Thursday, October 17, 2013
The Minister of Financial Services in the Bahamas, Ryan Pinder, said recently that there is growing opportunity in the territory for entrepreneurs to specialize in compliance as proposed international mandates have created a growing need in this area.
"In the face of what seems to be overwhelming changes, we should explore opportunities as well. We in The Bahamas have excelled in developing human capital and professionals in compliance. As such, we have looked to develop opportunities for entrepreneurism in compliance," Minister Pinder said during the Higgs and Johnson Annual Client Seminar.
He commended the step taken by the Securities Commission of the Bahamas to define the framework for the outsourcing of professional compliance. He said that the next step is "for Bahamian compliance officers to own their segment of the financial services industry. Through the finalization of the Guidelines on Outsourcing Compliance Functions, through the development and application of the international initiatives, the expertise of our domestic human capital in the compliance function will be given the opportunity to be entrepreneurs."
Speaking in the context of the United States' Foreign Account Tax Compliance Act, Mr Pinder acknowledged the need for confidentiality. "In many of our new markets, such as Latin America, confidentiality is important for personal safety concerns and a lack of confidence in their respective governments. This is an important distinction when we advance notions of confidentiality."
"My ministry forcefully and articulately advanced the Bahamas' concerns with the requirement that all trusts managed by professional trustees – even those without US interests – be required to register and enter into an FFI (Foreign Financial Institutions) agreement with the IRS (Internal Revenue Service)," Minister Pinder said. "This had significant confidentiality concerns to our number one segment of the financial services industry."
He added that the US Treasury amended its law to grant trusts with professional trustees exemption from the registration and FFI agreement requirements where the due diligence and reporting – where there are US interests – are carried out by the professional trustee which is an FFI under FATCA.
The minister said that it is necessary for the Bahamas to lose its reputation as a place to hide wealth. He said the territory must "demonstrate that we are a jurisdiction with a highly skilled workforce, a long history of integrity, a well regulated industry where wealth is managed and in turn positioned for international business and investment globally."