03142018 business

business@tribunemedia.net

WEDNESDAY, MARCH 14, 2018

$4.45

$4.59

$4.41

$4.56

Gov’t targeting ‘quick EU blacklist reversal’

EU warning to Bahamas: Tax system ‘harmful’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

T

he Government was last night “optimistic” the Bahamas’ blacklisting will be “quickly reversed”, suggesting the European Union (EU) had ignored top-level pledges to meet its demands.

K P Turnquest, the Deputy Prime Minister, urged Bahamians - and especially the financial services industry - not to panic as removing this nation from Europe’s listing was “number one priority for me right now”.

Mr Turnquest, who is heading a Government delegation that will meet EU officials today, told Tribune Business that letters he had personally signed committing the Bahamas

* DPM blames ‘timing and miscommunication’ * Tells financial sector: ‘Don’t panic, No.1 priority’ * EU: Finance secretary signing not adequate to compliance with its antitax avoidance drive were “obviously not taken into account” in the ‘blacklisting’ decision.

The 28-nation EU, unveiling its rationale for ‘blacklisting’ the Bahamas and two other Caribbean nations as ‘non-cooperative jurisdictions’, said this action was taken “because they have failed to make commitments at a high political level in response to all of the EU’s concerns”.

Mr Turnquest last night revealed that this statement likely stemmed from the fact that the Bahamas’ initial compliance

commitment was signed by Marlon Johnson, the Ministry of Finance’s acting financial secretary, rather than himself or a Cabinetlevel minister.

He added that when the EU expressed this concern to the Government on March 2, he immediately responded by sending them the same letter signed by himself. Had the EU recognised this, Mr Turnquest said, its statement and ‘blacklisting’ rationale “could not hold up”.

The Deputy Prime Minister argued that “timing and K P TURNQUEST

SEE PAGE 6

THE Bahamas was warned in late January 2018 that its tax system is “harmful”, with the European Union (EU) demanding a detailed action ‘plan’ to remedy “deficiencies” within one month.

Correspondence released yesterday as part of the EU’s decision to ‘blacklist’ the Bahamas for being non-cooperative in combating tax avoidance shows the Minnis administration was given six weeks’ notice of the 28 nation bloc’s concerns.

A letter, dated January 26, 2018, and sent to the Ministry of Finance and Bahamas’ United Nations mission in Geneva, demanded that this nation give a “high level political

* DEMANDED ‘ACTION PLAN’ IN ONE MONTH * GOV’T GOT 6 WEEKS ‘BLACKLIST’ REASON WARNING * LETTER SUGGESTS EU ALSO ‘MOVED GOAL POSTS’ commitment” to preventing its corporate vehicles and structures from being used to aid tax avoidance.

The initial Bahamas’ commitment to meet these demands, signed by Marlon Johnson, the Ministry of Finance’s acting financial secretary, did not reach the “high political level” required (see other article on Page 1B). And the

SEE PAGE 7

BAIC suffers NIB BRAN: EU WOULD BLACKLIST BAHAMAS ‘NO MATTER WHAT’ pay delinquency * Wants to force corporate income tax

By NATARIO MCKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net THE Bahamas Agricultural and Industrial Corporation (BAIC) “largely” failed to pay NIB contributions between 2012-2017 despite deducting these from employee salaries, it was revealed yesterday.

Michael Foulkes, the BAIC chairman and

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

* STAFF SALARIES DEDUCTED, PAYMENTS NOT MADE * COLLECTIVE $1.7M NOT PAID TO SOCIAL SECURITY * WORKFORCE TRIPLED; $300K OWED TO BPL SEE PAGE 4

Gov’ts opponents: Did you ‘drop the ball’ on blacklist?

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government’s political opponents and financial industry executives yesterday questioned whether it had “dropped the ball” and provoked the European Union (EU) to deploy its “nuclear weapon”.

Reacting to confirmation of the Bahamas’ ‘blacklisting’ by the 28-nation bloc,

* FINANCIAL SECTOR ASKS: ‘WHAT WENT WRONG?’ * DID EU WANT BAHAMAS TO ‘JUMP HIGHER’? * EU’S ‘NON-RESPONSIVE’ CLAIM NEEDS ANSWER SEE PAGE 5

THE DNA’s former leader yesterday accused Europe of being determined to ‘blacklist’ the Bahamas “no matter what” and force this nation to introduce a corporate income tax.

Branville McCartney, attorney and partner at the Halsbury Chambers law firm, told Tribune Business that the European Union’s (EU) decision to act against this nation - less than two weeks after the deadline

* Says bloc ‘moved goal posts on us’ * Fears impact on sovereign credit rating it set for the Bahamas to address its concerns - indicated that it had “moved the goal posts” on this nation.

The EU had given the Bahamas until February 28, 2018, to produce an ‘action plan’ and timeline for addressing its tax avoidance and information exchange concerns, with the Government seemingly addressing

the three “deficiencies” it cited through agreement signings, commitments and legislative changes passed

by Parliament.

That, though, was not enough for the EU, which yesterday followed through in ‘blacklisting’ the Bahamas for not giving a “high political level” commitment to prevent its corporate vehicles and structures from

being used for tax avoidance purposes.

Seizing on the timing as proof of his suspicions, Mr McCartney told Tribune Business: “Two weeks later they ‘blacklist’ us; wow, that’s quick. It goes back to my point; no matter what we do, they will start moving the bar, the goal

SEE PAGE 4

PAGE 2, Wednesday, March 14, 2018

THE TRIBUNE

Chamber unveils new membership specialist THE Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) has named Bianca Lee as its new membership specialist with effect from February 19.

With 15 years of experience in administration, relationship management, process efficiency, and point-of-sale systems analysis, Ms Lee has worked with companies including Palm Cay Community Association; Palm Cay Development Company; Adam & Eve; and the Orlando Utilities Commission (OUC).

BIANCA LEE

Using her background in human resources, business management and administration, Ms Lee will assist the Chamber in building and maintaining current/ new membership relations.

She will often serve as the first point of contact for all potential members.

Ms Lee is a graduate of St Andrew’s School and holds a Bachelor of Science degree from the University of North Carolina at Wilmington, as well as a Master of Business Administration degree with specialisation in finance and management from Rollins College, Florida.

Chamber names new membership liaison THE Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) has named Nicole Burrows as its communications and membership liaison.

The private sector body said her appointment is part of a talent recruitment drive that will enhance its ability to better reach and serve its members.

Ms Burrows has 14 years of experience in communications and media, as a journalist and writer, and as a business analyst and manager. She has worked with companies such as The Tribune (feature writer and columnist); the Ministry of

NICOLE BURROWS Tourism (senior writer and producer); the John Bull Group of Companies (assistant operations/ multi-store manager); and AML Foods (product manager/ buyer).

