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BAHAMAS: Response to European Commission “High Risk Third Countries” List

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#Nassau, February 18, 2019 – Bahamas – Over the past year, Prime Minister the Most Hon. Dr. Hubert Minnis and his administration have been actively engaged in discussions with various international organizations concerning the country’s involvement in international financial markets.

These organizations include the European Union (EU), the Organization for Economic Co-operation and Development (OECD), and the Financial Action Task Force (FATF). The FATF was founded by the Group of Seven (G7) countries to develop policies aimed at combating money laundering and terrorism financing.

Government officials have been involved in a variety of meetings over the last several months to better understand the concerns of the EU, OECD and FATF and to present the position of The Bahamas as it relates to each organization’s requirements.

In 2018, Deputy Prime Minister and Minister of Finance Hon. K. Peter Turnquest, and Minister of Financial Services, Trade and Industry and Immigration Hon. Brent Symonette met with EU, OECD and FATF officials in France and Brussels, Belgium.

As a result of these meetings, and a close working relationship between The Bahamas and the EU, OECD and FATF, the Government passed a package of legislation in December 2018 to satisfy various requirements and commitments, including:

  • The Removal of Preferential Exemptions Act abolishes preferential tax regimes for certain categories of companies.
  • The Register of Beneficial Ownership Act establishes a secure and searchable database of the ownership details for all legal entities registered in The Bahamas.
  • The Commercial Entities (Substance Requirement) Act requires certain categories of companies to demonstrate a substantial economic presence in The Bahamas.

Earlier this year, Prime Minister Minnis and Attorney General Hon. Carl Bethel also met with various members of the EU in Brussels.

Positive results

The work by the Minnis Administration over the last several months has produced very positive results, especially as it relates to the 40 listed requirements by the FATF.

The Bahamas was placed on the FATF watch list in October 2018 when it only satisfied 17 of the required 40 FATF criteria. By year-end, The Bahamas was essentially compliant with 30 of the 40 requirements, a record similar to the United States.

As a result of this significant progress, if the FATF list of high-risk countries were compiled today, The Bahamas would not be included under the current criteria.

A variety of working groups within the EU impact The Bahamas. The two most relevant at this time are the Taxation and Customs Union, and the Justice and Consumers Unit Financial Crime.

The Taxation and Customs Union works on a list of “non-cooperative tax jurisdictions for tax purposes.” The Justice and Consumers Unit Financial Crime works on the list of “high-risk third countries presenting strategic deficiencies in their national anti-money laundering/counter-terrorism financing AML/CTF) regimes.”

In early January 2019, Prime Minister Minnis and Attorney General Bethel met with the head of the Taxation and Customs Union.

The Taxation and Customs Union concentrates on issues related to “Base Erosion and Profit Shifting (BEPS),” which generally relates to the way in which a broad range of financial services are provided in and from The Bahamas as an international financial services centre.

BEPS specifically relates to tax-avoidance strategies where businesses “shift” their “profits” from higher-tax jurisdictions (like some in Europe) to lower tax jurisdictions, thereby “eroding” the “tax-base” of the higher-tax jurisdictions.

Failure to meet requirements by the Taxation and Customs Union within the EU may lead this body to recommend to the EU of Finance Ministers that The Bahamas be placed on a “Blacklist” of countries that are “non-cooperative for tax purposes.”

A “Blacklist” is expected to be produced over the next few months, however The Bahamas believes it has met requirements expressed by the Taxation and Customs Union and has provided requested clarification over the last several weeks as a result of a healthy dialogue and exchange.

The Government has been very cooperative, and Prime Minister Minnis is fully committed to meeting international obligations while maintaining the integrity of the domestic financial services sector.

A ‘flawed’ process

On Wednesday, February 13, 2019, the Justice and Consumers Unit published a draft AML list of countries it deems a threat to their financial system due to what it considers strategic deficiencies in the ability to prevent terrorism financing and money laundering.

This is not a “blacklist,” but if agreed to by EU members at a subsequent meeting, it would require financial institutions to engage in “enhanced customer due diligence” for financial transactions to and from The Bahamas.

This draft AML list represents an advisory, issued by the EU, which is similar to the advisories issued by the US and UK in October 2018, when The Bahamas was placed on the FATF Action Plan.

The draft AML list is unrelated to the BEPS issues discussed by Prime Minister Minnis and Attorney General Bethel in Brussels on January 15, 2019. It is also unrelated to recent amendments to the Commercial Entities (Substance Requirement) Act.

The Bahamas became aware of the possibility of being included on the Justice and Consumers Unit draft AML list in a January 21, 2019 memo from the EU’s diplomatic representative to the Caribbean, based in Jamaica.

