiced eyes” following the Panama Papers-style data ‘leak’, and added: “We can’t afford any more reputational damage.”

Branville McCartney told Tribune Business he was “taken aback” by revelations that the International Consortium of Investigative Journalists (ICIJ), and its media members, had obtained 1.3 million documents from the Registrar General’s Department’s companies registry.

These documents are said to contain information on 176,000 Bahamas-domiciled companies, trusts and foundations, and Mr McCartney expressed concern that the fall-out from their publication would further undermine an already-declining financial services industry.

“Oh my God; I’m just taken aback hearing it,” Mr McCartney told Tribune Business of the ICIJ ‘leak’. “We can’t afford, as a country, to have more damage done to our international reputation. This, of course, doesn’t help.”

He added that the publication of the ‘leaked’ documents created “tremendous concern”, not only for the Bahamas but also for its international clients and investors doing business in this nation.

“This certainly doesn’t help our number two industry, which has been in decline for some years now, and continues to decline,” the DNA leader added.

“It seems as if everything is coming at us from an international perspective. It’s very, very concerning as, of course, it affects all of us. Notwithstanding your political affiliation, it affects the Bahamas as a whole.

“It’s not good news. As a person who does business and has investments in this country, it’s most concerning.”

Mr McCartney said his main fear was the fall-out impact on investor perceptions of the Bahamas as a safe and secure place to do business, and particularly whether their personal data and legitimate privacy concerns were protected.

“I fear the repercussions with the foreign direct investors who, looking at this, could have second thoughts on the Bahamas,” he told Tribune Business.

“That trickles down to the local investors, because there’s less foreign direct investment coming in. We are at a standstill now in that regard, and this certainly doesn’t help one bit.

“A lot of that has to do with the lack of transparency and accountability by our government. But now investors can look at the Bahamas with an even more jaundiced eye, have second thoughts and go elsewhere. This seems to be a blow.”

Exacerbating the data security concerns is the fact that the breach appears to have come from within one of the Government’s own agencies, and Mr McCartney suggested that the episode would take the financial services industry “down another notch”.

“The international community is saying that we’re not compliant and that we’re a tax haven,” he told Tribune Business. “That frightens away people who want to do legitimate business in the Bahamas.

“It’s a double whammy against us. Persons reading this are going to be looking elsewhere, whether it’s true or not. They’re going to reconsider doing business here.”

Paul Moss, president of Dominion Management Services, a Bahamian-owned financial services provider, suggested yesterday that this nation could ease international concerns by requiring all International Business Companies (IBCs) to start filing the names of their shareholders/officers with the companies registry.

One of the key complaints voiced by the ICIJ and its members, such as The Guardian newspaper in the UK, is that this nation lacks a public register of all beneficial owners of Bahamas-domiciled entities.

Mr Moss acknowledged that the likes of the G-20, European Union (EU) and OECD had been pushing for this, given that the likes of the Cayman Islands and Jersey had bowed to such demands. The latter two, though, are UK Crown dependencies, whereas the Bahamas is an independent, sovereign nation.

Bahamian financial services regulators are able to access beneficial ownership information through their intermediaries and registered agents. Yet Mr Moss suggested that a central ownership registry that was placed “under lock and key” might be something this nation has to consider, notwithstanding privacy rights that are enshrined in the Bahamian constitution.

The ICIJ and the UK’s Guardian newspaper were both critical of the Bahamas’ companies registry, especially its online functions. Mr Moss agreed with these concerns, telling Tribune Business: “I think that the system they have there is not really optimal. I prefer the old system of carrying in the documents.”

The former said: “The information in the online registry maintained by the Bahamian government is often incomplete.

“In addition, retrieving one company’s documents will cost at least $10, in conflict with the recommendation of the international association of company registries, which discourages search fees.”

The Guardian, for its part, wrote: “The Bahamas claims to be a transparent jurisdiction with a public register of companies, but the information shared from the seat of government in Nassau is limited.

“The corporate registry is supposed to contain the names and addresses of all directors and officers, and can in theory be consulted online, but there is no requirement to register the owners of a company with the authorities. Unlike the Cayman Islands and Jersey, the Bahamas has not responded to public pressure to introduce government-held registers of beneficial owners.”

The UK newspaper continued: “The Bahamas registry website is often unavailable, and the information it contains is patchy. Neelie Kroes [a former EU commissioner], for example, does not appear in the online entry for the company of which she was a director. Complete information can often only be obtained by phone and fax or a visit in person.

“Importantly, it is not possible to search for names of individual directors, but only by company name, which can make wrongdoing hard to track.”

Hope Strachan, minister of financial services, in her only comment following the ICIJ revelations, said in a statement: “The Bahamas remains committed to the transparency of its corporate registry.

“The data required by law to be maintained in the corporate registry is available to the public. The Bahamas is committed to the Registrar General’s Department transitioning to an entirely online service that meets international standards. This transition commenced in 2016 with the advent of the online companies registry.”