Ms Burrows will be responsible for improving business and member engagement through improved communications, research, the use of business analytics, focus groups and new technologies.

She is a graduate of St John’s College; the College of the Bahamas (now University of the Bahamas); and the University of Georgia, where she developed interests in international economics, international trade and policy, monetary economics, and development economics, including an internship at Georgia State University’s Andrew Young School of Policy Studies.

MOBILE

APP

Take us with you Everywhere you go!

THE TRIBUNE

Wednesday, March 14, 2018, PAGE 3

Bahamas urged: ‘Roll with punches’ over blacklisting

By NATARIO MCKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net THE Bahamas must be “methodical” and not reactionary in response to the European Union’s (EU) ‘blacklisting’, a well-known accountant yesterday urging it to “roll with the punches”.

Gowon Bowe, the Bahamas Institute of Chartered Accountants (BICA) president, said the Government must have a clear understanding of the EU’s demands as well as its own targets and timelines.

“We cannot be simply be seen to be reacting. We have to be seen to be sort of methodical and proactive.

We must set out a strategic plan with milestones and dates,” he argued.

K Peter Turnquest, the Deputy Prime Minister,

and Brent Symonette, minister of financial services, are currently in Brussels on a mission to engage the EU Code of Conduct Group that oversees the anti-tax avoidance initiative as well as the EU Council directly.

“I hope that they at least took the opportunity to be very clear with the parties they met with as to what milestones have to be achieved in order to get off the blacklist, and I hope that they come back with a clear plan on what needs to happen from a European standpoint,” Mr Bowe said.

“We should devise our own plan, hitting the key elements they would like us to hit, key objectives as well as what products and services we see ourselves offering. I think that we are still a ways off in terms of saying what our new identity is as an IFC and what our value proposition is.”

Mr Bowe added: “We have to move with purpose and in time be able to show them what we have implemented. We have a lot of plans in place for things we need to do, but thus far everything has been very rushed and at 11th hour.

“We have to be mindful that that does not breed confidence from a tax authority. If things are being done last minute they begin to question whether you are serious about enforcement.”

The ‘blacklisting’ decision by the EU comes roughly three months after it placed the Bahamas and seven other jurisdictions that were impacted by hurricanes last summer on a ‘watchlist’. The EU said these jurisdictions, which were given special consideration, had been given until early 2018 to respond to the EU’s concerns.

GOWON BOWE In a statement yesterday, the Government said it was “regrettable” that the EU indicated there was a “lack of commitment at the highest political levels” by the Bahamas in meeting its

demands. “The Bahamas government, through the Ministry of Finance, has consistently been engaged with the EU’s Code of Conduct Group and has responded to its requests,” the Government said.

“Prior to today’s meeting, at the level of the Deputy Prime Minister, the Bahamas reiterated its commitment by formal letter and is on schedule to meet the December 2018 deadline set by the European Council for implementation of the areas of concern indicated.

“The Bahamas remains committed to complying with international regulatory standards and initiatives, and will continue to hold discussions with the EU to determine how we can work together to ensure a better understanding and facilitation of the process to be removed from this

listing in the shortest time possible.”

Mr Bowe stressed the need for the Bahamas to be “methodical”, not merely reactionary, in its response to the ‘blacklisting’. “We have to be doing things methodically, on our own timeline and a timeline acceptable to them,” he reiterated.

“We cannot give them the impression of weakness. We need to temper our emotional response and not seem to be disappointed or surprise. We can’t take umbrage when they threaten to do certain things.

“We have to be able to roll with the punches and not seem wounded when they make threats or statements. We have to be able prove that they were either inaccurate in their depiction or unjust in their assessments.”

TRIBUNE RADIO NAMES NEW SALES MANAGER

By NATARIO MCKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net THE Tribune Media Group has appointed Kevin Darville to the role of sales manager at Tribune Radio Ltd (Radio House).

Mr Darville, who has served as special projects manager for the past five years at Tribune Media Group, said he was “excited” for the new opportunity and looks forward to working with staff within the organisation.

While there are numerous radio stations in the Bahamas, Mr Darville said Tribune Radio Ltd was a “one-stop shop” as it offers five radio stations which, combined, reach nearly the entire listening audience in the Bahamas for advertisers. “There is really no need to go elsewhere”, he said.

Tribune Radio Ltd (Radio House) currently consists of five different radio stations - 100 Jamz (100.3),

KEVIN DARVILLE KISSfm (96.1), Y98 (98.7), JOYfm (101.9), and ClassicalFM (98.1). Prior to his employment at Tribune Media Group, Mr Darville worked at the

Seminole Hard Rock Hotel & Casino in South Florida.

He has extensive experience in the service industry and graduated from Saint Leo University in Saint Leo, Florida, obtaining his Bachelors of Arts degree in Business Administration specialising in sales and marketing.

Tribune Radio’s chief operating officer, Ollie Ferguson, said: “Kevin has worked at Tribune Radio Ltd for five years. Kevin’s areas of expertise include but are not limited to advertising, special events planning, promotions and revenue analysis.

“In this new role Kevin will be responsible for establishing, developing and maintaining long-term business relationships; sourcing, identifying and securing new business opportunities; generating creative solutions for clients; presenting campaign proposals; and delivering accurate reports and revenue forecasts.”

Rhone is a Swiss company established in 1982 with offices in Geneva, The Bahamas and Singapore. It creates and administers legal entities.

To bolster its Bahamas based team, Rhone is seeking

COMPLIANCE OFFICER MISSION To act as a Compliance Officer and Deputy MLRO and to assist the Compliance Director.

Together with the Compliance Director you would be responsible for Rhone’s Compliance requirements in The Bahamas and also provide supervision and certain support for the Group‘s other offices, principally in Switzerland and Singapore.

RESPONSIBILITIES INCLUDE o Review of new business, payments etc. to ensure compliance with internal procedures o Monitoring and Analysis of Transactions o Know Your Client checks o Clearance of Database checks o PEP reviews and reviews of higher risk rated cases o CRS and FATCA reporting (in The Bahamas and elsewhere) o Drafting and filing of Suspicious Transaction Reports o Liaison with the Central Bank of The Bahamas o Liaison with specialist compliance officers and advisors in other jurisdictions to ensure effective implementation of procedures on a Group level.

