Bahamas Slips In Half OECD ‘Peer Review’ Criteria
The Bahamas slipped slightly in its latest OECD “peer review”, although it maintained its “largely compliant” ranking amid beneficial ownership and tax information exchange concerns.
The just-released full Organisation for Economic Co-Operation and Development (OECD) report, produced by its Global Forum on transparency and tax information exchange, showed The Bahamas had slipped in give categories compared to the last review in 2013.
Whereas it was rated “compliant” on access to information; its network of tax information upon request treaties; confidentiality; and the quality and timeliness of responses to requests and information five years ago, these had all slipped to ‘largely compliant’ in the 2018 Review.
And, when it came to the ‘availability of beneficial ownership and identity information’, the Bahamas had fallen from ‘largely compliant’ to ‘partially compliant’. This suggests that the OECD Global Forum, as well as the Financial Action Task Force (FATF), is a source of pressure for the Bahamas to create a centralised Beneficial Ownership Registry.
The Ministry of Finance, in a statement issued yesterday, hailed the OECD ‘Peer Review’s’ overall ‘Largely Compliant’ assessment for “reinforcing the Bahamas’ status as a well-regulated jurisdiction within the international financial services community”.
It added: “The Bahamas has once again maintained a high standard of compliance in the most recent peer review report of the OECD Global Forum, demonstrating that the jurisdiction adheres to international standards and best practices.
“The Bahamas, as a member of the Global Forum, will continue its proactive approach to international compliance and reputational management within the global community.”
The Ministry said the latest ‘Peer Review’ focused on beneficial ownership and transparency with respect to exchange of information upon request, and said it had since taken further steps with its signing of conventions committing the Bahamas to the OECD’s automatic tax information exchange standard.
“The Ministry of Finance intends to address further recommendations put forward in the report,” although it have no details, and did not mention the Bahamas’ slippage in five out of 10 – or half – of the criteria used to assess this nation.
Summarising its concerns, the OECD report said: “The key issues where improvement is needed relate to the availability of information…… Regarding the availability of beneficial ownership information, the monitoring of the legal obligations is mostly adequate but some of the relevant entities and arrangements are not covered by these legal obligations.
“It is recommended that the Bahamas ensures a requirement to have beneficial ownership information in respect of all companies incorporated under the Companies Act and all general partnerships.”
The ‘Peer Review’ said it had also identified “some deficiencies” in the beneficial owner identification regime for entities supervised by the Securities Commission and Compliance Commission, while “the availability of reliable accounting information is also not consistently monitored in the Bahamas”.
The report added that the Bahamas performance had “dropped” since 2013 when it came to obtaining and exchanging tax-related information. It cited “longer response times” to requests from other countries and “not taking adequate measures expeditiously in a number of cases where information was not produced”.
