business@tribunemedia.net
MONDAY, DECEMBER 13, 2021
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‘Make this the last VAT change for a long time’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net RETAILERS have been given a 90-day transition period to deal with the repricing “nightmare” caused by the VAT rate cut, one saying yesterday: “We hope this is the last change for a very long time.” Tara Morley, the Bahamas Federation of Retailers co-chair, while welcoming VAT’s reduction to a 10 percent rate told Tribune Business that the timing of its implementation threatens to create “a big distraction” for merchants just when they need to be focusing on maximising a Christmas sales season that could make the difference to post-COVID survival for some. Besides the computer system and software adjustments required by the two percentage point VAT rate cut, Bahamian retailers also have to alter their in-store and warehouse inventory pricing to account for the 10 percent levy that will be introduced on January 1, 2022.
• 90-day transition for retail repricing ‘nightmare’ • Super Value chiefs fear duration ‘cuts it short’ • Hotel concern: New rate on ‘year’s busiest day’ Kendrick Moss, Super Value’s operations manager, described this re-pricing as “a massive undertaking” for the 13-store supermarket chain given that it is dealing with 30,000 separate stock keeping units (SKUs) each with multiple items underneath them. He hinted that 90 days may be too short a time in which to accomplish this properly. And both Ms Morley and Rupert Roberts, Super Value’s president, said neither of them had received formal government communication of the 90-day repricing “transition”
MICHAEL HALKITIS
RUPERT ROBERTS
which was confirmed to this newspaper by Senator Michael Halkitis, minister of economic affairs. Responding to Tribune Business questions by voice note, he said the Government expected the switch to the new, lower VAT rate to “be smooth” while anticipating that all VAT registrants - companies that collect the tax on the Government’s behalf - will “for the most part” be ready on January 1. However, retailers and merchants are not alone in their disquiet about the timing of the New Year’s Day
SEE PAGE 11
‘Extraordinarily high’: Transport costs now 20% of goods prices By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A WELL-KNOWN Bahamian retailer is advising locals “to shop early because prices will not be going down” with transport costs accounting for an “extraordinarily high” 20 percent of product costs. Andrew Wilson, the Quality Business Centre (QBC) and Fashion on Broadway principal, told Tribune Business that post-COVID demand and supply chain woes mean that consumer goods prices are unlikely to start declining before the second half of 2022.
Suggesting that all retailers will “have some holes” in their inventory this Christmas shopping season, he nevertheless forecast that his retail formats will perform as well as in past festive periods due to counter-balancing factors - not least the tighter US vaccination and testing requirements, which may prevent or deter many Bahamians from heading to the US retail giants. “The supply chain is really impacting everybody,” he told this newspaper in a recent interview. “Having said that, I do have inventory. There are holes in my inventory
SEE PAGE 6
Cruise port the ‘canvas for the Bahamian story’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net NASSAU Cruise Port’s $300m transformation is “creating the canvas upon which Bahamians will tell their story” and entice more visitors to leave their vessels, its top executive says,. Michael Maura, the Prince George Wharf operator’s chief executive, said the marine and amenities upgrades will provide the platform for “authentic” Bahamian products, entertainment and culinary experiences that can reestablish Nassau’s identity
MICHAEL MAURA as a waterfront destination with numerous attractions and things visitors can do. “From a branding perspective, what we’re looking to do is create a unique identity for the
SEE PAGE 8
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Pushed to ‘brink of collapse’ through 40% cost hikes By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net AN EX-BAHAMIAN Contractors Association (BCA) president yesterday said many contractors are “on the brink of collapse” due to fixed-price contracts that exclude the impact of 40 percent cost hikes. Leonard Sands, disclosing that he himself has experienced this pain, told Tribune Business that many in the construction industry are sustaining losses because contracts are not being adjusted to account for the sharp post-COVID increase in building materials costs. He explained that this was a particular problem with bank-financed mortgages, where the construction contract set a fixed value that cannot be adjusted for inflation. When increased materials costs push the work beyond this price, contractors are seeing their profit margins wiped out and having to eat these losses.
LEONARD SANDS With post-COVID demand, as well as the supply chain backlog, combining to drive construction material prices up by 40 percent “across the board”, Mr Sands told this newspaper: “Contractors are suffering because of fixed contracts, especially bankfinanced contracts that don’t adjust for inflation. “If the market goes up and down, it’s always the contractor that takes the hit. Construction financed through the private sector
SEE PAGE 7
PAGE 2, Monday, December 13, 2021
THE TRIBUNE
COMBATING THE THREAT POSED BY CYBER RISKS T
HOSE who do not know the language of cyber security may think the topic is foreign. Compliance professionals should not forget that conversations about compliance, dripping in apparently infinite acronyms, can also sound foreign to those unfamiliar with the subject. Our lives are increasingly dependent on the Internet, so it is now crucial to be proactive and vigilant about protecting ourselves, and our companies, from cyber threats. For the avoidance of doubt, and for the purposes of this article, cyber hygiene and cyber security are not synonymous but are inter-related. Cyber hygiene refers to methods and actions that computer users take to maintain the integrity of their systems, and increase the security of their online
By
Derek
Smith activities. Whereas cyber security is the process of preventing cyber-attacks on systems, networks and programs, thereby exceeding the practices of the computer user only. This article will briefly underline steps that the modern
compliance leader should take to enhance their company’s cyber hygiene.
framework and practice of your company versus what is required legally.
