The Bahamas must comply with the rules that govern operating in the Global Financial Ecosystem
By Llonella Gilbert
Sep 24, 2020 - 1:11:40 PM
Nassau, The Bahamas – Deputy Prime Minister and Minister of Finance the Hon. K. Peter Turnquest stated that oftentimes, in response to The Bahamas’ adoption of international financial standards, it is accused of simply acquiescing to the “diktat” of advanced economy countries by those who do not know (and sometimes by those that should know and do know) of the real damage that just the mere whisper of the possibility of a blacklisting can do to nation’s financial services industry and by extension, to its economy at large.
However, it is simple to explain why this must be done, DPM Turnquest said during his Contribution to the Debate on the Amendment to the Register of Beneficial Ownership Act in the House of Assembly on Wednesday, September 23, 2020.
“If The Bahamas is to remain in the global financial ecosystem, we must comply with the rules that govern operating in that environment. If only to be able to support a) our arguments on the legitimacy of our industry and b) to decry the use of blacklists and other punitive actions by certain countries to coerce us to implement measures that expand the parameters of the accepted standards, and c) to demand that the global standards be equitably applied against all participants in the global financial arena.
“To borrow a common maxim that the legally trained among us will be very familiar with, ‘He who comes to equity, must come with clean hands.’ Meaning, if we are asking to be treated fairly, we must be able to show that we are also acting fairly.”
DPM Turnquest explained that this Bill to amend the Register of Beneficial Ownership Act is another weapon in the Government’s arsenal to counter the narrative that The Bahamas’ financial services industry operates outside of the regulatory bounds accepted by the international financial community.
More importantly, he stated that it is protection against the abuse of the nation’s financial services industry by persons attempting to use its financial institutions and products to avoid declaring or to abate the true extent of their financial assets to the relevant authorities in their home countries, or as a shield to hide or launder illicit assets.
The DPM said the Bill provides for the specific inclusion of the Non-Profit Organization limited by Shares (“NPO”) and the Segregated Accounts Company (“SAC”) in the definition of entities covered by the Act.
“While it can be argued that a SAC would have already been within the scope of the Act on the basis that a SAC is either an IBC or a Companies Act company, we felt that it was important to expressly state that SACs were included, given that the intrinsic operation of a SAC could be viewed as a vulnerability to our anti-money laundering framework with respect to the identification of beneficial owners.
“This is because the assets of a SAC are not pooled and deemed to be owned by the shareholder of the company as is usually the case. But rather, different individuals other than the shareholders of the SAC beneficially own the assets of the SAC in separate accounts within the SAC.”
He also noted that the Bill fine tunes the definition of beneficial owner with respect to NPOs and Partnerships (Common Law Partnerships, Limited Liability Partnerships and Exempted Limited Partnerships) by defining who the beneficial owners of such entities are.
DPM Turnquest said the Bill imposes a duty on the Registrar General to provide beneficial ownership information in those cases where a legal entity does not have a registered agent.
He explained that a Compliance Unit has been established in the Registrar General’s Department to monitor the provision of beneficial owner information and other compliance measures related to the Register of Beneficial Ownership registry. Two senior attorneys of the Office of the Attorney General have been assigned to this unit and a third is being retained.
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