Minister of State for Finance the Hon. Zhivargo Laing (left) and Ambassador of the Principality of Monaco His Excellency Gilles Noghès sign a Tax Information Exchange Agreement at the Ministry of Finance, Friday, September 18, 2009. Looking on are Financial Secretary in the Ministry of Finance, Ehurd and Legal Advisor at the Ministry, Rowena Bethel. (BIS photo/Kristaan Ingraham)

NASSAU, Bahamas -- The Bahamas Government and the Principality of Monaco has concluded negotiations for a Tax Information Exchange Agreement (TIEA).

Minister of State for Finance the Hon. Zhivargo Laing and Ambassador of the Principality of Monaco His Excellency Gilles Noghès signed the agreement at the Ministry of Finance on Friday, September 18, 2009.

Mr Laing said both countries have also agreed to continue dialogue towards further cooperation in the tax area by negotiating a Double Taxation Agreement.

“The Bahamas and Monaco share much in common,” he said. “Both are small nations with the major portion of economic activities concentrated in the hospitality and financial services industries.”

Mr. Laing added: “We look forward to a productive and cooperative relationship with the Principality of Monaco as our nations strive to adjust to the changing global financial and economic landscape and the emerging rules that are being developed to accommodate it.”

He said The Bahamas-Monaco TIEA is the first of many similar agreements the Government expects to sign in the weeks ahead, having made substantial progress in negotiations with a number of Organisation for Economic Cooperation and Development (OECD) and G-20 countries.

“These negotiations are part of the effort made by the Government of The Bahamas to meet its commitment to implement the standards for transparency and information exchange in tax matters that were developed by the OECD,” Mr. Laing said.

Mr Laing said the United Nations also adopted the standards and are supported by the declarations of the G-20 Group of Nations.

Minister of State for Finance the Hon. Zhivargo Laing (left) and Ambassador of the Principality of Monaco His Excellency Gilles Noghès present each other with their signed originals of the Tax Information Exchange Agreement at the Ministry of Finance, Friday, September 18, 2009. (BIS photo/Kristaan Ingraham)

“The Government is confident that this agreement with Monaco and other pending agreements will allow The Bahamas to meet its commitment within the near future,” he said.

The TIEA signed with Monaco is the second The Bahamas Government has concluded, the first being with the United States on January 24, 2002.

Ambassador Noghès said this is only the beginning of cooperation between the two countries and within the coming months a larger agreement between Monaco and The Bahamas will be signed.

Mr. Noghes and Financial Secretary Ehurd Cunningham also signed an agreement on Administrative Arrangements for the Implementation of the TIEA.

The OECD created the Agreement on Exchange of Information on Tax Matters to address harmful tax practices.  

A 2008 OECD report titled, “ Harmful Tax Competition: An Emerging Global Issue”, identified “the lack of effective exchange of information” as one of the key criteria in determining harmful tax practices.  

It mandated a Working Group to develop a legal instrument that could be used to establish effective exchange of information.