Among wider reforms, Bahamas pledges to enact beneficial ownership bill by year-end

The Bahamas has drafted new legislation to ensure the jurisdiction achieves the right balance of business, economic sustainability, and compliance with international standards.

Uppermost among the Bahamas’ priorities include compliance with the OECD and EU criteria on tax governance which has led to the Bahamas implementing sweeping changes to the legal and regulatory regimes that govern its financial sector.

Peter Turnquest, the Bahamas deputy prime minister and minister of finance, set out a raft of new measures for the sector:

• The passing into law the Multinational Entities Financial Reporting Act, which sets out a comprehensive framework for Country by Country reporting in line with the BEPS Action 13.
• The initiation of Automatic Exchange of Information “AEOI” with 35 jurisdictions (19 of which are EU jurisdictions), in accordance with the Common Reporting Standard.
• Drafting the Commercial Entities (Substance Requirements) Bill, which addresses EU concerns with respect to entities having economic substance.
• The enactment of the Beneficial Ownership Register Bill before the end of the year.

Addressing members of the Bahamas Financial Service Board at its annual meeting last month, the deputy prime minister said: “I contend that we must now show consumers, both domestic and international alike, that what we can offer them is innovative digital products, real-time transactions underpinned by impenetrable cyber-security that they can literally control from their fingertips, through smart devices and other online platforms.”

Turnquest continued: “This will enhance the service that we provide to our consumers and improve the perception of The Bahamas in the eyes of the international standard setters.”

He noted that disruption has become commonplace in the industry. “The industry faced the disruption that was the OECD AML/CFT Blacklist in 2000. The industry faced the disruption that was the Global Financial Crisis in 2008/2009. The industry faced the disruption that was the de-risking phenomenon in 2015 and we once again face a disruption in the form of the ongoing threat of EU blacklisting,” he said.

“These laws will make The Bahamas the bellwether for other jurisdictions to craft their response to the EU’s threat,” said Turnquest.

The deputy prime minister also noted that the increased focus on financial inclusion and fintech – two prevailing trends in the global financial landscape – is vital to the sustainability of the Bahamian financial sector. “The benefits of financial inclusion are not only significant for individuals but for economies as well. Inclusion helps drive economic growth and supports poverty alleviation and crime reduction,” he said.