Implement a cyber security maturity and risk assessment As I noted in a previous article, risk assessments allow businesses to strategically identify, assess and prepare for any danger, hazards and other potential disasters that could derail their goals and objectives. Based on this position, an assessment should be completed on the governance and leadership structure surrounding cyber risk management. Then, an evaluation of the company’s cyber hygiene culture should be performed. Additionally, an examination and testing of the business continuity framework as it relates to cyber risk should be completed. Finally, a gap analysis between the
Collaborate on people and processes The management of cyber security requires a cross-functional approach because it is an enterprisewide issue. Based on the cyber risk assessments performed, the development of a sustainable remediation plan to address deficiencies should be designed with enterprise-wide input. This integrated, instead of siloed, approach enables compliance to use its strong systemic reach across the company to facilitate meaningful and effective plans that are automatically agreed to by key stakeholders. Develop robust compliance testing frameworks
A successful ethics and compliance programme must incorporate testing and monitoring. Testing and monitoring, as well as the data that is collected, provide stakeholders with relevant information that can be relied upon by regulators, boards, senior management and internal and external customers. According to Deloitte, this step is crucial to building a world-class compliance programme. Every level of a company should be subject to compliance testing. By designing your compliance testing framework, deficiencies in controls can be quickly identified, assessed and addressed. Conclusion In short, the compliance function must now play a much more integral role in any company’s crossfunctional cyber security programme to ensure these
BDB AND FOUNDATION IN BID TO STRENGTHEN TIE-UP By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE BAHAMAS Development Bank (BDB) has moved to strengthen its partnership with the One
Eleuthera Foundation as part of its drive to boost Family Island growth. Following the signing of a Memorandum of Understanding (MoU) between the two sides earlier this year, the Government-owned
bank hosted a courtesy call with the foundation. The latter was represented by Lane Glaze, president of One Eleuthera Foundation-US; Yolanda Pawar, its chief communications
officer; and Keyron Smith, chief project officer. They were received by Senator Quinton Lightbourne, the bank’s chairman; Ashley Outten, its financial controller; Troy Sampson,the BDB’s business development manager; and Sumayyah Cargill, unit head of strategic development and initiatives. BDB is mandated by the Bahamas Development Bank Act 197, to promote industrial, agricultural and commercial development through financing and investing in approved enterprises. One
Eleuthera Foundation is a non-profit community development organisation that collaborates with different community actors and groups to address Eleuthera’s challenges and opportunities. One Eleuthera Foundation undertakes projects and programmes that focus on sustainable development in five key areas: Education, the economy, environment, health and heritage. It has developed a comprehensive plan for the island, and both organisations emphasise development impact with a sustainable, inclusive focus.
efforts are properly risk assessed, enterprise-wide; are consistent with regulatory requirements; deeply infused into the cyber consciousness of stakeholders; and effectively monitored. Jr
NB: About Derek Smith
Derek Smith Jr. has been a governance, risk and compliance professional for more than 20 years. He has held positions at a TerraLex member law firm, a Wolfsburg Group member bank and a ‘big four’ accounting firm. Mr Smith is a certified anti-money laundering specialist (CAMS), and the compliance officer and money laundering reporting officer (MLRO) for CG Atlantic’s family of companies (member of Coralisle Group) for The Bahamas and Turks & Caicos. The meeting touched on opportunities for both entities to collaborate in supporting Eleuthera’s development. These areas included the Cravo Cooling House, poultry housing and partnerships in the Learn and Earn education and vocational training series. BDB provided a small grant to qualifying students from this year’s Learn and Earn hydroponics course, and indicated an interest in continuing with upcoming groups. The BDB intends to travel to Eleuthera in 2022 to visit the One Eleuthera Foundation facilities discussed, and progress financing opportunities for persons on that island.
L TO R: Yolanda Pawar, One Eleuthera Foundation’s chief communications officer; Sumayyah Cargill, unit head, BDB strategic development and initiatives; Senator Quinton Lightbourne, BDB chairman; Keyron Smith, One Eleuthera Foundation’s chief project officer; Lane Glaze, One Eleuthera Foundation-US president.
SCOTIABANK NAMED BANK OF THE YEAR IN BAHAMAS SCOTIABANK (Bahamas) has announced that it has been named Bank of the Year 2021 by UK Financial Times publication, The Banker. The latter, via the annual Bank of the Year awards, assesses banks on their ability to deliver results, improve strategic positioning and enhance service to customers. As with the 2020 awards, this year banks were also judged on their response to the COVID-19 pandemic. “It is truly an honour for us to be named Bank of the Year 2021,” said Roger Archer, Scotiabank (Bahamas) managing director.
“Despite challenges brought on this past year by COVID-19, we have remained committed to delivering best-in-class banking services for our customers and, in doing this, we have significantly accelerated our digital strategy in order to meet the evolving preferences. “During this, our 65th anniversary, we are very proud of our current advancements and the opportunities that we are creating to offer more personalised services for our customers in the future.” Scotiabank was awarded Bank of the Year Barbados 2021; Bank of the Year
Cayman Islands 2022; and Bank of the Year Turks and Caicos 2021. The Banker is the world’s longest-running international banking magazine, providing economic and financial intelligence for the world’s financial sector. It selects one winning bank for each of the 120 countries judged. Over 1,000 applications are collected each year, and judges select winners based on which bank they believe has made the most progress over the past 12 months.
