Business

Bowe: Pandemic may lessen severity of looming blacklisting

Although the COVID-19 pandemic may be a part of the undercurrent keeping The Bahamas on the European Union’s (EU) blacklist of countries with strategic anti-money laundering/countering the financing of terrorism deficiencies, a top figure in the financial services sector said the pandemic could also possibly reduce the severity of the listing’s impact.

Chief Executive Officer of Fidelity Group Gowon Bowe said while it is never a good thing to be on a blacklist, it’s similar to being kicked while you’re already down.

“This is one of those situations where you’re already in pain and someone sticks a needle in you and you feel nothing. We have a situation where all countries around the world will now be looking for how they protect and maximize their tax dollars, and whether they do it in an overt or clandescent manner they are going to seek to prohibit any kind of movement of their tax dollars outside of their country. On a blacklist or not on a black list is probably a red herring because the actions will be the same,” he told Guardian Business yesterday.

Although the government has passed the majority of necessary legislative reforms needed to remain compliant with the EU and the Financial Action Task Force (FATF), a missed onsite regional assessment, which was supposed to take place last month, will likely lead to the country remaining on the EU’s blacklist when it meets on October 1.

The assessment didn’t take place as planned because of the resurgence of COVID-19 and associated travel restrictions.

“The pandemic has actually reduced the severity of blacklistings, at least even for a temporary period of time. The reason why I say that is all countries around the world, whether they be Organisation for Economic Co-operation and Development (OECD) European Union countries, are now in a state of having to reassess their own fiscal affairs. And so, what we are going to find, certainly going into the next 12-18 months, is that even countries that were more accommodating of fair play are going to have very selfish motives that are going to drive their decisions,” Bowe said when asked about the overarching implications of the blacklisting on the financial services sector.

“And so, the listing on the blacklist is actually probably in our point of view more favorable because it will at least highlight that they have done something official that we should be able to address and respond to in a methodical manner, versus what I suspect would be some very clandescent moves in order to have the same impact of trying to avoid any leakage or slippage of their tax revenues in the domestic countries.”

His comments were not to say that The Bahamas should dismiss the blacklisting, Bowe clarified, but to say it is better for this jurisdiction to pause and look at the long term plan for the industry.

“The FATF, having labelled us as one of the countries that is more susceptible to AML/CFT, has provided the excuse to the countries that wanted to keep us as being labelled as uncooperative,” he said.

“And while the visit from the FATF is a key component, there are several factors we have to bear in mind.”

The first point, Bowe said, is that the FATF visit in and of itself does not guarantee that its report would be as favorable as the government expects it to be.

“And that’s not to be negative, that’s only to say that we first have to ensure that we have met not only all written obligations and expectations, but even the unwritten ones in order to satisfy those in the FATF, which for all intents and purposes is comprised of the very countries that are going to put us in these negative categories,” he said.

“Secondly, even with a successful FATF visit, it doesn’t change the root of what these countries are seeking to do, which is to close the loopholes that allow their tax dollars to be parked in offshore jurisdictions and international financial centers like The Bahamas. And so, while the AML/CFT cover gave them an official stance on what they wanted to do, if that for some reason is removed even without qualification then there will be other elements that arise.”

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Paige McCartney

Paige joined The Nassau Guardian in 2010 as a television news reporter and anchor. She has covered countless political and social events that have impacted the lives of Bahamians and changed the trajectory of The Bahamas. Paige started working as a business reporter in August 2016. Education: Palm Beach Atlantic University in 2006 with a BA in Radio and Television News

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