The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Attorney General yesterday said The Bahamas must address alleged deficiencies in its economic substance reporting regime to escape the European Union's (EU) tax blacklist.

Ryan Pinder KC, speaking during the Senate debate on reforms to the Commercial Entities (Substance Requirements) Act and the Register of Beneficial Ownership Act, said the former legislation took effect in January 2019. However, at the end of 2021 shortly after the Davis administration took office, the Government received notice from the EU that there were “deficiencies" with the Act's implementation.

“In November 2022, the EU added The Bahamas to its list of non-cooperative jurisdictions," he recalled. "It has taken until now to be able to satisfy the OECD (Organisation for Economic Co-Operation and Development) and the EU of compliance with the economic reporting standards because of the grave level of non-compliance that we met on coming to office."

Mr Pinder argued that it was "non-compliance that was perpetuated by poor decisions of the former FNM administration". He reiterated previous assertions that the economic substance reporting portal was “not interactive", while the data accumulated needed to be vetted and reviewed manually, and was not freely accessible in digital format through the portal.

“We had to build a new and operational enforcement division, so we could demonstrate that not only we have the necessary laws and the necessary reporting mechanisms, but we also have the ability and actually inspect for compliance and enforce when there is non-compliance. All of this had to be developed and put in place, and operate to demonstrate compliance to be removed from the EU listing," Mr Pinder said.

“The Bahamas has achieved what only one of six countries in the world have achieved, obtaining compliant or largely compliant ratings in all 40 of the Financial Action Task Force )FAYF) recommendations for the prevention of money laundering and terrorist financing. This is an achievement that we as a country do not celebrate enough.

“Despite the inequitable treatment of small international financial centres in the Global South, such as The Bahamas, we have achieved a level of excellence that most countries in the Global North and members of the OECD have not achieved. To keep this standard of regulatory excellence requires continued development, tweaking and modifications to our regime to keep consistent with international best practices.”