PROFILE o Bachelor’s Degree in an appropriate area o AML and Compliance certification o Five years relevant experience o Proficient in Microsoft Office o Excellent command of English, oral and written. An ability to also read and speak French would be an asset o Regulatory approval is a condition of the job No telephone calls accepted. Please submit written applications to: Compliance Director Rhone Trustees (Bahamas) Ltd PO Box SP 63131 Building No. 1, Bayside Executive Park West Bay Street & Blake Road Nassau, The Bahamas Deadline for Submission: March 23, 2018

PAGE 4, Wednesday, March 14, 2018

THE TRIBUNE

Bran: EU would blacklist Bahamas ‘no matter what’ FROM PAGE 1 posts, as to what we need to do. “Two weeks after they make the deadline for certain demands..... that’s very telling. That’s not right. No matter what we have done, what measures we put in place, they would have moved the goal posts.

Their ultimate goal was to ‘blacklist’ us and force us to introduce a corporate income tax. That’s what they’re forcing us to do.

“No matter what we do they will move the goal posts because their intention is to blacklist us and force us to implement a corporate income tax. No matter what we do their mind is set. They [the EU] have the power and are wielding it on us. Small nations are under attack.

They are wielding a big stick, and we are getting licked across the head with it and will suffer even more.”

Mr McCartney said he had sat in financial services meetings to discuss how the industry could help the Government to avoid the EU’s ‘blacklisting’ action.

Suggesting that no blame could be attributed to

either party, he continued: “It seems that no matter what we do, what we try to accomplish, they will try and find some excuse to ‘blacklist’ us.

“In my view, no matter what we did, they would find some way. We know what they want. They want us to introduce a corporate tax, so that any other company that comes here will have to do the necessary reporting. I’m quite sure this is something they want us to implement with respect to our tax structure.

“We need to look at our legal framework and regulations in terms of offshore companies and offshore accounts being here so we’re in a position to have the necessary checks and balances, and are not looked at as an offshore ‘tax haven’.”

The EU, in a January 26, 2018, letter to the Government suggested a ‘road map’ as to how the Bahamas could meet its demands without introducing a corporate income tax.

This appears very similar to the legislation that Carl Bethel QC, the Attorney General, said his ministry was drafting, which would require country-by-country

reporting of profits and losses by Bahamas-domiciled entities that are part of structures employed by multinational corporations.

However, like Mr McCartney, many observers believe the EU’s ultimate goal is to force the Bahamas to adopt a corporate income tax, and it may have little choice in the matter if it is to meet the EU’s demands.

For the Bahamas to be viewed as a ‘cooperative’ jurisdiction by the EU, it must comply with three criteria - tax transparency, ‘fair taxation’, and the Organisation for Economic Co-Operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) initiative.

The latter aims to ensure that the profits of multinational companies are taxed in the country where they are generated. Multinational companies often use legitimate tax avoidance strategies to “exploit gaps and mismatches” between different countries’ tax rates and rules, and “artificially shift profits” to low or ‘no tax’ jurisdictions despite conducting no or minimal business there. This enables them to minimise their tax

exposure by paying a lower rate than they otherwise would in countries where they do conduct business.

Tribune Business previously reported that BEPS compliance had created both uncertainty and concern within the Bahamian financial services, given that it seemed to require that this nation implement a corporate income tax.

The four standards that the Bahamas selected to meet the minimum BEPS requirement are: (Action 5): Countering Harmful Tax Practices; (Action 6): Treaty Shopping; (Action 13) Transfer Pricing Documentation and Country-by-Country Reporting; and (Action 14) Dispute Resolution.

Financial services industry sources told Tribune Business that compliance with Action 5 was especially problematic for the Bahamas The OECD considers a corporate tax rate of 10 per cent or less to be a ‘harmful tax practice’, but the Bahamas - with no income taxes of any kind - has an effective corporate tax rate of ‘zero’ because it simply does not have this system.

Therein lies the pressure for this nation to adopt a corporate income tax.

Mr McCartney yesterday said he was “reluctant” to

see any new or increased taxes implemented in the Bahamas, given that a stillstruggling private sector would find it difficult to “withstand” the extra burden.

He agreed that the ‘road map’ suggested by the EU in terms of new regulatory and reporting requirements would be the best way around a corporate income tax in the short-term, but admitted of the EU: “They’ve got us between a rock and a hard place.

“Even though we’re a sovereign country and independent, we’re going to have to weigh the balance between what’s ultimately beneficial to the country.

We’re so damn small they could stamp on us, and we can’t do anything about that. It’s unfortunate. We don’t have that power to fight.”

Mr McCartney said “the best minds in the Bahamas” needed to be called upon to devise a strategy that would enable the Bahamas to escape the EU ‘blacklist’ as rapidly as possible, and ensure this nation complied with legitimate international standards and best practices.

The ex-DNA leader also expressed concern that the EU ‘blacklisting’ could impact the Bahamas’ fragile credit rating, with Moody’s

still warning that it could follow Standard & Poor’s (S&P) lead and downgrade the Bahamas to ‘junk’ status within the next 12-18 months.

The Bahamian financial services industry, and access to the international payments system, are both vital to the credit rating, and Mr McCartney also warned that the potential ‘reputational hit’ could deter foreign direct investment (FDI) capital eyeing this nation.

“A lot of things can emanate from that,” he told Tribune Business, “in terms of international companies doing business with us, FDI being hesitant to come to the Bahamas. From an international point of view we rely heavily on FDI, and this raises a question mark in terms of persons coming to invest in this country. It affects the economy, monies coming into the country, our way of life.”

Pointing to the loss of financial services business that stemmed from the 2000 ‘blacklisting’, Mr McCartney said: “Our financial services industry, our banking industry, has taken another blow. “That is supposed to be our second industry. It has now taken a blow that is going to be equivalent to the blow we had in 2000 or even worse.”

BAIC suffers NIB pay delinquency FROM PAGE 1 Golden Gates MP, lamented the Corporation’s “dire financial straits” with outstanding debts standing at $3 million - including $1 million owed to the National Insurance Board (NIB). He added that its workforce had near-tripled during the Christie government’s tenure.

Mr Foulkes, during his mid-year Budget contribution, accused the former administration of “gross mismanagement” and “lack of fiscal responsibility” with regards to BAIC. Among its outstanding commitments, he added, was the $300,000 owed to Bahamas Power and Light (BPL). Mr Foulkes told Parliament that while BAIC’s solar system had been projected to save the Government 40 per cent on energy costs, it had no batteries or tie-in to the grid.

“The Corporation’s group medical coverage is

in a suspended status, but we are working towards the restoration of coverage soon,” Mr Foulkes said. “During most of the last five years the former government did not pay BAIC’s portion of its National Insurance Board (NIB) payments.