The Minnis Administration regrets this decision and wishes to point out several deficiencies in the approach to listing The Bahamas:

  • The Justice and Consumers Unit failed to consider the progress made by The Bahamas since May of 2017, based on the FATF criteria. As stated by the Unit, work prepared by the FATF is used to consider additions to this list, and old criteria for The Bahamas was considered.
  • The Bahamas was informed that the Unit was advised that The Bahamas does not have any law that criminalizes money laundering or terrorism financing. This is not accurate.
  • The Justice and Consumers Unit notes failures to prosecute all types of money laundering, but does not consider the increase in money laundering prosecutions and convictions in The Bahamas.
  • The Bahamas does not believe the process used by the Justice and Consumers Unit included a sufficiently in-depth review necessary to conduct an assessment relative to the consequences of such a list.
  • The Bahamas does not believe it was given sufficient notice of inclusion, which would allow for constructive dialogue with this Unit in the EU, allowing The Bahamas to challenge or address issues raised.
  • The Bahamas also questions the Unit’s approach in simply announcing an intention to list The Bahamas. This appears contrary to the EU’s own written methodology set forth in a “working paper.” This EU methodology sets out a specific process whereby the actual risk, if any, posed by each individual country is intended to be assessed on a sliding scale from “low’ to “moderate” to “severe.” Listing The Bahamas together with wholly non-compliant war-torn States is disproportionate and inflicts harm and punishment on The Bahamas without consideration for reforms and improvements in the AML/CFT framework.

The Justice and Consumers Unit’s draft AML list has already been criticized by Member EU States and the United States Department of The Treasury. In a statement the US Treasury noted that it “has significant concerns about the substance of the list and the flawed process by which it was developed.”

The Treasury stated that “the European Commission’s process for developing its list contrast starkly with the FATF’s thorough methodology.” The Treasury Department also stated that it “does not expect US financial institutions to take the EU list into account in their policies and procedure.”
 
The Bahamas poses no threat to the EU financial system and regrets this action by the EU, especially in light of it being based on out-of-date information. The Bahamas stands ready to meet its international obligations and has shown a willingness and ability to work constructively in this regard.

Press Release: Office of The Prime Minister

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Rosewood Exuma: A precedent-setting case for environmental law and future development in The Bahamas  

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By Eric Carey, ONE Consultants, former Executive Director of the Bahamas National Trust. 

We are facing an extraordinarily important moment in judicial history in The Bahamas as we await a decision on the trial of allegations in the Yntegra group’s Rosewood Exuma project.

As former Minister of the Environment, Romauld Ferreira, put it in the Supreme Court last week: “A lot is at stake…a  great deal of what will be considered in this case sets the stage for what’s to come for future development in the country.”

In the trial of the judicial review of government approvals given to Yntegra for their Rosewood Exuma resort this week, we’ve heard technical arguments about failure to make key environmental documents like Yntegra’s Environmental Impact Assessment and Environmental Management Plan available to the public, failure of key documents to assess some of the most controversial aspects of the project, an unlawful consultation process, and a failure to conduct further consultation following major changes to the development.

Lawyers for Turtlegrass described how there was a “salami slicing” of the project into chunks as a way to circumvent the approvals process and disguise its full impact from public scrutiny. Only certain portions came before the public and key stakeholders like Turtlegrass and Over Yonder Cay for scrutiny, while some of the most controversial aspects did not. This is particularly problematic given what is at stake – the dredging of a beautiful Exuma bay, the North Bay, to transform it into an industrial shipping channel, complete with an enormous seawall, dock, back-of-house facilities and other industrial infrastructure.

It is unfortunate that it has had to come to this – an expensive judicial review process that calls out the government for falling down on its duties to protect the environment and follow the law – but it is important and the broader implications should not be overlooked. When Justice Leif Farquharson rules on this case, he’ll set a precedent that could echo in The Bahamas for years to come, one that answers the question: are the 2019 environmental laws that Ferreira took to parliament after many years of advocacy by environmentalists toothless tigers that are just for decoration – or are they capable of protecting the environment that we all depend on and the rights of those affected by projects to have a genuine say in them?

What is curious is that at the same time as these points are being raised in court as part of the judicial review, we are seeing personal attacks about Bob Coughlin – the person spearheading this legal action and test of environmental laws – by online trolls. Coughlin, an Exuma resident for almost a decade, has long been established as an environmental advocate and a passionate philanthropist – one who has donated almost $4 million to causes in The Bahamas since 2018, including millions to the organisation I once led, the Bahamas National Trust.

For reasons one can only speculate about, these trolls have been trying to make out all sorts of absurd things: that his legal action in support of environmental protection is a petty dispute born out of fears of competition. That Coughlin no longer even wants to pursue his eco-tourism project, when the reality is that he was forced to put it on hold because of the destructive environmental plans that are in dispute. That he is the only one who has an issue with this Rosewood Exuma resort, when in fact, neighbouring resort, Over Yonder Cay – one of the top rated resorts in the Caribbean – as well as the Save Exuma Alliance – consisting of most of the local islands and businesses in the Exuma area, and thousands of petition signers have expressed their concern with the project – over 9,000 to date. Most ironically, they claim, wrongly, that Coughlin received crown land for personal use, when in fact it is Yntegra who received crown land while having no development track record, when Coughlin instead bought his lease on Sampson Cay from a private owner.

