A return to bipartisan support for the country’s financial services sector
is needed so that the industry can be confident that government is committed
to consistent and transparent regulation and policies, regardless of the political
party in office, Prime Minister and Minister of Finance Hubert Ingraham told parliamentarians
on Wednesday.
Ingraham spoke as he wrapped up debate on proposed amendments to the Central
Bank of the Bahamas and the Banks and Trust Companies Acts, which focus on the
regulation of Money Transmission Business (MTB) services like Money Gram and
Western Union.
Pointing out that the amendment Bills will frustrate efforts to launder money
through MTB services, Ingraham added that they also seek to bring the Bahamas
into compliance with the Financial Action Task Force’s (FATF) Special
Recommendation VI on alternative remittances.
The FATF Recommendation states that: “Each country should take measures
to ensure that persons or legal entities, including agents, that provide a service
for the transmission of money or value, including transmission through an informal
money or value transfer system or network, should be licensed or registered
and subject to all FATF Recommendations that apply to banks and non-bank financial
institutions.”
The Recommendation goes on to state that each country should ensure that persons
or legal entities that carry out this service illegally are subject to administrative,
civil or criminal sanctions.
“There was a time,” the Prime Minister noted, “when the financial
services sector enjoyed the unanimous support of all sides of the House and
we always agreed to legislative changes and initiatives because both political
parties determined that the financial services sector was a sector that was
in the interest of the Bahamas."
“A divide took place after the year 2000 and we are still following along
that path,” he continued. “Hopefully the time will come when there
will be bipartisan support for legislative and policy initiatives related to
the financial services sector because it is very important for the sector to
have certainty that irrespective of which political party is in office, there
is a commitment to the sector; to regulate it and have policies that are consistent
and are known and that are not easily changed.”
Ingraham’s call for bi-partisan cooperation foreshadowed his responses
to questions and criticisms levelled by the Opposition during debate on the Bills.
The Prime Minister refuted claims that insufficient consultation took place
prior to the Bills being brought to Parliament, pointing out that the Bills
– driven by the Central Bank of the Bahamas - were drafted months before
his government assumed office, and that the Bank released its public consultation
paper on a proposal for it to assume responsibility for the regulation and supervision
of stand-alone MTBs on 27 February, 2007.
“This document was published on the Bank’s website, as is customary,
and the deadline for receiving comments was set at 30 March 2007,” Ingraham
explained. “All stakeholders were advised via mass e-mail of the release of
the paper.”
The consultation paper, he pointed out, also outlined the rationale for making
the proposals, and invited the public and industry stakeholders to comment on
the issues outlined in the consultation paper and the draft bills and regulations
annexed to the paper.
“Subsequent to receiving these comments, the Bank invited all the industry
stakeholders to a meeting on 5th July, 2007. During this meeting, the Bank presented
participants with a summary document containing all the comments it had received
along with the Bank’s reasoning as to why it accepted some comments and
not others. The Bank then finalised its proposals and submitted them for the
Government’s consideration," the PM stated.
Ingraham confirmed that the proposed legislation is intended to rationalize
and simplify the regulatory framework for stand-alone money transmission businesses
operating in the Bahamas by streamlining the supervision of money transmission
businesses (MTBs) in the Bahamas under the regulatory authority of the Central
Bank.
During the debate, the Opposition’s MP for St. Thomas More cited the
need for economic stimulus in the country, asserting therefore that the government
should have extended stamp tax exemption for first time homeowners with homes
valued less than 250,000 dollars.
Noting at the onset that stamp tax is not paid on homes built and sold by the
government, Ingraham went on to table statistics on the number of residential
construction permits issued between 1993 and 2006.
“The numbers here are reflective of the growth of the Bahamian economy,
employment levels and incomes which people were earning notwithstanding in the
latter years from 2003 onward, that the government of the Bahamas accelerated
its housing programme and built hundreds and hundreds of houses,” Ingraham
explained.
“In the years preceding that when people were building their own homes
because they were working and had the income, the numbers are roughly the same,”
he noted.
TAX-NEWS.COM
13/07 
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