The Bahamas has finally been removed from the European Union’s (EU) grey list after having satisfied enough of the global financial sector watchdog’s reforms on tax governance and tax matters, a press statement from the Ministry of Finance revealed.
Guardian Business revealed last week that The Bahamas might be removed from the list. Deputy Prime Minister and Minister of Finance Peter Turnquest told reporters yesterday that the government passed a final piece of legislation two weeks ago dealing with collective investment vehicles and transparency, leading the EU to find the country reformed enough to remove it from its list of uncooperative jurisdictions.
Turnquest said local teams have been working tirelessly with the international community and regulators to achieve this result.
“This is a significant achievement and we’re very happy that we’ve finally been able to demonstrate that we are cooperative… that we are responsive to the international community and international standards,” said Turnquest.
“We have been saying to the international community that we are partners in this overall fight of global terrorism financing with anti-money laundering initiatives and with the exchange of information for tax purposes.
“We want to be partners in this community of financial regulators, and as long as we have communication and we know what the expectations are and we know what the standards are, The Bahamas will and can rise to the occasion and meet the standards. And that’s what we have demonstrated here today.
“Once we knew what the issues were, we dealt with them and dealt with them expeditiously.”
Turnquest said this move by the EU is important for The Bahamas’ financial services industry and the protection of the middle class, especially as the financial services sector is the second biggest economic pillar for the country.
“For all of our partners, this is the message we want to send: that The Bahamas is fully committed to the overall regulation of the industry,” he said.
“We are a premier financial services jurisdiction and we protect that jealously because we know what that means in terms of our GDP and the overall protection of our middle class in particular.
“So, this is a very significant achievement. It will certainly bring confidence to the industry here in The Bahamas, as well as those financial services providers and clients that are looking at The Bahamas as a jurisdiction for the management of their wealth.”
Last year the EU placed The Bahamas on a grey list until the country addressed the body’s concerns on economic substance, the removal of preferential exemptions, and the automatic exchange of tax information.
“We are completely compliant with all of the requirements that were put to us,” Turnquest said.
The Ministry of Finance statement explained that over the past year the government’s team of technical advisors had many meetings with the EU’s Code of Conduct Group to ensure it was making the necessary steps to become a compliant jurisdiction.
“The Bahamas has worked diligently to demonstrate its commitment at the highest political level to international standards on information exchange, tackling harmful tax practices and dismantling artificial tax structures. On behalf of the government, I thank the staff, agencies and industry stakeholders that worked so hard to achieve this result. Your support, encouragement and technical skills have been invaluable in this process and prove once again, we can rise to any challenge,” Turnquest said in the statement.
“All of our critics should see that the EU’s statement today clearly counters the view that The Bahamas is not doing its part in the global effort to stop financial crimes such as tax evasion and money laundering.”
Meantime, other changes could come from other international bodies like the Organization for Economic Cooperation and Development and the Financial Action Task Force, that force more legislative changes. Turnquest said last week that government is keeping an eye on those possible developments.