The Bahamas underwent a traumatic experience in 2000 when the financial services industry was delivered a near fatal blow with the broad blacklisting by the OECD. The then FNM government responded positively with a suite of legislative Acts designed to counter perceived compliance weaknesses in the jurisdiction. In the face of tremendous criticism from the then opposition PLP, those bold and yes intrusive initiatives, effectively saved the industry. The PLP promised to roll back those Acts but of course that never happened.
Subsequent to that defining period, continued compliance pressures and shifting goal posts from developed states has resulted in further tightening of internal regulations and scrutiny of financial accounts and transactions culminating in the FATCA legislation passed last year. All of these attacks on our second economic pillar have weaken the industry and made it and our economic viability vulnerable. We have seen the effects of this through withdrawal of some international banks and consolidations in others, which have resulted in the loss of well paying jobs.
As a jurisdiction, it is my belief that The Bahamas remains a well ran and compliant jurisdiction. These leaks however point out how very important it is for all intermediaries to be vetted to ensure that the same strict standards practiced within the jurisdiction are maintained by those introducing business to The Bahamas.
While this report does not point out any wrong doing by local financial institutions, it points out the vulnerability of the jurisdiction to be used unwillingly as safe harbour for illegally gained proceeds. It should also heighten our vigilance for the consistent application of international best practices necessary to ensure compliance standards and data security is maintained at all levels.
This leak and the damage it may do to the jurisdiction's reputation points out the very serious and damaging potential consequences of the alledged local breach of data security that occurred when private emails were leaked and read in Parliament followed by specific threats of vengeful prosecution as political payback against specific persons. The Minister of Education's (backed up by a PLP backbencher) admission to being in possession of private banking details of citizens and international clients of professional firms are even more worrisome and potentially damaging.
We trust now the Minister of Financial Services understands our previous exhortation to counsel her fellow ministerial colleagues on their loose talk and actions concerning this sensitive industry.