This resulted in BAIC owing in excess of $1 million to NIB. “Over the past five years, for the most part, BAIC deducted the employee portions from their monthly salaries representing the NIB portions, but BAIC did not pay the funds to NIB. Money was taken from the employees’ pay cheques but not paid to NIB. That amount is just under $700,000.

“The question is: What did they do with the employees’ money? Meanwhile this government is left to secure these funds during these pressing times.

We have paid the employees’ contributions that were deducted from their salaries in January and February,

and we intend to do likewise this month.”

Mr Foulkes then revealed that BAIC’s workforce had increased significantly under the previous administration - from 77 to 200 line staff and contractual workers. The Corporation has undergone two downsizing exercises since the Minnis administration took office.

He added that BAIC was moving to curb abuses with respect to land use and would crack down on delinquent tenants.

ADVERTISE TODAY IN THE TRIBUNE, JUST CALL 502-2394

THE TRIBUNE

Wednesday, March 14, 2018, PAGE 5

Gov’ts opponents: Did you ‘drop the ball’ on blacklist?

FROM PAGE 1

or a lackadaisical approach to governance.”

Mrs Komolafe acknowledged that the Bahamas had signed on to two Organisation for Economic Co-Operation and Development (OECD) tax information exchange and transparency initiatives, and its Base Erosion and Profit Sharing (BEPS) initiative - actions that were thought to have brought this nation into compliance with the EU’s anti-tax avoidance campaign.

“It is unfortunate that the Government, having expended much effort and resources in collaboration with the private sector to avoid this adverse listing, was unable to prevent the Bahamas from being blacklisted. Exactly what went wrong? The Bahamian people need to know,” she argued.

The Government, in its own statement, said the Bahamas had been ‘blacklisted’ “without discussion” yesterday by the EU. K P Turnquest, deputy prime minister, added that the EU’s comment over the “lack of commitment at the highest political levels” was “regrettable”.

He added: “The Bahamas government, through the Ministry of Finance, has consistently been engaged with the EU’s Code of Conduct Group and has responded to its requests.

“Prior to today’s meeting, at the level of the Deputy Prime Minister, the Bahamas reiterated its commitment by formal letter and is on schedule to meet the December 2018 deadline set by the European Council for implementation of the areas of concern indicated.

“The Bahamas remains committed to complying with international regulatory standards and initiatives, and will continue to hold discussions with the EU to determine how we can work together to ensure a better understanding and facilitation of the process to be removed

many sought an explanation for why the EU reacted as suddenly as it did given the Minnis administration’s belief that it had done everything necessary to keep this nation safe.

Arinthia Komolafe, the Democratic National Alliance’s (DNA) deputy leader, acknowledged that the EU and other international organisations were known to alter ‘the rules of the game’ in relation to the Bahamas and other small island financial centres when dealing with tax matters.

However, she urged the Government to explain “what went wrong” after the EU justified its ‘blacklisting’ of the Bahamas by stating this nation had failed to given “a high political level commitment” to address its concerns over corporate vehicles and structures being used for tax avoidance purposes.

And, pointing to the EU’s January 26, 2018, letter to the Government, Mrs Komolafe called on it to confirm whether it had met the February 28 deadline to provide an ‘action plan’ and implementation timetable to tackle the so-called “deficiencies” identified.

“While multilateral and international agencies are known to engage in the continuous shifting of the goal post in relation to tax co-operation or compliance, the EU’s commentary begs the question: Did the Government of the Bahamas drop the proverbial ball in this matter?” she asked.

“The Government must confirm that our nation’s response was delivered to the EU by the February 2018 deadline. The Bahamian people are hopeful that the Government did not put our financial services sector in jeopardy, and the country’s reputation at risk, due to a lack of focus, deficit of competence

COMMONWEALTH OF THE BAHAMAS IN THE SUPREME COURT

from this listing in the shortest time possible.”

Financial services industry executives, too, were suggesting that “something went wrong” in the final weeks during the run-up to yesterday’s ‘blacklisting’ confirmation.

One high-level executive, speaking on condition of anonymity, said many in the sector believed the Government was “delinquent” and missed the EU’s February 28 deadline to respond.

While agreeing with the Government that the Bahamas’ time on the ‘blacklist’ “may be shortlived”, the source said: “Even if we come off this list some damage will have been done, as it could have been prevented.

“Something went wrong.

It doesn’t add up. Either we did something or didn’t do something, or they [the EU] moved the goal posts to our detriment. The test will be how quickly we’re removed from the list.”

Another financial industry source, also speaking on condition of anonymity, added: “One of three things must have happened. Either somebody dropped the ball big time, there must have been a lack of communication and everyone thought we had until the end of the year, or the EU changed the goal posts on us again.”

They questioned why the EU “went straight to the nuclear weapon and put us on the ‘blacklist’ when the likes of British Virgin Islands (BVI), Dominica and Anguilla were placed on a ‘grey list’ of nations that are non-compliant but have committed to do so.

The source said the Bahamas now needed to implement “damage control” and assess whether there was likely to be any “substantive” impact for the financial services industry and wider economy aside from the “immediate reputational hit”.

Once any fall-out has been “mitigated”, they said

2014 COM/bnk/00079

the Bahamas needed to focus on escaping the EU’s ‘blacklist’, “get out of reactive mode and get ahead of this curve” to focus on business and growth opportunities.

“This is a significant reputational hit that we have to mitigate the best we can,” the source said, “and this could result in a higher scrutiny for transactions originating in this jurisdiction. We will have to assess in real terms how that affects the flow of business.”

They then echoed Mrs Komolafe in questioning why the EU would rush to ‘blacklist’ the Bahamas within two weeks of its self-imposed February 28 deadline to receive a response from this nation, especially when its previous statements had given countries until year-end 2018 to comply.

With the Government in constant communication with the EU in Brussels, and having seemingly addressed the three “deficiencies” identified in the January 26 letter, the source suggested this showed the “game has been changed” on the Bahamas.

“Why the big shift from the December deadline to the current date?” they asked. “It is a major shift by the EU for some reason.

It’s very strange. What changed, caused them to behave in this arbitrary way?”

While questioning whether the EU became frustrated and “lacked confidence” in the Bahamas, the source also suggested that the 28-nation bloc deliberately leaked its ‘blacklisting’ intentions to the Reuters news agency last week in a bid to pressurise this nation into bowing to its demands and possibly going even further.

“They were trying to get the Bahamas to come cap in hand and say: ‘How high do you want us to jump?’,” the source suggested.

Chester Cooper, the PLP’s deputy leader and finance spokesman, yesterday expressed concern that the EU was seeking to force the Bahamas to implement a corporate income tax.

