In the wake of a "leak" of 1.3 million files from the Registrar General's Department, the Ministry of Financial Services has affirmed its commitment to "the transparency of its corporate registry". And as the "leak" was pounced on by the International Consortium of Investigative Journalists (ICIJ), Financial Services Minister Hope Strachan wonders why The Bahamas is being singled out for its choice to implement automatic exchange of information bilaterally.
The so-called leak put the details of 175,000 Bahamian companies, trusts and foundations registered between 1990 and early 2016 into a searchable online database, augmented by information from the "Panama Papers" leak.
The ministry issued a statement late Wednesday.
Said Financial Services Minister Hope Strachan, "The Bahamas remains committed to the transparency of its corporate registry. The data required by law to be maintained in the corporate registry is available to the public. The Bahamas is committed to the Registrar General's Department transitioning to an entirely online service that meets international standards. This transition commenced in 2016 with the advent of the online companies registry."
According to the ICIJ, the new information reveals previously unknown or little-reported connections to companies owned or run by current or former politicians from the Americas, Africa, Europe, Asia and the Middle East. Noting that aside from Mossack Fonseca and the Panama Papers, the leaked Bahamian files reveal details of the offshore activities of prime ministers, cabinet ministers, princes and convicted felons; the consortium acknowledged that it is generally not illegal to own or direct an offshore company, and there are legitimate business reasons in many cases for setting up an offshore structure.
"But transparency experts say it's important that public officials disclose their connections to offshore entities," the consortium said.
Challenged and threatened
Strachan gave opening remarks at the 2016 Nassau Conference, hosted by the Association of International Banks and Trust Companies (AIBT), and during an address about strengthening the jurisdiction's competitiveness asserted that the government of The Bahamas "is fully committed to maintaining a trustworthy, competent and compliant jurisdiction".
"We will not tolerate the use of The Bahamas' financial services sector as a conduit for the conducting of illicit or illegal activities. We are keenly aware of the challenges faced by international financial centers (IFCs) globally and the efforts to undermine the importance of small, successful financial centers like The Bahamas as well as some of our regional counterparts.
"Some of these challenges are blacklisting, and de-risking in correspondent banking despite the individual and collective adherence of countries in the region to comply with global regulatory initiatives in anti-money laundering (AML), corruption, the countering of financial terrorism (CFT) as well as the tackling of tax evasion. Global connectivity has increased the need for heightened security and effective controls to mitigate against financial risks," she told attendees at the conference.
The minister asserted that while The Bahamas continues to demonstrate its cooperation and commitment, while its current position and strengths are widely recognized, the country's position as a respected and trusted international offshore financial center is constantly being challenged and threatened.
"Now more than ever, we must not be discouraged, we must continue to display the resilience and strength that has brought us this far," she said.
Choice, no choice
Arguing that IFCs all over the world are vulnerable to illegal financial activity, Strachan said over the past 15 years The Bahamas has managed this risk by taking steps to ensure that the necessary legal and regulatory framework on AML and CFT are enacted and adhered to.
"We have ensured that our tax information exchange regime remains in line with global standards. We continuously monitor the financial services sector through regulatory supervision to mitigate against potential threats; and most importantly we remain engaged with industry and other stakeholders, working collaboratively, to achieve our common objective of maintaining and promoting the industry and ensuring compliance with our legislative and regulatory initiatives. Only legitimate funds seeking to be managed out of The Bahamas under the rule of law, and conducive to the preservation of our financial services system are welcome," she said.
Strachan refered to the discontent expressed by Organization for Economic Cooperation and Development (OECD) surrogates and the outright attack on The Bahamas for having made the choice to implement automatic exchange of information under the OECD Common Reporting Standard through bilateral means as "not only disingenuous but extremely unfair".
"Could it be that a choice is not really a choice? Other countries have chosen the bilateral approach, but are not being targeted for negative ridicule for having done so. Unfortunately, ladies and gentlemen, we now know that this attack will be sustained from other quarters, having since received almost half a dozen such requests for further information regarding the financial services sector from various media outlets represented by the International Consortium of Investigative Journalists (ICIJ)," she said.
K. Quincy Parker, Guardian Business Editor
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