A compendium of bills that will establish new regulations to govern the financial services sector in The Bahamas was passed in the House of Assembly last night.
The bills include the Register of Beneficial Ownership Bill, the Commercial Entities (Substance Requirements) Bill, the Removal of Preferential Exemptions Bill, the Penal Code (Amendment) Bill and the Non-Profit Organizations Bill.
The bills will bring the country in line with rules set by the Organisation for Economic Co-operation and Development (OECD) and the European Union (EU), which have threatened to blacklist The Bahamas.
Deputy Prime Minister and Minister of Finance Peter Turnquest, who led debate on the bills, said they represent another plank in The Bahamas’ tax transparency regime and send a message to the international business community, including the EU, that The Bahamas is open for legitimate business.
“All countries around the world, from big to small, are faced with the same challenges,” Turnquest said.
“The G20 through the OECD and the EU as a bloc, have converged to establish these rules, with the power of financial and trade sanctions and penalties that would make it very difficult for countries to operate, even outside of the financial services sector, if we are blacklisted.
“Such blacklisting, even without the prospect of penalties, causes reputational damage that concern existing and potential investors and can significantly harm our economic stability, growth prospects.
“These are untenable risks for a young country with high debt, high unemployment, limited human and physical capacity.”
Turnquest said the bills seek to preserve The Bahamas’ position as a “significant global financial services center”.
The Commercial Entities (Substance Requirements) Bill requires companies in The Bahamas that engage in banking, insurance, fund management, financing and leasing, shipping, distribution or service center operations, to demonstrate that they have a substantial economic presence within The Bahamas and that they engage in real economic activity.
The Removal of Preferential Exemptions Bill abolishes preferential tax regimes for certain categories of companies or entities, namely, “tax preferences afforded to non-residents that are not afforded to residents”.
The Register of Beneficial Ownership Bill establishes a secure and searchable database of the ownership details for all legal entities registered in The Bahamas. The database will only be accessible by a designated person from a secure location in The Bahamas.
The Non-Profit Organizations Bill seeks to regulate non-profit organizations and mandates that each organization registers with the government and provides, among other things, evidence of its gross annual income, the identities of its members and evidence of know your customer compliance. The bill also mandates that NPOs report donations of $50,000 or more as well as its 10 largest donations.
The Penal Code (Amendment) Bill makes it a crime to willfully defraud the government or a representative of the government in relation to the collection of general revenue.
In his presentation, Exumas and Ragged Island MP Chester Cooper said he believes “our very way of life is at stake and our sovereignty is under threat”.
“Will we continue to be the poster child for the bogeyman-filled nightmares of the world’s economic powers that seek to beat us into submission?” he asked.
He continued, “We are here because for some reason, the world’s largest economies, nations whose wealth affords them the ability to build empires, somehow perceive us as a threat.
Minister of Financial Services, Trade and Industry and Immigration Brent Symonette said the bills are good for the country.
“This has been a year of immense drafting, immense negotiations, immense discussions, not only between the government, but also the private sector, to cut out and to bring into effect this compendium of bills here today that we think is the best for The Bahamas.”