THE TRIBUNE
Monday, December 13, 2021, PAGE 3
RBC REVERSES END TO ISSUING $20 NOTE ROYAL Bank of Canada (RBC) has reversed its decision to stop issuing $20 notes via its automated teller machine (ATM) network as a result of significant customer push back. The Canadian-owned bank, in a statement, said it has reintroduced the denomination at its onsite ATM infrastructure after initially deciding to totally discontinue issuing $20 notes back in late August/early September. “We heard from clients and listened to their feedback regarding our recent decision to change the bill mix in our Bahamian ATMs,” said LaSonya Missick, RBC’s managing director and vice-president for personal banking, The Bahamas and Turks and Caicos. “Based
• Move comes in response to customer push back on that feedback, I am pleased to advise that we will reintroduce the $20 note at our branch ATMs across The Bahamas.” The $20 notes will be available at all RBC ATMs that are co-located with the bank’s branches, and at the ATMs located at RBC’s regional headquarters on East Hill Street in Nassau. RBC ATMs that are off-site, such as those found at grocery stores, gas stations or convenience stores, will continue to offer notes in $50 and $100 denominations. “While our initial decision was based on data
regarding client banking habits, we recognise the importance of listening to our clients and our communities,” added Ms Missick. “Sometimes we need to change course. Our clients are at the centre of everything we do and we want to continue providing them with more convenience and more flexibility when banking with RBC.” The reintroduction of the $20 notes at branch ATMs on New Providence took place between December 9-10, with the same occurring at Family Island branch ATMs between December 10 and 15.
COVID’S ‘CAPTIVE AUDIENCE’ AIDS DIGITAL PAYMENT GROWTH By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net A DIGITAL payments provider says COVID-19 accelerated the industry’s growth because it created a “captive audience” for its services. Keith Davies, Kanoo’s chairman and chief executive, told the Nassau Technology Summit that the global pandemic forced consumers to adopt new technology and methods of conducting business faster than otherwise might have occurred. Noting that the Central Bank of The Bahamas has been leading the way with the Bahamian digital currency, the Sand Dollar, he added: “The Central Bank digital currency is world class. It is the first in the world of its kind.”
Building on that platform, Mr Davies said he does not now want to do business with anyone who is not using some form of digital payment system. Remarking on Kanoo’s success to-date in facilitating digital cash transfers, he added: “You can start doing transactions using your phone, or using some digital wallet. We’re not talking about traditional with money, cash in hand, money in the bank. We are the exact opposite. All you need is your ID and you download the app. That’s it.” Kanoo has grown to over 20,000 users, Mr Davies said, with that number continually growing by the day. “What we had with COVID-19 was a captive audience. Our services were different but, most importantly, we completed it. So even though our technology was new, we were successful,” he added.
Kimwood Mott, the Central Bank’s project manager for Sand Dollar implementation, added that businesses operating with cash in today’s economic climate only carry additional costs and have to be concerned about security. Championing the growth of digital payment providers such as Kanoo, and their integration - together with the Sand Dollar - with standard commercial banks, he said: “The financial system integration allows people who have wallets to seamlessly transfer funds between their commercial banks. “This makes mediation, and the redemption process, a lot smoother. You want to try to make some sort of digital products or services available 24/7. As I said, it is the fastest form of payments.”
GB TOURISM REVIVAL CONCERN ON GRAND LUCAYAN, AIRPORT By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE Grand Lucayan hotel and Grand Bahama International Airport are vital assets that cannot work without each other to revive the island’s dormant tourism product. Grand Bahama businesses say both need to be opened simultaneously for tourism to work on the island, for “if no persons coming then it is pointless” to reopen the resort. Alfredo Bridgewater, owner/operator of Coco Nutz, told Tribune Business that his business - located not too far from the Grand Lucayan - is depending on the resort’s long-pending sale to the ITM Group/Royal Caribbean joint venture to be completed soon. He said: “I hope something can go through with it. I’m really banking on some investment, and I’m hoping something to do with the airport would come on stream because that is affecting the rooms and the occupancy, which directly affects my business. I hope both sides can work it out but I understand with COVID-19 and money.” Noting that Port Lucaya is a “ghost town” without any Grand Lucayan guests, Mr Bridgewater added: “The hotel is vitally important to businesses in the Port Lucaya area. The cruise ships slowed and the Grand Lucaya was only at 30 percent capacity, and they only had a few guests in, but even that was good, so I was really looking forward to them reopening fully.” Tenisha Carey, owner/ operator of Baha Gala, added: “There’s been so much up and down information, and we don’t know
what to believe. We can’t confirm what we don’t know. I think it’s a touch and go situation. “I think we just want it to to be done and somebody make a purchase and do something with it. Every time we hear that somebody is purchasing, and we don’t have any relief. We just want to see it happen.” While there is “nothing wrong” with the Grand Lucayan property in Ms Carey’s estimation, she feels the absence of properly functioning airport is deterring investors from looking at Grand Bahama as a viable tourism option. “I think if we can get enough airlift, and enough flights to get heads in beds, it would be OK,” she added. “It’s one thing to go ahead and create this beautiful resort, but if they have no persons coming on the island then it’s pointless. It’s a double-edged sword. Persons aren’t coming into the island because we don’t have any beds to place them in because we don’t have enough hotels open.” “That’s why we were happy with Royal Caribbean because we know that they had alliances with aircraft and, of course, cruise ships, so it made sense. The Government can take over the Grand Lucayan again, but we are going to need heads in beds and tourists coming in like Nassau. We need flights coming in. There is no sense putting up a hotel and we don’t have flights coming in.” Another Grand Bahama business owner, who spoke to Tribune Business under condition of anonymity, said: “This Grand Lucayan
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deal has been really disappointing. I honestly stopped following the story because it has been delayed so many times by the previous government, and now the new government seems to be as lost as the previous one on this. “Breaking the arrangement with Royal Caribbean is not what anyone in Grand Bahama wants to hear right now. That’s for sure. I know we don’t want the Government back in charge of it either.”
