The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An outspoken QC yesterday argued that “the rationale for the Non-Profit Organisations Bill does not exist” because no such Bahamas-based group operates using foreign currency.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that local non-profits were virtually useless to money launderers, terror financiers and other financial criminals because they conducted business in Bahamian dollars that were not a readily convertible currency.

With Bahamian dollars next-to-useless for financial crimes, Mr Smith argued that the bill’s reason for being - to combat such offences - does not apply in the Bahamian context.

Hinting strongly that the bill will face lawsuits and legal challenge whenever it passes, and in whatever form, he added that it violated numerous provisions in the Bahamian constitution including the right to privacy and freedom of association.

“I am pleased that the attorney general [Carl Bethel QC] is engaging in a more realistic consultation exercise,” Mr Smith told this newspaper, following his meetings with the Christian Council, churches and Civil Society Bahamas on Friday.

“This is what the Government should have done in the first place. This bill is not an imperative for satisfying the Organisation for Economic Co-Operation and Development (OECD) and European Union (EU), as the attorney general has admitted.”

The well-known QC continued: “It is regrettable that the Government finds itself so eager to violate people’s financial and other constitutional provisions. The restrictions imposed by the current draft are in breach of our constitution and freedom of association.

“It’s a breach of the constitutional right to privacy, and it is completely unnecessary to prevent money laundering. The rationale for the bill does not exist. No non-profit in The Bahamas I know of operates in foreign currency. And how many people are money laundering in Bahamian dollars?

“You can’t money launder in Bahamian dollars. Money laundering and terrorism financing necessarily involves US and other foreign currencies which are easily convertible internationally. No one wants Bahamian dollars that non-profits in The Bahamas operate with,” Mr Smith argued.

“The rationale for this legislation as somehow preventing terrorism financing and money laundering is a misconception, and the Government is trying to pull the wool over the eyes of the Bahamian people.”

The Government, though, is likely to vehemently dispute Mr Smith’s analysis even though it has already acknowledged that the main motivation behind the Non-Profit Organisations Bill is to bring the sector - and, by extension, The Bahamas - into compliance with global standards in the fight against financial crime.

Mr Bethel, the attorney general, previously confirmed Tribune Business revelations that the Financial Action Task Force (FATF), which recently placed The Bahamas on a monitoring or ‘watch’ list because of “structural deficiencies” in its anti-financial crime defences, was particularly vexed about this nation’s minimal to non-existent regulation of non-profit entities.

The Government will likely counter Mr Smith’s argument by saying many Bahamians non-profits are likely to receive donations in foreign currency from outside sources. And there is also the possibility that some may engage in activities, and be involved with issues, outside The Bahamas will conducting no activities in this jurisdiction.

But Mr Smith, who is also legal director for the high-profile non-profit, Save The Bays, yesterday told Tribune Business that litigation was highly likely should the Government proceed with the Non-Profit Organisations bill even if was substantially revised prior to returning to Parliament.

“I can guarantee that in whatever form this Bill finally passes, it will be strongly challenged over invasion of privacy, breach of our rights to freely associate,” he blasted. “I am dismayed by the extent to which my government seems to freely enact regressive and unconstitutional legislation.

“I urge them to stop, because when the FNM is no longer in power, the legislation which they have passed will be used to annihilate freedom of expression and privacy. Therein lies the mischief with this kind of legislation; it’s potential for abuse.”

Legal action from the church is especially likely, given that it appears to be on a collision course with the Government over its demands to be completely exempted from the Bill’s provisions.

Mr Bethel on Monday told Tribune Business that the Government believes it has “accommodated 80-90 percent” of non-profit concerns over plans to regulate the sector, having agreed to make the legislation less onerous and “more user friendly”.

Speaking following his meeting with the Christian Council and church leaders on Friday, Mr Bethel said they cited one other jurisdiction that had developed a law exempting the church from such regulation, arguing it has established a precedent to justify their demands.

The attorney general, though, described the church’s viewpoint as an “unsustainable position”, adding that the information he possessed contradicted their assertions. While agreeing that one country had drafted such a law, he added that it never been brought to Parliament or passed on to the statute book.

“What we have done is drafted a series of amendments that will remove the bulk of their concerns, save for this one issue of complete exemption for the church,” Mr Bethel told Tribune Business, “which in my view is not a sustainable position. But we’re assessing to see what other jurisdictions did with it.

“The church is seeking either a complete exemption, and they are saying there is some law in one other jurisdiction that enabled them to do so,” the Attorney General added. “My information is that it is not accurate that there is any law in any jurisdiction that gives an exemption to the church.

“One jurisdiction drafted something along those lines, but it was not tabled in Parliament. There is no jurisdiction that has done that. I’ve asked for a copy of that legislation but can’t get it because it was only a draft and never passed into law.”