“Is the EU suggesting we radically alter the model that has attracted billions of dollars in honest, fruitful foreign direct investment for fear that it somehow infringes on its ability to regulate the behaviour of its citizens?” Mr Cooper asked.

“I have foreshadowed that the actions of the EU and OECD will ultimately threaten the way we conduct business with foreign investors, which will be

COMMONWEALTH OF THE BAHAMAS IN THE SUPREME COURT

Bankruptcy and Insolvency

Bankruptcy and Insolvency

BETWEEN

BETWEEN

CARLTON A. MARTIN

AND

ROUSCHARD C. MARTIN (d/b/a Martin, Martin & Co. (A Firm) Judgment Creditors AND

________________________________

2014 COM/bnk/00079

CARLTON A. MARTIN

AND

ANTHONY R. MUNNINGS

directly scrutinised and attacked.”

Calling for every effort to “be made to have the Bahamas delisted as soon as possible”, Mr Cooper said the Bahamas needed to look past this and “proactively and progressively examine our economic model” to address both organisations’ concerns and position itself for future growth.

Pointing out that the Government’s last-ditch bid to avoid the ‘blacklisting’ through its mission to Brussels “appears to have been in vain”, the PLP deputy leader also urged Mr Turnquest to explain the EU’s allegation that the Minnis administration had been “non-responsive”.

ROUSCHARD C. MARTIN (d/b/aMartin, Martin & Co. (a Firm) Judgment Creditors AND ANTHONY R. MUNNINGS

Judgment Debtor

ORDER _________________________________ BEFORE His Lordship the Honourable Mr. Justice Ian Winder, a Justice of the Supreme Court of the Commonwealth of The Bahamas, sitting in Chambers, at the Supreme Court, 3rd Floor, Ansbacher House, Bank Lane, Nassau, N.P. The Bahamas on the 8th day of January, A.D., 2018.

UPON APPLICATION by the Judgment Creditors by Ex Parte Summons filed herein the 6th October 2017; AND UPON READING the Affidavit of Carlton A. Martin filed herein the 12th October 2017; AND UPON HEARING Norwood A. Rolle of Counsel for the Judgment Creditors IT IS ORDERED that: (i) The validity of the Creditors’ Petition be and is hereby extended for a period of six (6) months from the date hereof; (ii) The time for the service of the Petition and supporting documents be and is hereby extended; and (iii) The publication of the Order for substituted service together with the publication of the Notice and all other process once in the Nassau Guardian and the Tribune newspapers within seven (7) day interval shall be deemed to be good and sufficient service of the Petition upon the Judgment Debtor on the seventh day after publication AND IT IS FURTHER ORDERED that the said Petition will be heard before His Lordship the Honourable Mr. Justice Ian Winder, Justice of the Supreme Court, 3rd floor Ansbacher Building on Wednesday the 4th April, A.D., 2018 at 9:00 o’clock in the forenoon on which day you are requested to appear, and if you do not appear the Court may make a Bankruptcy Order against you in your absence.

BY ORDER OF THE COURT REGISTRAR

Judgment Debtor

____________________________________ NOTICE ____________________________________ To: ANTHONY MUNNINGS No. 77, Holiday Drive, South Beach, Nassau, N.P., The Bahamas TAKE NOTICE that a bankruptcy petition has been presented in this Court by CARLTON A. MARTIN and ROUSCHARD C. MARTIN of the Southern District of the Island of New Providence, and the Court has ordered that the publication of the Order for substituted service together with the publication of the Notice once in the Nassau Guardian and the Tribune newspapers within seven (7) day interval shall be deemed to be good and sufficient service of the Petition upon you on the seventh day after publication.

FURTHER TAKE NOTICE that the said Petition will be heard before His Lordship the Honourable Mr. Justice Ian Winder, Justice of the Supreme Court, 3rd floor Ansbacher Building on Wednesday the 4th April, A.D., 2018 at 9:00 o’clock in the forenoon on which day you are requested to appear, and if you do not appear the Court may make a Bankruptcy Order against you in your absence.

The Petition can be inspected by you on the application at the Court.

Dated the 17th day of January, A.D., 2018 NORWOOD A. ROLLE & CO. Chambers Suite #6, Gomez Building Dowdeswell Street, east of Christie Street Nassau, Bahamas Attorneys for the Judgment Creditors

PAGE 6, Wednesday, March 14, 2018

THE TRIBUNE

Gov’t targeting ‘quick EU blacklist reversal’

FROM PAGE 1

miscommunication” were largely responsible for the Bahamas’ ‘blacklisting’, but the EU had warned the Government - almost two weeks before the letter signed by Mr Johnson was dispatched - that it wanted “a firm commitment at high political level” that its concerns would be addressed (see other article on Page 1B) Besides the absence of a “high level political commitment”, the EU also justified its treatment of the Bahamas by arguing this nation had not done enough to prevent its corporate vehicles and structures from being used by clients - especially multinational corporations - for tax avoidance purposes.

“The Bahamas is added with the following text: ‘Bahamas facilitates offshore structures and arrangements aimed at attracting profits without real economic substance, and did not commit to addressing these issues

by December 31, 2018’,” the EU said of its ‘blacklisting’ rationale.

Financial services industry sources, speaking on condition of anonymity, yesterday said the Bahamas’ inclusion on the nine-strong ‘blacklist’ had provoked widespread dismay and concern throughout the sector.

Besides the potential damage to the Bahamas’

reputation, the sector fears the EU’s action may cause existing clients and their assets to depart as they will not wish to be domiciled in a ‘blacklisted’ jurisdiction. And such a status could also deter new business from coming.

“This was not well received,” one highlyplaced financial services executive revealed. “Persons are concerned. They are concerned about loss of business, and if we come off the blacklist the damage may have been done, as no one will want to do business in a ‘blacklisted’ jurisdiction.”

The EU’s 28 member states have yet to agree a co-ordinated package of sanctions/penalties against ‘blacklisted’ jurisdictions, but Bahamian companies - and individuals - doing business with Europe may see their transactions subjected to greater scrutiny and vetting as a result.

This, in turn, would slow the pace of commerce, while there could also be negative fall-out for the correspondent banking and custodial relationships enjoyed by Bahamian financial institutions.

If the ‘blacklisting’ results in foreign financial institutions viewing the Bahamas as ‘high risk’, it could lead to the loss and/or severing of such ties, which the Bahamian financial services industry - and wider economy - rely upon for cross-border commerce and capital flows.

