Ownership Registry Is ‘Not Set In Stone’

Attorney General Carl Bethel QC. Photo: Terrel W Carey/Tribune Staff

Legislation to create a central Beneficial Ownership Registry is “not set in stone”, the Attorney General has revealed, with the Government seeking “urgent” consultation on the issue.

Carl Bethel QC, addressing a Bahamas Financial Services Board (BFSB)-sponsored seminar, said the Register of Beneficial Ownership Bill 2018’s recent tabling in the House of Assembly allows this nation to be proactive and get ahead of the international regulatory initiatives it faces.

He added that its tabling also signalled “the urgency for the administration to have a meaningful consultation on this issue” with members of the Bahamian financial services industry.

“It is not set in stone. The Bill that we tabled is there for your review. It is there for your input and we will determine whether to proceed with the Bill, to amend the Bill, to shelve the Bill (or) to come with some other structure or arrangement,” Mr Bethel said.

“But, at the end of the day, the message that I have to say is that we cannot only look at one of the several initiatives and feel that, if we satisfy them, it’s going to satisfy all. These are interrelated and co-ordinated initiatives being orchestrated through various organs in the European Union (EU), particularly, and they must all be addressed simultaneously and comprehensively, and not believing we can bunker into one and satisfy that and that that is going to satisfy the rest.”

The Bill, as presently structured, provides the legal authority for a so-called “Competent Authority” to establish and maintain an electronic database of beneficial ownership details for all corporate and legal entities registered in The Bahamas.

It also permits a search of this database by a “designated person”, upon the request of a specified authority listed in the Bill. These authorities include the Attorney General’s Office, the Financial Intelligence Unit and the financial services industry regulators. The beneficial ownership registry, though, is not accessible to members of the general public.

Addressing the seminar hosted by the BFSB in collaboration with the Graham Thompson & Company law firm, Mr Bethel said the Beneficial Ownership issue was directly tied to the Financial Action Task Force’s (FATF) anti-money laundering and counter-terror financing drive.

He acknowledged that it was not directly linked to the Organisation for Economic Co-Operation and Development’s (OECD) BEPS (Base Erosion and Profit Shifting) initiative, which aims to combat tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax jurisditions.

Still, Mr Bethel said there is a “resonance between the two”. He added: “I speak about the “Concert of Europe”, which was a historical relationship, and event maybe 200 years ago. It is the same concert now in terms of co-ordination between powers, co-ordination of initiatives, co-ordination of the whole strategy.

“It’s one picture, one initiative, but in different forms [and], so even though BEPS isn’t obviously concerned with beneficial ownership, if you read the criteria notes, it starts off by saying that this is aimed and targeted at opaque offshore structures.

“So, what causes [those structures] to be opaque?” the Attorney General asked. “Lack of accessible beneficial ownership information; lack of information as to how this company in The Bahamas relates to that company in the Cayman Islands, relates to that company in Switzerland because the structural relationship between these entities all around the globe is opaque, and it is through the initiatives of beneficial ownership that they seek to clarify that opaqueness for their purposes.

“And so, even though beneficial ownership regimes are becoming a greater focus of the FATF, we can’t only believe it is only the FATF that requires clarity as to beneficial ownership and accessibility to beneficial ownership information.”

Mr Bethel said these initiatives began as early as 2014, when the G-20 group of nations endorsed the importance of financial transparency – particularly transparency of beneficial ownership – to prevent the misuse of corporate entities.

He added that The Bahamas, like many of its regional and global counterparts, is being forced to reposition a major part of their economies and grapple with the ever-changing and increasing world demands.

“This is a struggle that affects not only The Bahamas, but every country in this region and, indeed, every financial centre in the world,” the Attorney-General said. “I had reason at an earlier briefing to point to the travails similar to ours affecting a major centre known as Luxembourg, and it’s not just us, and I suppose we can take some small comfort in that.”