The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Bahamas plans to potentially approach the International Court of Justice (ICJ) with the argument that multiple blacklistings have breached its citizens’ human rights, it was revealed yesterday.

Ryan Pinder KC, the attorney general, in giving the opening address at the Central Bank’s fifth anti-money laundering research conference, disclosed that the Government has formed a “working group” to determine the economic damage that The Bahamas has suffered from the attacks on its financial services industry over the past two decades.

Arguing that “arbitrary” initiatives by the likes of the European Union (EU) and Organisation for Economic Co-Operation and Development (OECD) have undermined this nation’s “right to development”, he added the first set of ‘blacklistings’ in 2000 were estimated to have then cost The Bahamas a combined $35m in penalties and monies diverted away from other critical areas in the public sector.

Suggesting that sum would amount to $61.931m in 2023’s money, due to the impact of inflation over the intervening 23 years, Mr Pinder said he had previously called for a “cost/ benefit analysis” to be conducted on the impact of financial services blacklistings for The Bahamas as they inflict “extraordinary economic damage” on developing nations.

“I do not see this economic analysis of inequitable, arbitrary and unilateral blacklists on this conference’s agenda. Honestly, I am not surprised,” he added. “Allow me, however, to foreshadow what we are doing in this regard, taking it out of the intellectual debate arena and taking the issue to the United Nations (UN).

“The right to development is an inalienable human right entitling every individual and all peoples to participate in, contribute to and enjoy economic, social, cultural and political development. Central to this right is the full realization of peoples’ self-determination, including sovereignty over their natural wealth and resources. We believe that the blacklist exercise has breached our fundamental right to development.

Mr Pinder said “blacklisting poses multi-faceted challenges to The Bahamas’ ability to fully realise and enjoy the right to development”, including penalties and others costs that “divert funds away from essential areas”. He pegged this impact in 2000 alone, the first time when the country was ‘blacklisted’, at $35m.

That year saw The Bahamas hit by a triple whammy of a Financial Action Task Force (FATF) blacklisting, due to deficiencies in its anti-money laundering and anti-financial crime regime; the OECD’s ‘harmful tax practices’ initiative; and the then-Financial Stability Forum’s further regulatory concerns.

Turning to other impacts, Mr Pinder identified the “high risk profile of the jurisdiction” that is created. “The risk profile of The Bahamas is increased to high when we are placed on adverse listings,” he added.

“The impact of this on the financial environment results in job losses, reduced financial institutions and foreign investment, penalties such as withholding taxes and time-consuming procedures for opening bank accounts, impacting the stability of the financial sector.”

Then there was the effect on The Bahamas’ ability to mitigate the impact of cli- mate change and recover from natural disasters. “As a small island developing state (SIDS), low-lying nation and big ocean country, The Bahamas faces vulnerability to natural disasters,” the Attorney General added.

“Blacklisting hampers access to international finance, for instance, from international insurers for disaster recovery, affecting multiple human rights, including the right to life, adequate housing, water and sanitation, food, health, work, livelihood, and the rights of displaced persons.

“These are just some examples of where our right to development has been affected. We have formed a working group to evaluate the damage done over the years because of blacklist, and look to pursue the issue as a breach of our human rights with the United Nations and possibly with the International Court of Justice (ICJ).”

The ICJ has recently been hearing South Africa’s claim that Israel is committing genocide against Palestinians through its attacks on the Gaza strip. Meanwhile, Mr Pinder added: “The United Nations has appointed a special rapporteur on the right to development who plays a pivotal role in addressing these challenges.

“We will be engaging with the special rapporteur to assist in the presentation of findings and recommendations to the Human Rights Council. This mechanism holds governments accountable for the impact of blacklisting on the right to development. We look forward to further collaboration with our global partners and the United Nations on this matter.

“Countries like The Bahamas make up the vast majority of blacklisted countries, former colonies of European imperialists. Of the 65 jurisdictions grey- listed or blacklisted by FATF from 2010 to 2020, none are in the Group of Seven industrialised nations while only two, Argentina and Turkey, are in the Group of 20,” he continued.

“The vast majority hail from the global south, and 28 rank in the bottom half of economic output as measured by GDP. This is further demonstrated during the period, after the Paradise Papers, the EU’s code of conduct group blacklisted 17 countries. Not one Euro- pean country was listed; they all got a free pass.

“In February 2019, the EU published an updated version of their anti-money laundering/counter terror financing list.

“Again, not a single European country was listed. In 2022, the EU identified jurisdictions with strategic deficiencies in their anti- money laundering/counter terror financing regimes that pose significant threats to the financial system. Why is not a single EU member country or their most influential trading partners listed?”

Mr Pinder also voiced fears that the EU’s creation of its own anti-money laundering body will “undoubtedly will bring more confusion to the regulatory landscape” by undermining uniformity in global standards and the FATF’s role in setting them.

“I recognise that the current scope is to monitor financial firms in the EU, and not necessarily state obligations.

“This is just the beginning, however. Given past practices the EU will undoubtedly expand their reach in evaluating other states on compliance with EU standards,” he said.

“I again call on the FATF to be diligent in its advocacy that it is the only globally recognised body to regulate the implementation and enforcement of anti-money laundering regimes in states around the world.

“If not I am sure those like The Bahamas, who will be singled out, will have to again approach the United Nations just as we did for tax matters.”