The timing of these claims, in the week of the trial, suggest a patronising and cynical attempt to distract from the gravity of the case being heard, what it represents, and how important this decision is. With their simplistic, jingoistic and factually-dubious references to crown land, white foreigners, and the like – it’s not hard to imagine that those involved are engaged in a ploy to push the buttons of Bahamians who they apparently believe can be too easily distracted into ignoring the real issue here: that the government, has – in the words of those in the Supreme Court this week – “run roughshod” over environmental laws with its approvals for Yntegra’s Rosewood Exuma project and that this is truly a landmark case and the decision will have a long-lasting impact on future development. This is at a time when foreign direct investment (FDI) inflows into the Bahamian economy are forecast to increase by as much as two thirds over the next two years, according to the Inter-American Development Bank (IDB).

So I call on my fellow Bahamians to stay focused. This is not a story about one man – it is a story about the future we want for our country and whether we are willing to sacrifice our ability to demand environmental accountability in all developments moving forward. There is too much at stake to be thrown off the track by trolls.

As Ferreira says of the judicial review that now awaits Justice Leif Farquharson’s judgement: “This is the first set of litigation, serious litigation, that takes a deep dive into the Environmental Planning and Protection Act and the environmental impact assessment regulations…There’s a lot at stake here.”

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Monument Supports Hands for Hunger With Paradise Plates Debut  

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NASSAU, Bahamas — Caribbean Wines & Spirits (CWS), The Bahamas’ leading wine and spirits distributor, proudly supported Paradise Plates, Hands for Hunger annual fundraiser with a flavorful offering of its newest product, Monument Beverage Co.

Monument, which launched this July and is available across six major islands, made its Paradise Plates debut. Guests enjoyed three bold flavors: Peach Passion, Ginger-Lime and Melon Fizz as they socialized throughout the evening.

Monument brand ambassadors engaged guests with knowledge on the ready-to-drink beverage’s unique taste and look. Many attendees were delighted to learn that Monument is 100% Bahamian-made and owned and enjoyed seeing the various national landmarks on the packaging.

The booth was adorned with vibrant brand colors, striped arches, tropical florals and a photo worthy backdrop featuring Monument cans filled with florals cascading down the wall.

At the end of the event, the entire Monument inventory had finished, making Monument’s Paradise Plates debut a huge success.

For more details on Caribbean Wines & Spirits, new products and specials, visit www.cwsbahamas.com today.

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Schweppes ‘the Art of Mixology’ Dazzles at Paradise Plates with Nemiroff Vodka

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NASSAU, Bahamas — Schweppes, in collaboration with Nemiroff Vodka dazzled guests with handcrafted cocktails during Paradise Plates, Hands for Hunger’s annual fundraiser held at Atlantis’ Imperial Ballroom.

The evenings’ theme, 70’s: Paradise Disco, inspired bold and delicious sips from Schweppes and Nemiroff.  The beautiful disco themed Schweppes booth, adorned with LED signs, lush greenery and hanging black and gold metallic orbs shined throughout the room.

Schweppes’ brand representatives and mixologists dressed in chic 70’s speakeasy attire engaged attendees throughout the night. Guests enjoyed receiving knowledge of each product and experiencing the vibrant energy of brand representatives.

Nemiroff Vodka, which is locally distributed by Caribbean Wines and Spirits (CWS), The Bahamas’ premier wines and spirits distributor; offered a unique variety of vodkas which made the perfect blend with Schweppes. Guests enjoyed, Nemiroff’s Honey Pepper, De Luxe, Burning Pear, Wild Cranberry, and Bold Orange vodkas throughout the night.

Fan favorite cocktails of the night were: the Wild Cranberry Tonic and the Bold Orange Fizz.

Following a positive response at Paradise Plates, CWS is offering Nemiroff and Schweppes specials at local liquor stores for the entire month. With the purchase of any 1-liter Nemiroff vodka, enjoy a complimentary three-pack of Schweppes mixers, to recreate the magic of Schweppes and Nemiroff.

Cara Douglas-Adderley, Senior Marketing Director for Caribbean Bottling (CBC), local producers and distributors of Coca-Cola and Dasani products and CWS shared the inspiration behind the Schweppes and Nemiroff promotion.

“We are thrilled to have paired Schweppes and Nemiroff for Paradise Plates this year, creating a premium cocktail experience for guests. After receiving such positive feedback, we wanted to extend that experience to consumers at home. Throughout October, consumers can visit their favorite watering hole, buy any 1-liter Nemiroff bottle and receive a free three-pack of Schweppes.”

Caribbean Bottling Company is proud to offer Schweppes, Coca-Cola’s premier mixer in collaboration with Caribbean Wines & Spirits and Nemiroff Vodka at Paradise Plates in support of Hands for Hunger’s mission.

For more information on CBC’s philanthropic work, new products and specials, visits www.cbcbahamas.com today.

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