Bahamas Government Starts To Tackle Discontent Over Legislation

by Mike Godfrey, Tax-News.com, New York

04 October 2002

Bahamas Minister of Financial Services and Investments, Allyson Maynard-Gibson, recently announced a 5-year overhaul of the country's financial sector, and at a briefing organised by Gomez Partners & Co this week the Minister set out some broad outlines of the program she has in mind.

"During the summer," said Ms Maynard-Gibson, "I have been in dialogue with the private sector so that our 5 year strategic plan can be one derived by consensus. Overwhelmingly, I heard messages from Financial and Corporate Service Providers:

• Cut the Red Tape in the applications process;
• Address inefficiencies at the Registrar General’s Department;
• Streamline the KYC requirements;
• Let us know this administration’s policy on IBCs.
  

"Let me say a few words in response to these points. In doing so, I ask you to remember that I speak as a promoter of financial services, not as a regulator. Having said that, as you will have seen in relation to the OECD accounts letter, this administration is making every effort not only to encourage public/private sector dialogue but also to let it be seen that there is interministerial dialogue. While we each perform our distinct roles, The Ministry of Finance, the Central Bank and my Ministry will continue to cooperate and communicate with each other and where possible, together with industry.

"Cut the Red Tape in the applications process. This applies to many agencies, not just the Inspectorate of FCSPs. My Ministry discovered that many applications are incomplete when submitted. The problem is that there is neither speedy response to address this situation and project management systems are either not in place or are not followed. We propose to address this as follows: (a) by reevaluating the application forms to ensure clarity and completeness; (b) tightening up on project management systems and training and retraining those who utilize them; and (c) working closely with FSCPs encouraging them to train and retrain their staff.

"Address inefficiencies at the Registrar General’s Department. As previously indicated, we propose to address this by a full computerization of the Corporate Registry by December of this year and to make utilization of its services web based.

"Streamline the KYC requirements. We have requested a meeting with industry in a forum similar to that of the OECD accounts consultation. In this way, the Ministry of Finance, the Central Bank and my Ministry can all hear from and respond to observations and requests. Also, the government and the Central Bank, so far as is possible, will be seamless in our proposals, which we want to ensure comply with our policy of being “blue chip, well regulated and cooperative and our international obligations.

"Let us know this administration’s policy on IBCs. IBCs, like companies incorporated under 1992 Companies Act are Bahamian legal entities. We do not intend to revoke the IBC Act. Dialogue with industry makes at least 2 things clear: (a) industry feels that there was not sufficient consultation with industry in 2000 when the 11 pieces of legislation were rushed through and (b) as a result there are many lacunas in the Act. These make it difficult, if not impossible for lawyers to advise with certainty. In this light, we do intend to review the Act."

The famous 11 pieces of legislation dating from 2000/2001 have been under attack from the Bahamas' professional sector, and last week a decision of the Supreme Court opened the way for a substantive hearing of their complaints, which centre around the constitutionality of the legislation, and its attack on professional confidentiality.

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