Given the Bahamas’ status as an international business centre and services exporter, maintaining such links are vital to the sustainability of its economic model. But inclusion on the EU’s ‘blacklist’ could make it more vulnerable to global ‘de-risking’ trends that have already seen financial institutions, especially standalone entities that are locally owned, lose correspondent relationships with foreign banks.

While the international payments fall-out will likely be contained, given that the majority of overseas transactions originating in the Bahamas ‘clear and settle’ through the US, “on the flip side” the majority of its clients - and many Bahamas-based bank and trust companies - originate from Europe.

James Smith, a former minister of finance and exCentral Bank governor, also pointed out that there could be negative consequences for securities custodians, given that the processing of such trades was frequently carried out through the Euroclear system.

Mr Turnquest, though, told Tribune Business he did not want “to get too far down that track” in terms of the ‘blacklisting’s’ negative effects, given that the Minnis administration remained hopeful the EU might alter its decision when the Bahamas presents its full case.

“We’re hopeful and optimistic we will get this

reversed in short order,” the Deputy Prime Minister said, acknowledging that an adverse listing could cause “reputational damage, and we have done everything we can to avoid that”.

Moving to reassure the Bahamian public and financial services industry, Mr Turnquest added: “Right now, it’s number one priority for me. They can be sure it’s a priority issue for the Government, and we are committed to doing everything we can to get us off the list as quickly as possible and protect the reputation of the Bahamas.”

He suggested that miscommunication, and related misunderstandings, had contributed to the Bahamas’ ‘blacklisting’, not least that its ‘commitment letter’ was signed by a senior civil servant as opposed to a Cabinet minister.

“We’ve already submitted quite a bit of the information they required,” Mr Turnquest told Tribune Business. “If you look at the statement they [the EU] made, their primary statement was that we didn’t make a commitment at the highest political level.

“The February 8 letter to them was signed by the Financial Secretary. They wrote us back on March 2, saying they didn’t see a commitment from the highest political level. I sent them the same letter and signed it as Deputy Prime Minister.

“They did not respond to us until they day of the

MARKET REPORT TUESDAY, 13 MARCH 2018

t. 242.323.2330 | f. 242.323.2320 | www.bisxbahamas.com

BISX ALL SHARE INDEX: CLOSE 2,040.04 | CHG 0.00 | %CHG 0.00 | YTD -23.53 | YTD% -1.14 BISX LISTED & TRADED SECURITIES 52WK HI 4.38 19.17 9.09 3.76 1.64 0.18 4.60 8.70 6.30 5.30 11.87 2.59 1.56 8.21 6.10 10.55 9.85 4.50 12.51 11.00

52WK LOW 3.50 17.43 8.19 3.32 0.90 0.12 3.50 8.40 6.00 3.15 9.00 2.18 1.40 7.70 5.83 8.78 5.67 3.35 12.01 10.00

1050.00 1000.00 1000.00 1000.00

1000.00 1000.00 1000.00 1000.00

PREFERENCE SHARES

1.00 103.00 100.00 106.00 105.00 103.00 100.00 10.00 1.01

1.00 100.00 100.00 100.00 105.00 100.00 100.00 10.00 1.00

SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank Finco Focol J. S. Johnson Premier Real Estate Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Commonwealth Bank Class E Commonwealth Bank Class J Commonwealth Bank Class K Commonwealth Bank Class L Commonwealth Bank Class M Commonwealth Bank Class N Fidelity Bank Class A Focol Class B

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00 100.00

52WK LOW 100.00 100.00

SYMBOL LAST CLOSE AML 4.14 APD 17.43 BPF 9.09 BWL 3.34 BOB 1.00 BBL 0.18 CAB 3.60 CIB 8.70 CHL 6.10 CBL 4.64 CBB 9.87 CWCB 2.69 DHS 1.50 EMAB 7.83 FAM 6.10 FBB 10.10 FIN 6.40 FCL 4.47 JSJ 12.51 PRE 10.00 CAB6 CAB8 CAB9 CAB10 CHLA CBLE CBLJ CBLK CBLL CBLM CBLN FBBA FCLB

SECURITY Fidelity Bank Note 18 (Series E) + Fidelity Bank Note 22 (Series B) +

SYMBOL FBB18 FBB22

Bahamas Note 6.95 (2029) BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y

BAH29 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

MUTUAL FUNDS 52WK HI 2.13 4.14 1.99 178.69 153.40 1.54 1.70 1.62 1.10 6.99 8.54 6.15 10.52 11.46 10.46

52WK LOW 1.67 3.04 1.68 164.74 116.70 1.48 1.62 1.57 1.04 6.41 7.62 5.66 8.65 10.54 9.57

CLOSE 4.14 17.43 9.09 3.34 1.00 0.18 3.60 8.70 6.10 4.64 9.87 2.70 1.50 7.67 6.10 10.10 6.41 4.47 12.51 10.00

CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 -0.16 0.00 0.00 0.01 0.00 0.00 0.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

LAST SALE 100.00 100.00

CLOSE 100.00 100.00

CHANGE 0.00 0.00

109.54 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

-0.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

109.60 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund FG Financial Preferred Income Fund FG Financial Growth Fund FG Financial Diversified Fund FG Financial Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Royal Fidelity Int'l Fund - High Yield Fund Strategies Fund

VOLUME

600

3,080

VOLUME

4 | FG CAPITAL MARKETS 242-396-4000 | COLONIAL 242-502-7525 | LENO 242-396-3225

PUBLIC NOTICE

DIV$ 0.080 1.130 0.000 0.230 0.000 0.000 0.000 0.320 0.220 0.120 0.690 0.060 0.050 0.084 0.300 0.500 0.150 0.120 0.570 0.000

P/E 8.7 18.7 N/M 11.9 N/M N/M -2.5 13.6 10.5 27.1 15.6 26.5 4.5 N/M 5.4 13.6 7.7 15.0 23.0 0.0

YIELD 1.93% 6.48% 0.00% 6.89% 0.00% 0.00% 0.00% 3.68% 3.61% 2.59% 6.99% 2.22% 3.33% 1.10% 4.92% 4.95% 2.34% 2.68% 4.56% 0.00%

The Public is hereby advised that I, MACARAH TEARRAH EDGECOMBE of Lumamba Lane off Fox Hill Road, New Providence, Bahamas intend to change my name to NACARAH TEARRAH EDGECOMBE. If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Officer, P.O.Box N-742 Nassau Bahamas no later than thirty (30) days after the date of the publication of this notice.

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.00% 0.00% 0.00% 0.00% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 7.00% 6.50%

NOTICE is hereby given that RASHAAD RENARDO RIDDLE of General Delivery, Governor’s Harbour, Eleuthera, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 7th day of March, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, Bahamas.

