INTERVIEW-Bahamas not planning to change offshore laws -PM

September 30, 2009

Residents of Ocean Isle Beach stand at the end of a road to watch the tide come in as Tropical Storm Hanna makes its way toward the coast of the Carolinas in Ocean Isle, North Carolina September 5, 2008. Tropical Storm Hanna was off the east coast of Florida as it moves away from the Bahamas toward the Carolina coast. Hanna was located about 110 miles east of Daytona Beach, Florida, and 375 miles south-southwest of Wilmington, North Carolina. REUTERS/Chris Keane (UNITED STATES)    By Tom Brown
    MIAMI, Sept 29 (Reuters) – Bahamas will cooperate with specific investigations into suspected tax evaders and fraudsters but will not change its bank secrecy laws to allow
“fishing” in its offshore finance sector by foreign investigators, the country’s prime minister said on Tuesday.
    In an interview with Reuters, Hubert Ingraham joined other leaders of Atlantic and Caribbean offshore finance centers in rebuffing criticism leveled by the United States and European governments against offshore jurisdictions seen as tax havens.
    He said the Bahamas, an Atlantic archipelago located east and south of Florida, was aiming to join “certainly no later than December” an Organization for Economic Cooperation and Development (OECD) “white list” of countries that had signed up to internationally agreed tax standards.
    Bahamas is currently on the OECD “gray list” — which also includes a string of small Caribbean territories — denoting an absence of full compliance with international tax standards.
    Ingraham, speaking earlier at a conference on the Americas in Miami, said Bahamas’ financial services sector had existed for 50 years and bank secrecy was a pillar of it.
    “We don’t propose to change our laws,” he told Reuters, while adding that his government would seek to comply with what he called the “evolved standards of the world” in the exchange
of tax information and the search for financial wrongdoers.
    “If there are specific things that are needed from a particular person because of a particular set of circumstances, then yes, the Bahamas will cooperate,” Ingraham said.
    “But we are not in the business of allowing ‘fishing’ to take place in the Bahamas,” he added, saying the country would not simply throw open its offshore financial sector.
    “Just coming and throwing a big net and saying ‘I want to find out this and the other’ is ruled out,” Ingraham said.
    The prime minister said Bahamas already had a Tax Information Exchange Agreement (TIEA) with the United States and was negotiating a number of similar accords with other governments to comply with the OECD standard.
    Commenting on the campaign against tax havens by the United States and other members of the Group of 20 economic powers, Ingraham suggested that Washington would do well to look in its
own territory for tax evaders and money-launderers.
    “The reality is that the tax havens or the offshore jurisdictions are not the problem, that’s not where the money is,” he said.
    “The Mexicans have asked the United States about accounts that are in the U.S., the Colombians do the same, and the Argentines and the Brazilians, because the money is right here in America,” the Bahamian prime minister added.
    But he said he understood that as national economies shrank in the global downturn, it was a “legitimate undertaking” for governments around the world to try to recover funds they
believed they were owed in unpaid taxes.
    But he added U.S. tax investigators should be looking in the United States, not in offshore jurisdictions like Bahamas.
    “It’s more difficult to open a bank account in the Bahamas than it is in America, it’s a fact of life,” Ingraham said.
    He said he would be sorry to see the departure from Bahamas of the local subsidiary of French bank BNP Paribas <BNPP.PA>,  which announced on Monday that it planned to withdraw from countries, including Bahamas, which did not meet OECD tax information standards and were viewed as tax havens.
    “They did not give us any warning,” he said, adding he understood that BNP Paribas was also pulling out of Panama and Curacao for the same reason.
    He did not believe the anti-tax haven campaign would lead to a mass pullout of banks and finance entities from Bahamas.
“We don’t expect this is going to start a trend,” he said.
 (Reporting by Tom Brown, writing by Pascal Fletcher; editing by Matthew Lewis)
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Tuesday, 29 September 2009 22:38:00RTRS [nN29167937] {C}ENDS

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