BFSB Reiterates Need For Level Playing Field Following OECD Agreement

by Amanda Banks, Tax-News.com, London

20 March 2002

The Bahamas Financial Services Board has released a statement regarding the decision by the Caribbean jurisdiction's Government to make a commitment to the OECD.

Speaking on Monday, Bahamian Finance Minister Sir William Allen, revealed that the Organisation for Economic Cooperation and Development had agreed to accept the model on transparency and information exhange offered by the authorities, and as such, he was formally submitting the commitment to the multilateral body in the mutually agreed form.

The move came in for criticism, not least from Nassau Institute Executive Director, Dr Gilbert Morris, who confessed that he was amazed at the Bahamian Government's seeming U-turn on the issue.

'It must be met with some alarm that only days ago, fresh from travels in Australia, the Government trumpeted its having won Australia - and even Britain - to its position, only to discover that its position has been to draw its own words into question,' he observed earlier this week.

However, the BFSB appears to be slighly less vehemently opposed, accepting the move as a necessary measure while still stressing the necessity for a level playing field for OECD members and non-members alike.

In its statement, the Board explains that: 'As one of the world's leading centres for international financial services, The Bahamas recognises the value of a robust and constructive relationship with the US and other OECD member countries.'

However, echoing the words of Prime Minister Hubert Ingraham, the BFSB reiterated that the jurisdiction will not be bound by terms more onerous than those imposed on other, rival jurisdictions, and will not act on tax practices and information exchange until all OECD members have been brought into line.

Illustrating this point, the BFSB points to the fact that: 'Four OECD members, including Switzerland and Luxembourg, abstained from the OECD's 2001 Progress Report on Harmful Tax Practices,' warning that: 'the OECD will need to ensure that its own membership backs its proposals before pressing others to adopt onerous obligations.'

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