INTEREST 6.00% Prime + 1.75%

YTD% 12 MTH% 0.31% 4.30% 0.16% 5.93% 0.17% 2.36% 4.66% 3.89% 5.58% 6.65% 0.36% 4.29% -0.15% 3.50% 0.23% 3.89% -0.34% 4.66% -1.08% 1.77% -5.96% -3.05% 1.90% 4.59% 7.24% 11.96% 2.77% 3.88% 3.94% 4.69%

MARKET TERMS BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings

multinational companies are taxed in the country where they are generated.

Multinational companies often use legitimate tax avoidance strategies to “exploit gaps and mismatches” between different countries’ tax rates and rules, and “artificially shift profits” to low or ‘no tax’ jurisdictions despite conducting no or minimal business there. This enables them to minimise their tax exposure by paying a lower rate than they otherwise would in countries where they do conduct business.

It is these activities that the EU is also determined to crack down on, and compliance with anti-BEPS measures is one of the three ‘criteria’ it is using when judging whether to ‘blacklist’ countries.

Mr Turnquest, meanwhile, said the Bahamas had to address “several bits of legislation” to comply with the EU’s demands.

He declined to detail what changes/new laws were required, other than to confirm they were being drafted and would be ready shortly. “There are several pieces of legislation that need to be harmonised to address the standard, which we’re working on,” he told Tribune Business.

Carl Bethel QC, the Attorney General, also declined to give specifics other than to confirm the Government was working to remove the Bahamas from the EU’s ‘blacklist’ “forthwith”, with Mr Turnquest and the Ministry of Finance leading the effort.

“We’re moving very quickly in close consultation with the Ministry of Finance, and have every intention of moving expeditiously as guided by them,” he said of the legal reforms.

EPS$ 0.475 0.932 -0.306 0.281 -1.133 0.000 -1.465 0.638 0.583 0.171 0.631 0.102 0.330 0.000 1.129 0.743 0.832 0.298 0.543 0.000

6.95% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25% NAV 2.13 4.12 1.99 178.69 153.40 1.54 1.69 1.62 1.09 7.16 8.40 6.29 11.28 11.60 10.21

Reuters article. We actually got back to them. We called them, spoke to them, followed up with formal letters and submitted draft legislation. We then came over to have the conversation with them here.”

Mr Turnquest, together with Brent Symonette, minister of financial services, will today meet with officials from the EU ‘Contact Group’, which has primary responsibility for the ‘blacklisting’, to argue the Bahamas’ case for removal.

“It’s obvious that they did not take into account our submissions after the initial ones signed by the Financial Secretary, otherwise the initial statement they [the EU] made could not hold up,” he told Tribune Business.

“It’s a matter of them taking these submissions we’ve made, reevaluating them and, hopefully, we can have this situation resolved... We’re very committed. It was recommitted by myself two times, verbally on the phone, and in a series of e-mails back and forth with various people.

It’s obviously more a timing issue and miscommunication which is why we’re on it.”

Mr Turnquest said there was also “a bit of inconsistency” in the EU’s approach to the Bahamas, given that it accepted this nation’s compliance with its automatic tax information exchange demands. The only issue outstanding, and highlighted by Europe yesterday, related to the Base Erosion and Profit Shifting (BEPS) initiative.

The BEPS initiative, which is being driven by the Organisation for Economic Co-Operation and Development (OECD), aims to ensure that the profits of

YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful

MATURITY 31-May-2018 19-Oct-2022 20-Nov-2029 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022 NAV Date 31-Jan-2018 31-Jan-2018 26-Jan-2018 31-Dec-2017 31-Dec-2017 31-Jan-2018 31-Jan-2018 31-Jan-2018 31-Jan-2018 30-Nov-2017 30-Nov-2017 30-Nov-2017 30-Nov-2017 30-Nov-2017 30-Nov-2017

INTENT TO CHANGE NAME BY DEED POLL

NOTICE

NOTICE

NOTICE is hereby given that ADRAIN EMILIEN of Baillou Hill Rd., New Providence, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 14th day of March, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, Bahamas.

PUBLIC NOTICE

INTENT TO CHANGE NAME BY DEED POLL The Public is hereby advised that I, INIKI DEANDREA WALTERS of Pine Forest, Eight Mile Rock, Grand Bahama, Bahamas intend to change my name to INIKI DEANDREA KEMP. If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Officer, P.O.Box N-742 Nassau Bahamas no later than thirty (30) days after the date of the publication of this notice.

NOTICE

NOTICE is hereby given that GUERLINE CHARLES of Key West Street, New Providence, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/ naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 7th day of March, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, Bahamas.

THE TRIBUNE

Wednesday, March 14, 2018, PAGE 7

EU warning to Bahamas: Tax system ‘harmful’ FROM PAGE 1 Bahamas also failed to satisfy its requirement for combating tax avoidance, especially by multinational companies. Both factors were cited as critical to the ‘blacklisting’ decision, with the contents of its January 26 letter suggesting that a combination of complacency by the Bahamas, miscommunication and a ‘moving of the goal posts’ by the EU resulted in this nation suffering such a fate.

An ‘Annex’ to the EU’s letter identified the alleged “deficiencies” in the Bahamas’ legal and regulatory regime, setting out three issues that had to be addressed by this nation before it would be regarded as ‘cooperative’ in the fight against tax avoidance.

The three “proposed actions” demanded of the Bahamas were: * Confirming its commitment to “sign and ratify” by end-December 2018 the Multilateral Competent Authority agreement for the Common Reporting Standard (CRS), which has been adopted as the global standard for automatic tax information exchange.

The EU also gave the Bahamas the option of establishing “a network of arrangements” through which it could automatically share such details with all 28 EU member states. * Confirm its commitment, and the timeline, for signing on to and ratifying the Organisation for Economic Co-Operation and Development’s (OECD) Multilateral Convention

on Mutual Administrative Assistance in Tax Matters. * Finally, confirm its commitment, and timeline, for joining the OECD’s Base Erosion and Profit Shifting (BEPS) Inclusive Framework, and implementation of the ‘minimum standard’.

K P Turnquest, Deputy Prime Minister, and Brent Symonette, minister of financial services, signed the Bahamas on to the first two EU demands when they visited Europe preChristmas 2017. Legislation to give effect to these commitments was subsequently passed by Parliament, while the Government also gave commitments to join the BEPS initiative and meet the minimum standard.

But, despite the Bahamas seemingly addressing the three “deficiencies” identified on January 26, the EU appears to have ‘circled back around’ to focus on the potential use of Bahamas-domiciled corporate vehicles and structures for tax avoidance purposes even though this was not set out in the ‘Annex’.