Back in October, RBC told Tribune Business that it had stopped issuing $20 notes via its ATM network as part of efforts to drive Bahamians towards digital banking. Ms Missick, said then that the bank saw the move as part of a “cash reduction” strategy amid the belief that clients are increasingly turning to electronic and digital channels to conduct regular financial services transactions. “RBC’s decision to discontinue the issuance of $20 bills from our ATMs is a part of our digital transformation strategy,” Ms Missick confirmed then. “Cash reduction is a key component in
shaping how we operate in an increasingly digitised and rapidly-changing world. “Before making this business decision, we examined the usage of our ATMs and discovered a very low percentage of clients withdrawing $20 bills. Clients can access any denomination from inside the branch despite only issuing $50 and $100 bills at the ATM. “Additionally, we encourage clients to use their debits cards for smaller purchases at point of sales (POS) devices. We recognise more clients are seeing the advantages to completing their day-today banking transactions digitally, as we continue to
see this digital adoption grow, especially during the pandemic.” Some observers, though, argued that RBC was also benefiting financially from its digital banking drive as it earned increased fee income from greater usage of debit and credit cards by its clients. And the move drew displeasure from RBC clients on social media. One commentator said: “RBC sucks”, while another added: “I guess they want all of their customers to use debit cards instead.” Another Facebook user said: “That’s horrible, RBC needs to get it together.”
RELOCATION NOTICE Wells Legal & Corporate Services Church Street Plaza | Suite 1 Second Floor 138 Shirley Street Nassau, Bahamas Tel: 242 325-4618 | 242 325 4619 242 325 4177
OFFICE HOURS Monday Tuesday Wednesday Thursday Friday
9:00 to 5:00 9:00 to 5:00 9:00 to 5:00 9:00 to 5:00 9:00 to 3:00
PAGE 4, Monday, December 13, 2021
THE TRIBUNE
MINISTRY LAUNCHES COUNCILS TO AID SUSTAINABLE TOURISM THE Ministry of Tourism has launched the Bahamas Destination Stewardship Council initiative in a bid to promote sustainable lifestyles in Eleuthera and Harbour Island. The moves comes after the ministry joined the Global Sustainable Tourism Council (GSTC) earlier this year with the ambition to meet global standards in travel. The GSTC is a non-profit organisation that promotes sustainable development of tourism worldwide. Kristal Bethel, the ministry’s senior director of sustainable tourism, said: “Sustainable tourism is a deliberate effort on the part of tourism planners and policymakers to minimise the negative effects of tourism
on the environment, community and the country’s resources.” The Bahamas Destination Stewardship Council initiative aims to educate and unite communities through a collaborative effort involving all key stakeholders in the tourism industry, including locals, government agencies and business operators, to holistically maintain the destination’s key attractions - be they aesthetic, economic, environmental or cultural. Ms Bethel added: “The initiative directly delivers sustainability education in our communities, who are then encouraged to become involved with destination management and become stewards of their
environment and cultural traditions.” Sandra Russell, director of the Family Island Development department, said: “The formation of Sustainable Destination Stewardship Councils in our Family Islands is certainly a game changer for the islands. “The work of these councils will propel our islands towards sustainability, ensuring our island destinations and businesses are viable, competitive and equipped to achieve longterm success. “We are extremely excited to be a part of this project with an end goal of being recognised as a sustainable destination, improving the visitor experience and addressing the
needs of host communities. It’s a win-win situation for us.” The Destination Stewardship programme chose four islands to execute the sustainable lifestyle initiative: Eleuthera, Harbour Island, Andros and Exuma. These four Family Islands will organise councils, comprised of members from both the public and private sector, to discuss and design eco-friendly and culturally enriching projects. Some projects include the restoration, beautification and preservation of historical sites such as the Hatchet Bay Caves, and organising projects such as Light Up Eleuthera, an initiative to add more lights on the Eleuthera roadside. The initiative will also focus
on promoting a healthier lifestyle. Bekera Taylor, the Eleuthera Sustainability Council Cooperative Society’s chairperson, said of the initiative: “It’s about our heritage, it’s about our environment, it’s about people connecting to make a difference within their island, collaborating to make the island better and stronger. We’re people connecting trying to enhance what we have already been blessed with.” The councils have collaborated with community members in Eleuthera and Harbour Island to create strategies such as trash management, and the recycling and installation of additional solar lights, to increase sustainability on
both islands. The councils plan to educate visitors and residents about various landmarks on the islands. Antoine Brown, a member of the Briland Sustainable Council, said: “Sustainability is everyone’s business, and I want everyone to be aware of what can cause harm and what needs to be preserved. It is our way of life that is being threatened, and we need to take these things seriously. The smallest little bit helps.” For those interested in the Bahamas Destination Stewardship Council Initiative, please contact the Ministry of Tourism’s office in Governor’s Harbour, Eleuthera at 458-6314 or the Eleuthera Sustainability Council Facebook Page.
GOVERNMENT PRIORITISES REPAIRS TO ABACO DOCKS A CABINET minister says post-Dorian repairs to multiple Abaco docks, including those in Murphy Town and surrounding communities, are high on the Government’s infrastructure priority list. “We have already in the Ministry of Works scopes prepared for some of those docks, and will be giving those kinds of infrastructure priority because they are centres of economic activity, fishing, also for domestic tourists as well as foreign tourists, who go to these places to experience the Bahamian culture,” said Alfred Sears, minister of works and utilities. During a visit to Abaco and the surrounding cays last week, Mr Sears along with a technical team that included director of public works, Melanie Roach, inspected ramps, docks, sea walls, roads, the Little Rock Bridge, the Wilson City power plant and public buildings (schools included). Mr Sears said work such as the Little Abaco Bridge
ALFRED SEARS, minister of works and utilities, speaks to works director, Melanie Roach, and other Ministry of Works representatives at the Crossing Rock Public School. Parliamentary secretaries, Kirk Cornish and John Pinder, are also pictured. is already in progress. “We are accelerating to complete some of the school repairs already in train; some of the road work is already in train,” he added. “One of the contractors who had a delay, Bill Simmons Construction, will be resuming his road work within a matter of weeks. The road works we are viewing now we will be prioritising, and you will see contractors being mobilised very quickly not just on the mainland but the cays
which we would have visited yesterday - Elbow Cay, Hope Town, Green Turtle Cay and Guana Cay. Works have been identified in all of those cays.” Mr Sears said the Davis Cabinet has allocated funds to install infrastructure for a new subdivision in Spring City. “The government is moving aggressively because these structures were not designed for long term habitation; they were intended to be short-term,” he added of the Dorian
THE BAHAMAS CYCLES COMPANY Will hold its Annual General Meeting on Thursday, 16th December at 5pm at the Magnoia Building on the corner of Bay Street and Elizabeth Avenue.
