The government of the Bahamas said yesterday it has “no intention” of making its beneficial ownership registries public, responding Britain’s move to introduce new legislation that will require its 14 overseas territories to move to a fully transparent system of company ownership by 2020.
The Bahamas, which has been an independent country since 1973 – and as such is not directly affected by the UK’s amendment – nonetheless responded strongly to the news from Westminster.
KP Turnquest, the jurisdiction’s deputy prime minister, told the local Bahamas Tribune newspaper: “It is our intent to have a private Registry. There is no intention to have a public registry, and that is our position at this point.”
The deputy prime minister’s rejection comes at the end of a turbulent week for the British overseas territories (BOTs), with many jurisdictions responding angrily to what they regard as “double standards” from Westminster, and a lack of acknowledgement for systems already in compliance with international transparency norms.
Yesterday Jude Scott, CEO of Cayman Finance, defended his jurisdiction’s “leadership” in championing transparency, saying “Cayman’s existing verified ownership regime […] remains superior to existing ownership regimes in the UK and around the world.”
The report in the Bahamas Tribune gives voice to Bruce Raine, international private banking systems (IPBS) principal, who sought to explain why some level of confidentiality is necessary, particularly where some countries suffer high levels of violent crime and political instability.
“People in Trinidad, people in Brazil, they’re kidnapped for their money. You don’t want information leaked that allows people to tie ‘two and two’ together, and shows ‘so and so’ is the owner of that business. If that gets out, that person is in a whole heap of trouble, yet they’ve not done anything wrong,” Raine told the paper.
‘Offshore finance demise’
Yet in the same edition, the editor of the Tribune lamented that “Recent events are somewhat discouraging which I can only conclude will bring about the termination of the Bahamas as an offshore financial centre and place even more emphasis on tourism as the main and only driver of the Bahamas’ economy.”
Hints at legal action
Both the Cayman Islands and Bermuda have hinted they could take legal action to block the public ownership demand, a move that could jeopardise the islands’ status and their strong ties to the UK. Closer to home, Jersey, Guernsey and the Isle of Man, which have similar status to the BOTs, are battling a new campaign to force them to also disclose their ownership registries. The Crown Dependencies managed to avoid inclusion in the controversial amendment to the anti-money laundering bill which was passed by the House of Commons on Tuesday, in what was hailed by campaigners for greater transparency as a major victory.
Tuesday’s development comes at a torrid time for many of the world’s offshore centres and is regarded by many of the BOTs as a threat to their status as legitimate centres for international finance.
The controversial legislation was passed in Britain as the Bahamas itself is waiting to learn if the EU is to remove it from its “blacklist” of jurisdictions whose tax and transparency standards it deems substandard. As the week draws to a close, the tempestuous debate shows little sign of subsiding.