That issue is admittedly tied to BEPS, and the Government may not have paid enough attention to it in the belief that it had addressed all the “deficiencies” set out in the ‘Annex’ and would be fine. It also appears to not have recognised that ‘high political level’ referred to a Cabinet minister, not a civil servant, when it came to making commitments on the Bahamas’ behalf.

The EU also appears to have ‘changed the goal posts’ on timelines, given that its initial ‘blacklist’

NOTICE GRUNWALD INVEST LTD. NOTICE is hereby given as follows: (a) Grunwald Invest Ltd. is in Voluntary Dissolution under the provisions of Section 138(4) of the International Business Companies Act 2000. (b) The Dissolution of the said Company commenced when the Articles of Dissolution were submitted to and registered by the Registrar General of the Commonwealth of The Bahamas. (c) The Liquidator of the said Company is Beatus Limited, P.O. Box N7776-348, N.P., Bahamas.

announcement in early December 2017 appeared to give the Bahamas and seven other storm-hit Caribbean countries until year-end 2018 to address its concerns.

Staying true to its earlier promise to resume ‘contact’ with the Bahamas and other seven nations by February 2018, the EU’s January 26 letter demanded: “We would now need a firm commitment at high political level that the Bahamas will address the deficiencies identified in Annex I, which were already mentioned in Annex I of our letter of November 7, 2017.

“Such a commitment would allow the Code of Conduct Group to positively consider future changes in our ongoing work. Moreover, the compliance of your legal and regulatory framework has in particular been assessed with reference to criterion 2.2 of the set criteria.”

This criterion was the one used to justify yesterday’s ‘blacklisting’ of the Bahamas. It demands that countries not permit corporate structures that allow companies to move, and book, profits and losses if they have no physical presence - or conduct no substantial activities within that jurisdiction.

“Jurisdictions should not facilitate offshore structures or arrangements aimed at attracting profits which do not reflect real economic activity in the jurisdiction,” the EU letter told the Minnis administration. “In doing this analysis, the absence of

corporate income tax or a nominal corporate income tax has been taken into account....

“Following a technical analysis the main concern relates to de facto lack of substance, which may be due to the absence of legal substance requirements, for entities doing business in or through your jurisdiction.

“The absence of legal substance requirements.... increases the risk that profits registered in a jurisdiction are not commensurate with economic activities and substantial presence, which is a concern from the perspective of criterion 2.2. In light of this, experts have provisionally considered the tax system of Bahamas as harmful.”

The EU then urged the Government to “verify” if the Bahamas “intends to address the identified concerns and commit to future changes”.

It added: “We invite the Bahamas to co-operate with the Code of Conduct Group and commit, at a high political level, to addressing the above mentioned concerns.

In particular, to address the issues that arise in connection with entities operating without any substance, the Bahamas is asked to give reassurances to EU member states on this issue.”

The EU letter then laid out a ‘road map’ on how the Bahamas can comply with its demands without implementing a corporate income tax, which many observers believe is its ultimate goal for this nation.

The ‘road map’ laid out sounds similar to the

legislative changes revealed to Tribune Business at the weekend by Carl Bethel QC, the Attorney General. He disclosed that his ministry had completed the draft of a Bill that will impose ‘country-by-country’ reporting of profits and losses on Bahamian entities that are part of a multinational company’s corporate network, once the latter’s consolidated annual revenues are above a certain threshold.

“The Bahamas is asked to discuss with the [EU] what further steps could better ensure that businesses have sufficient economic substance,” the letter said.

“A way to achieve this could be through the imposition of substance requirements, where appropriate. Moreover, this may require that you introduce additional accounting and tax reporting obligations such that an appropriate notification regime for entities that give rise to the risks and concerns underlying criterion 2.2 can ensure the collection and subsequent exchange of relevant information with member states.”

Either way, regardless of whether the Bahamas is forced to impose a corporate income tax or not, it will likely face more red tape and costs as a result of having to meet the EU’s demands, further impairing its competitiveness.

The EU also appeared to take issue with the preferential tax regime offered to non-resident companies in the international side of the Bahamian economy, writing: “Since the same

technical analysis revealed that, in your jurisdiction, legal mechanisms exist that enable the granting of advantages only to non-residents or in respect of transactions carried out with non-residents, in particular, through the incorporation of entities which are not permitted to carry on business in your jurisdiction, we would like to take this opportunity to verify whether Bahamas intends to address the identified concerns and commit to future changes.”

The letter concluded by asking the Bahamas for a “precise timeline and a description of the steps” it planned to take to address the EU’s concerns by February 28, 2018. It warned: “The Code of Conduct Group will continue monitoring the commitments taken by the identified jurisdictions to consider whether they have been fulfilled and, as the case may be, will recommend an update to the EU list of non-cooperative jurisdictions for tax purposes.”

ADVERTISE TODAY IN THE TRIBUNE, JUST CALL 502-2394

NOTICE Total Alpha Ultimate Fund (SAC) Ltd. (Voluntary Liquidation) Notice is hereby given that, in accordance with Section 138 (4) of The International Business Companies Act 2000 the abovenamed Company is in dissolution, which commenced on the 12th, day of March 2018.

The Liquidator is Kim Thompson of Nassau Bahamas.

Dated this 14th March, 2018

Beatus Limited Liquidator

Kim Thompson (Liquidator) NOTICE EXXONMOBIL EXPLORATION AND PRODUCTION NEW OPPORTUNITIES (TWO) LIMITED Pursuant to the provisions of Section 138 (8) of the International Business Companies Act 2000, notice is hereby given that the above-named Company has been dissolved and struck off the Register pursuant to a Certificate of Dissolution issued by The Registrar General on the 21st day of February, 2018 Dated the 14th day of March, A.D., 2018.

R.W. Rice Liquidator of EXXONMOBIL EXPLORATION AND PRODUCTION NEW OPPORTUNITIES (TWO) LIMITED

NOTICE

BEST PEACE LIMITED N O T I C E IS HEREBY GIVEN as follows: (a) BEAST PEACE LIMITED is in voluntary dissolution under the provisions of Section 138 (4) of the International Business Companies Act 2000. (b) The dissolution of the said company commenced on the 8th March, 2018 when the Articles of Dissolution were submitted to and registered by the Registrar General. (c) The Liquidator of the said company is Bukit Merah Limited, The Bahamas Financial Centre, Shirley & Charlotte Streets, P.O. Box N-3023, Nassau, Bahamas Dated this 14th day of March, A. D. 2018 _________________________________ Bukit Merah Limited Liquidator

PAGE 8, Wednesday, March 14, 2018

THE TRIBUNE