‘domes’. “The Government is looking forward to bringing relief as quickly as possible.” John Pinder, parliamentary secretary and MP for south/ central Abaco, said: “A lot of my people who still live in temporary domes have sewerage problems, electrical problems, mold problems, which were not designated to be anything more than a very temporary situation which has turned into a long-term situation. “We have 40-50 RV trailers with our government workers outside the government complexes. These are the challenges at hand that Abaconians face on a daily basis and why it’s hard to progress in a more expedited manner.” Mr. Pinder also acknowledged the contribution of non-governmental organisations (NGOs) and non-profits to the Dorian recovery efforts. “Some of them started but we really need help to push forward infrastructure, water, electricity. These are things that are essential, and things that we need to move Abaco beyond the recovery stage. We are resilient but even the most resilient need a little help sometimes,” he added. Kirk Cornish, parliamentary secretary in the Prime Minister’s Office, and MP for North Abaco, said of the NGOs. “Words cannot say enough thanks because they came to our rescue in our most needed hour,” he added.
POSITION AVAILABLE:
COMPLIANCE OFFICER
A dynamic Bahamian securities firm licensed by the Securities Commission of The Bahamas (SCB) is looking for a Compliance Officer whose general responsibility will be to provide an in-house compliance service that effectively supports the business areas ensuring compliance with relevant laws and regulations and internal procedures. The applicant must possess an ICA and/or ACAMS or other similar awarding body qualification. Duties: o Prepare internal reports and assessments on compliance o Submission of regulatory reporting and filings and liaison with SCB o Perform transaction and AML/KYC monitoring of accounts o Support the customer onboarding o Be able to pass the respective Compliance Officer and MLRO licensing requirements of The Bahamas o Facilitate ongoing customer account reviews, considering the risk of each account o Write and update policy, procedure and guides for staff, including management o Monitor relevant Bahamas legislation and make recommendations for changes required o Serve as the Money Laundering Reporting Officer o Design and deliver compliance training o Any other duties that may be required Skills Required: o Sound knowledge of and understanding of how to apply international AML/CFT/CPF standards, frameworks and guidance issued by International Standard Setting Bodies, such as the FATF and the OECD, in the Bahamian context o In-depth knowledge of and understanding of money laundering and terrorist financing risks of financial institutions and how the AML/CFT/ CPF framework of The Bahamas applies to the business of a financial institution o Strong analytical, research and policy analysis skills; as well as, the ability to utilize AML compliance software o Series 7 or equivalent would be an asset o Good verbal and written communication skills o A positive attitude and proactive Candidates should submit their resumes via email to:
hrbusiness530@gmail.com no later than December 17th, 2021.
THE TRIBUNE
Monday, December 13, 2021, PAGE 5
What drives the price of bitcoin? By Ricardo Evangelista
T
raders of bitcoin are used to sharp price action, such as the one experienced during the first weekend of December, when the digital currency lost around 20 percent of its value. Such drops in value would normally see investors pulling their hair out, but many holders of cryptos barely care, believing that regardless of everything else the asset will eventually recover and continue to reach for virtually limitless heights. Such investors are driven by an almost messianic faith in bitcoin’s significance and potential, seeing in it as an encapsulation of several virtues, which include holding the key to a fairer and more transparent future and, unlike much-maligned fiat money, being immune to the influence of obscure powerful forces. Considering its popular appeal and legions of fans, many will be surprised to learn that 95 percent of all available coins are held by only 2 percent of the existing wallets and, despite the spectacular price action of the last 12 months, fewer than 20 percent of existing bitcoins were traded during that period. Another peculiarity of this market is the large number of exchanges where trading occurs, creating a fragmented market that is conducive to amplifying volatility. This means a relatively small movement in one such venue can trigger a significant price oscillation across the entire system. Finally, the large number of derivatives contracts,
allowing the use of leverage, and which are based on the prices of the underlying asset, in this case bitcoin, account for transactions that are five times’ larger in volume than those placed on the coin itself. However, despite the idiosyncrasies of this marketplace, in essence the value fluctuations of cryptos tend, to a large extent, to be determined by dynamics similar to those that move more established markets. The events of December 3 provide a good illustration: The price of bitcoin dropped by around 20 percent of its value, a movement that mirrored (on a greater scale, due to the reasons highlighted in the previous paragraph) a generalised switch to risk aversion in the financial markets. The Nasdaq index lost 2 percent on that same day following the release of US employment data. As the unemployment rate dropped to 4 percent, the lowest level since the beginning of the pandemic, expectations that the American Federal Reserve will hike interest rates earlier than previously expected took over the sentiment of investors. The result was a decline in the demand for risky assets, which affected technology stocks but had a particularly strong impact on crypto currencies. This dynamic was
BITCOIN intensified by the emergence of Omicron, a new variant of the coronavirus, whiuch saw investors seeking the protection of safe haven assets, fearing new lockdowns and the halting of the economic recovery coinciding with the withdrawal of monetary stimulus. Volatility both attracts and repels traders, depending on their profile and risk appetite. Still, as industry heavyweights become increasingly involved in the cryptos’ market, volatility will tend to decrease. Also, authorities around the globe started looking at this asset class with more attention, meaning that in the medium to long-term enhanced regulation will also contribute to greater price stability. But, in the meantime, with the withdrawal of central banks’ stimulus looming ever closer on the horizon (remember 2013 and the taper tantrum?) volatility is likely to remain high and crypto traders may be in for an abundance of trading opportunities.
