Bahamas “largely compliant” says OECD Tax Policy Director

The director of the Organization for Economic Co-operation and Development’s (OECD) Centre for Tax Policy and Administration, Pascal Saint-Amans, has praised The Bahamas for its “tremendous progress” in adopting Foreign Account Tax Compliance Act (FATCA) standards and paving the way for automatic exchange of information between the US and The Bahamas.

Speaking at an afternoon luncheon held on Thursday, August 20th, 2015, during a day filled with meetings with government officials, including the Prime Minister, Mr. Amans expressed his confidence in The Bahamas’ ability to comply with the strictest international standards, highlighting its commitment to complying with FATCA regulations for the reporting of all financial accounts by non-US persons and implementing a Tax Information Exchange (TIE) portal to expedite this process.

“You are largely compliant with the implementation of the existing standard, which is the exchange of information and requests. You have committed to the new standard – the exchange of information automatically, which you will implement as soon as 2018 and there is nothing else you can do for the time being. Even though there are some challenges with the implementation of the automatic exchange of information, you have done what you had to do.”

He also addressed the recent blacklisting of The Bahamas by the European Union (EU), making it very clear that the OECD did not endorse the inclusion of The Bahamas on any blacklist (in fact, The Bahamas is on the OECD’s whitelist):

“It is very unfair that The Bahamas ended up on the (EU) blacklist, which actually isn’t a list. It’s just a compilation of existing lists which are inconsistent.”

Echoing this sentiment was Minister of Financial Services, Hon. Hope Strachan, who also spoke at the luncheon. Minister Strachan expressed incredulity at The Bahamas’ placement on the EU’s list and emphasized her Ministry’s commitment to ensuring that The Bahamas remains compliant with the highest international financial standards for transparency.

“It is amazing that the Bahamas, which has been white-listed by the OECD and its fourth round mutual evaluation to be either wholly compliant or largely compliant with the criteria on tax information exchange and by the Caribbean Financial Action Task Force (CFATF) assessments of the Bahamas as being largely compliant with existing tax information and exchange and transparency standards, would be deemed as non-compliant with EU member countries.”

Despite the unexpected and seemingly unwarranted nature of the blacklisting, Minister Strachan stated that her ministry was actively engaged in pursuing a process by which the country could be removed from the EU’s blacklist.

“While many agree that the list is unfair and unfounded (including the OECD) and it has been rejected by most of the countries included on the list as having any credibility, we believe that to be included on any blacklist has a potentially negative impact, and the Bahamas is actively pursuing measures to be taken off the list.”

Minister Strachan noted that The Bahamas does not intend to rest on its laurels where international financial standards are concerned and is always seeking to maintain the standard of excellence that has defined the local financial services industry in recent years.

“It is my Ministry’s intent to continue to collaborate with industry stakeholders to develop new products, implement and amend policies which allow for the ease of doing business and to adhere to global compliance standards in order to strengthen the financial services industry in The Bahamas as we maintain our position as leaders in the region.”

She ascribed the proactive approach of her ministry to being a part of the broader picture of creating a “stronger ministry, a stronger industry and a stronger Bahamas. “