The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The opposition’s deputy leader yesterday slammed the “outrageous” blacklisting of The Bahamas’ by the European Commission as he urged the government to stop “kowtowing” in the face of such threats.

Chester Cooper, responding to reports that the commission, which is effectively the 27-nation European Union’s (EU) civil service, intends to cite The Bahamas and 11 other nations for alleged weaknesses in their anti-financial crime regimes, called on the Minnis administration to stop undermining the financial services industry by appeasing such demands.

“It is outrageous that the European Commission would seek to unilaterally levy heavy-handed sanctions by way of another blacklist. It is even more concerning that these attacks continue amidst the COVID-19 crisis. Though there have been various legislative reforms undertaken, institutions continue to shed jobs and leave The Bahamas,” Mr Cooper said.

“This action threatens our competitiveness compared with our peers. We note the surprise expressed by the attorney general in the face of legislative responses to the Financial Action Task Force (FATF), and the opening of an embassy in Brussels, in order to address these types of matters diplomatically before they are decided. We would like to understand from the government how proactive this embassy has been in communicating with the European Commission.”

Suggesting that the government had pursued a “failed strategy” of always seeking to comply with the EU and other international bodies, Mr Cooper said, “We must protect what remains of our financial services centre and the livelihood of the middle class. In the face of these threats we must continue to create innovative products, and a clearly-defined strategy to maintain the industry.”

Mr Cooper also called on the government to address any outstanding requests by the EU for legal co-operation on both anti-money laundering and tax matters, and comply with all previous commitments made to Brussels.

He said: “In view of these harsh actions, will the government also confirm whether they have responded to all requests - and complied with all previous commitments - made to the EU? We urge the government to collaborate with our counterparts in the international financial services jurisdictions, and seek assistance from our friends in the international community to curb these attacks.”

According to the Reuters news agency, The Bahamas is among 12 countries set to be named on a European Commission blacklist that will be formally unveiled today. Others set for inclusion include Panama, Barbados, Jamaica, Mauritius, Botswana, Cambodia, Ghana, Mongolia, Myanmar, Nicaragua and Zimbabwe.

All were said to “pose significant threats to the financial system of the [EU}”, and the 27-nation bloc’s financial institutions are being called upon to apply greater scrutiny and due diligence to transactions involving The Bahamas, its businesses and residents, as well as those in the other nations.

Reuters frequently appears to be given advance notice of such EU moves - possibly as part of a strategy to unnerve the nations being targeted. The blacklisting, if it comes to fruition, will threaten to increase the time and costs involved in conducting business between The Bahamas and Europe, again undermining the country’s competitiveness in those markets.

While the impact on The Bahamas’ vital correspondent banking relationships may not be as pronounced, given that most of this nation’s international transactions clear through the US, a non-EU-member, the commission’s action will also cut across the recent changes The Bahamas made to its Investment Funds Act to secure that sector’s access to European markets.

Above all, the European Commission action will again place an unwanted stain on The Bahamas’ reputation at a time when it can least afford it.