Doctors Hospital
Notice
TO SHAREHOLDERS OF DOCTORS HOSPITAL HEALTH SYSTEM REGARDING DIVIDEND DECLARATION
Whereas there are sufficient funds to provide an extraordinary cash dividend to the shareholders of Doctors Hospital Health System, and Whe Whereas the Directors have determined that after the payment of such a dividend, the Company will be able to meet all of its continuing obligations and provide adequate funds for reinvestment in the business, he Notice is hereby given that the Board of Directors has declared an extraordinary dividend of $0.05 per share to be paid to shareholders of record on December 21st, 2021. The payment date shall be December 22nd, 2021.
PAGE 6, Monday, December 13, 2021
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‘EXTRAORDINARILY HIGH’: TRANSPORT COSTS NOW 20% OF GOODS PRICES FROM PAGE ONE that I would be happy to fill, but there are things one can control and things one can’t, so I will still be focused on selling the products I have. “We’re going to do as well as we’ve done in seasons past at the very least. No question about it. The demand is there. Number two, with the requirements for vaccination and testing to travel to Florida, that means more people will be shopping locally. I think a greater percentage of local monies will pass through local hands.” Mr Wilson said such trends were seen during the recent Black Friday/ Thanksgiving holiday shopping window, and he added: “I’m sure that augurs well
for all merchants in the mall [at Marathon]. I think it will be substantial provided one has inventory, and to the extent there are holes in the inventory I think probably every merchant finds themselves in that position.” With consumers set to make purchasing choices “based on availability”, the QBC chief said inflation stemming from the global supply chain’s inability to meet post-COVID demand would inevitability be passed on to Bahamian consumers via a variety of cost hikes given that this nation produces so little of what it consumes.” Listing gaming devices, the Play Station gaming system and printers as just some of the electronic products that are challenging to acquire, Mr Wilson added: “We are still aggressively pursuing our vendors to secure those products. “The cost of goods is going up for a variety of reasons. We’re finding that some of the transportation costs from the point of origin to Nassau may cost as much as 20 percent of the cost of goods. That’s extraordinarily high. A good yardstick is that a container out of China to North America and The Bahamas was about $6,000 to $7,000. Now it’s more like $23,000.” With deliveries that used to take five weeks now taking double that time, such as ten weeks, Mr Wilson said supply chain difficulties had been worsened by the “crazy trucking
rates” now being charged to move goods from California and elsewhere to the Florida ports for shipping to The Bahamas. Asked what he would tell Bahamian shoppers in the Christmas run-up, he added: “I would advise them to shop early because the prices will not be going down. We won’t see a downward trend in prices until at the very earliest mid to late 2022. It might go longer depending on how everything pans out. It’s not going to get any better between now and the end of the year. “For me, I’m expecting a strong Christmas. We’re expecting a good season. We’ve put in the hard work straight through the pandemic, and we have every expectation that our efforts will bear fruit. At the very least we expect it to be as good as 2019. Monies will be tighter, and salaries lower, because of all the additional costs that will be passed on, but I expect it to be as good as 2019.” Asked how he planned to counter the online shopping competition, Mr Wilson said: “The online merchants are pretty much here to stay. There’s nothing one can do about it except sharpen your pencil and purchase smarter.” He asserted that “small electronic items”, sourced from China, were cheaper in The Bahamas than prices on Amazon and in the US.
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PUSHED TO ‘BRINK OF COLLAPSE’ THROUGH 40% COST HIKES FROM PAGE ONE
or the client, there’s adjustments that can be made to the inflation rate of the day, but not with fixed or bank contracts. “This has been a long two-year period with COVID-19. Contractors are hurting and it’s really impacting their livelihoods and many are on the brink of collapse. That’s a reality that’s going to be painful for us, and many Bahamians have got caught up in construction that has taken a 40 percent increase in costs and there is no way to recover it.” Mr Sands added that profit margins for many have “already gone”, and many contractors are now “in the loss column and have the burden of completing these contracts” at their own expense rather than leave the job unfinished. “That’s the state where a lot of them are,” the ex-BCA chief said of his colleagues, while calling for talks between the construction industry and the banking sector, as well as the Government, to help resolve the issue. “Hopefully, it’s time to make adjustments moving into 2022,” Mr Sands said. “I’ve been in this situation myself. That’s the reality. We took a hit during COVID, and there was no room to recover because the contract is fixed. There’s no way to recover that cost. There’s no adjustment for inflation in a fixed-price contract. “That’s been my experience, too. We have to look at how we create a solution where contracts for construction reflect that, sometimes, you have
volatile circumstances where costs increase, and you have to adjust those contracts so the costs don’t flow to the contractor and he doesn’t take the loss. These are discussions that need to happen.” Mr Sands’ comments likely refer to contractors working in the domestic economy as opposed to those hired on foreign direct investment (FDI) related projects. Meanwhile Stephen Wrinkle, Mr Sands’ predecessor as BCA president, told Tribune Business he was unsure if the upcoming two percentage point cut in the VAT rate to 10 percent come January 1 will “make that great of a difference” to construction costs. Acknowledging that it will lessen the tax burden on construction material costs, he said: “I think every contractor in business today must have a clause regarding cost overruns. You can only guarantee what you quote at the time of the contract. There’s no way anyone is in a position to absorb costs not already quoted.” Mr Wrinkle again implored the Government to give effect to the regulations, and Construction Contractors Board, that will oversee legislation that introduces licensing, registration and self-regulation of the construction industry for the first time. Voicing optimism that the Davis administration will gIve effect to an Act passed by the last PLP government, Mr Wrinkle said this was critical to “standardise the industry and protect contractor and client”, since it would “go a long way to
eliminating the inconsistencies and inadequacies” that exist between the two parties and address the fixed-contract situation. With construction material prices having gone up by between 40-50 percent, and in some cases by 100 percent, he added that some products required as long as a six-month lead time before they can be delivered. Mr Wrinkle recalled how he was told that one shipment, which had been ordered months before, suddenly experienced a 25 percent price increase that had to be paid just ten days before it was supposed to be delivered otherwise it would not arrive in The Bahamas. “That has to be shared by the individual parties,” he added of such a hike. “You cannot expect the contractor to absorb all of that. It’s not right. They cannot absorb those costs. They will be out of business. It’s not their fault. It’s nothing they’re doing. “It goes to the consumer ultimately. They have to pay the difference. Ultimately it has to be passed on to the consumer, and finding a way to do that is going to require some attention from the Government and the private sector, particularly the BCA. “There’s too much money in these contracts. A 30 percent rise in materials can add $100,000, and the average Bahamian does not know what to do. He’s in a bind. You’re going to have a situation where the contractor stops work, the client does not have a home and the bank has an unfinished home for its security.”
Monday, December 13, 2021, PAGE 7
PAGE 8, Monday, December 13, 2021
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CRUISE PORT THE ‘CANVAS FOR THE BAHAMIAN STORY’ FROM PAGE ONE waterfront,” he told Tribune Business. “One that is branded from unique, authentic Bahamian products, unique, authentic Bahamian cuisine, and unique, authentic Bahamian entertainment. “When those things come together they will tell a lot of positive stories.” This, Mr Maura argued, will not only entice more passengers to disembark their cruise ships while in Nassau but also encourage them to give positive reviews of the destination, and “the
new Nassau port, and the new Nassau waterfront”, to their friends and family to encourage them to visit. “That’s all going to cause people to come off their ships,” he said. “It’s not the port selling our product. I’m very confident we are creating the canvas upon which Bahamians are going to paint their story, but it does take Bahamian innovation, Bahamian creativity and Bahamian excellence to achieve the greatest success. “It’s a community effort, and the success of Nassau
Cruise Port will be based on the community’s effort to make this a very successful destination.” Mr Maura also voiced similar optimism that a revived Nassau Cruise Port will encourage all downtown Nassau businesses, and especially owners of abandoned and derelict properties east of East Street, to raise their game. “When you raise the bar of the commercial product, the expectation of the visitor is that everything they are going to experience, see and touch should be at that
level,” he asserted. “If they come across a commercial space whose owner was not prepared to be innovative, they are going to walk right by it. “Those who have invested in their properties, invested in their product selection and have invested in their branding have the potential to go out in front of those slow to reach.” Mr Maura spoke as shares in the Bahamas Investment Fund, which will hold a 49 percent stake in the Nassau Cruise Port, were formally released to the public via a $25m initial public offering (IPO). Shares are priced at $5 each, with 5m in total offered. The minimum investment is $1,000 in BIF as the offering adopts a ‘bottom up’ approach targeting smaller retail investors first before institutions such as pension funds and insurance companies come into play. CFAL representatives, acting as advisers to Nassau Cruise Port, said the latter’s 25-year concession to operate and manage Prince George, which starts when construction ends in 2022-2023, should provide attractive long-term returns with an “average yield” of 10 percent per annum. This could increase after the 10-15 year mark, as interest costs decline due to debt repayments. No investor dividends will likely be paid until
NASSAU CRUISE PORT 2025. The Bahamas Investment Fund’s (BIF) offering memorandum also discloses that there are two so-called “lock-up” periods during which persons will not be able to redeem and/or dispose of their shares in the cruise port equity owner. For one year, until December 31, 2022, investors who buy into the Bahamas Investment Fund’s IPO “will not be able to transfer, sell, pledge, grant any option to purchase or otherwise dispose of” their shares in the pooled investment vehicle. And, for a three-year period lasting until December 31, 2024, investors “will not be able to redeem any shares in the” Bahamas Investment Fund. The restrictions further affirm comments by Mr Maura that the IPO is “not for
someone looking to make a quick buck”. Anthony Ferguson, president of CFAL, said the three-year “redemption lock-up’s” end was designed to coincide with when the Bahamas Investment Fund expects to receive its first dividend from Nassau Cruise Port in 2025. This, in turn, would give the BIF the necessary liquidity to redeem shares from investors who want to exit their investment, while also coinciding with Nassau Cruise Port’s first full year of post-construction operations and projected first year of profitability. However, once in, no investor will be able to exit for a whole year. And those seeking to “redeem”, rather than sell their BIF shares to another investor, will be unable to get out for three years.
PAGE 10, Monday, December 13, 2021
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Monday, December 13, 2021, PAGE 11
‘MAKE THIS THE LAST VAT CHANGE FOR A LONG TIME’ FROM PAGE ONE VAT cut implementation. Robert Sands, the Bahamas Hotel and Tourism Association (BHTA) president, told this newspaper that several hotels had “raised concerns” about having to adjust to the 10 percent rate in time for “the busiest day of the year” - January 1. Mr Sands, though, said he was more focused on “realising increased value” from the VAT rate cut given that it will help to lower the cost of a Bahamian vacation. Given that VAT is applied to room rates, food and beverage and multiple amenities and services offered by hotels, he added that the two percentage point cut could be “quite a savings windfall” for longstaying families and groups. Mr Halkitis, meanwhile, confirmed both the January 1 implementation date and 90-day “transition” given to merchants to enable them to reprice inventory for the new 10 percent rate. “We’re going forward with January 1 for the reduction. We believe that, for the most part, companies will be ready; it’s just a change from the 12 to the 10 [percent],” he said. “Now in terms of companies who have to physically change prices on every item, like for example, retailers, who have to go and change prices, or jewellery stores who have tags on items, there is a transition period of 90 days where they are given up to 90 days to have that completed, which is handed administratively, and so which we think is sufficient.” Noting that the private sector was formally made aware that the VAT rate cut was coming in late October, he added: “So we think the fact that this was tabled..... well, it was foreshadowed on the 27th when the supplementary Budget was read, and then it was laid I think about a week-and-ahalf later, that that should have given enough time for those who just have to make a change, change the rate in their system, that’s enough time for them, and those who have to physically go and change tags there is a transition period of up to 90 days for them to be able to do that. “We think it should be smooth, but we are always in constant communication with businesses and hearing their issues, seeing how we can have a smooth transition, but we think everybody will be ready.” But Ms Morley, who operates three retail formats, Cole’s of Nassau, Morley for Men and Maison Decor, told Tribune Business: “I am actually still waiting for them [the Government] to get back tome on what the timeline is for repricing. Usually we have a grace period of 90 days; three months. “At the end of the day there really hasn’t been a lot of information provided by the ministry [of finance] to the retail community on this 90-day grace period. Nobody has been informed about that yet. It’s always a nightmare to do the repricing. People just need to stick with a VAT rate and stop using it as a political tool.” The repricing of in-store and warehouse inventory by Bahamian merchants is just one of the issues that has to be considered when adjusting for VAT implementation/changes. The latest alteration will be the third time in seven years that merchants will have to reprice, as they did it for 2015 with VAT’s introduction and when the rate was raised to 12 percent in mid-2018. VAT rate changes, and/ or new zero ratings and exemptions, are not as easy as flicking and switch. Similar pricing transitions were permitted on both those occasions, but issues such as goods and services “paid for in advance” but not delivered until after January 1,
The BHTA’s Mr Sands, meanwhile, said he was “optimistic” that hotels and tourism operators will be ready for the new VAT rate come January 1 as the adjustment largely involves just computer system and software changes. “It’s not a major issue for us,” he told this newspaper. “The timing, certainly for
ROBERT SANDS 2022, will be another issue in terms of which VAT rate - 12 percent or 10 percent - applies. Guidance notes on how such issues will be treated have yet to be released by the Ministry of Finance. Ms Morley, meanwhile, said: “Every time the rate changes it involves a lot of work on the back end from retailers. We’re a VAT collector for the Government. Whenever we have to have prices repriced, it creates a lot of work for everybody. It will be quite an undertaking as always.” She added that her retail formats were already working on changing their various point of sale (PoS) systems to cope with the 10 percent VAT rate to achieve “the easiest way to make the transition and reprice things as quickly and as smoothly as possible”. The amount of work, and degree of difficulty, involved in VAT-related repricing will vary between retailers, Ms Morley added. She explained that much depends on how successful a Christmas season merchants have, and how much of their existing inventory priced at 12 percent - they are able to sell-off before New Year’s Day when the cut takes effect. Retailers with faster inventory turns and a smaller numbers of SKUs will likely face an easier task, she explained, but those selling products that are “ticketed by manufacturers before they are shipped” and with long delivery lead times will face greater challenges. “It’s always a bit more onerous for those retailers,” Ms Morley said. “Some people have started to think about this, and others have not given it any thought because they are focused on making Christmas money and chasing down supply chain sources. They have not had time to focus on it [the VAT change].” Asked whether the timing could have been better for the retail community, Ms Morley agreed and said: “It’s always a big distraction every time this occurs, and it distracts the business community from being able to run their businesses and create more profitable businesses that drive VAT revenues and help to streamline the ease of doing business. “We hope this will be the last VAT change for a long time.” Super Value’s Mr Roberts, meanwhile, also revealed he was unaware of the 90-day repricing transition until informed about it by Tribune Business. Based on feedback from his operations manager, Mr Moss, the Super Value chief said 90 days was likely “cutting it short” for large chains such as his to “do it properly”. Mr Roberts added: “If we don’t think we can accomplish this in three months then we have to go back to the Ministry of Finance and request 120 days or whatever it takes.” With Super Value and its Quality Supermarket
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affiliate possessing “in the vicinity” of 30,000 SKUs, Mr Moss said: “We have a lot of inventory at different prices. It’s a massive undertaking to do the big stores in 90 days.” With 80 percent of items likely to remain on shelves, and in the warehouse, “for a long period of time”, he added: “It’s going to take a while to clear the shelves and warehouse” of products priced at the old 12 percent. “We could try and do it within the time, and will make every effort, but it’s a big target. It involves a lot of overtime costs to do it in the required time” Mr Moss said. Pointing out that price control compliance is another factor retailers have to cope with when adjusting for the new VAT rate, Mr Roberts said: “We want to do it properly and do it to the Government and customer’s satisfaction. We don’t want to miss any items where they come back later on and say we have committed a violation, and they fine us another $120,000. “It would have been nice if they had done this at the end of January rather than the end of September, because then it would not take our IT people’s holiday. But, of course, they didn’t think of all that.”
New Year, which is the busiest day of the year, some of my industry colleagues have raised a concern but I am of the opinion that the sooner it [VAT] can be reduced the better for the visitor in terms of realising increased value from his/ her vacation.” Mr Sands voiced hope that the VAT rate cut
“straight across” for the tourism industry will boost guest satisfaction and value for money perceptions, “and for those paying for an increased length of time, staying at properties and dining and so forth, this could be a windfall in terms of savings for them”.