At the biannual meeting of the Association of International Banks and Trust Companies, Minister of Financial Services and Investment Allyson Maynard-Gibson had said the amended FTRA and the proposed Trust Bill would be tabled before year’s end, answering concerns of members that if the amended FTRA were not passed, many financial institutions would find it difficult to remain in full compliance with verification requirements.
The amendments were submitted to the minister in early October by the Financial Services Consultative Forum, which also presented the proposed Trust Bill, the Segregated Accounts Companies Bill, and amendments to the Perpetuities Act. In the press conference announcing the proposals, attorney Brian Moree, chairman of the forum, noted that the amendments would move from the prescriptive approach required in the statute toward a more risk-based approach.
He said the current approach resulted in a lot of annoyance to customers in The Bahamas who were being asked to verify their identity and to provide copies of their passports and financial records to banks, even though they may have been conducting business at that institution for decades.
The risk-based approach of the amended FTRA would address mainly the first phase of a wider review of the act and the know-your-customer guidelines. The amended FTRA is expected to provide financial institutions more discretion in deciding how best to verify their customers’ accounts in accordance with the general principles set out in the amended statute. This risk-based approach, however, would not detract from the obligations of financial institutions to verify accounts, Mr. Moree said.
In 2002, The Bahamas signed an agreement to share information with respect to taxes in order to secure further approval by the United States of the country’s position as a qualified jurisdiction.
As a result of the agreement, beginning 2005, The Bahamas will be obligated to provide information for the tax year beginning in January, 2004, that may be relevant to a particular case where the United States government has exhausted all measures within its borders and the Ministry of Finance in The Bahamas is satisfied that sufficient evidence exists to support claims of criminal tax evasion of federal taxes.
A condition of the agreement is that any information obtained via the agreement cannot be shared with other countries.
This agreement also allows The Bahamas access to a convention tax deduction benefit for all U.S.-based companies and corporations holding business meetings and conferences in The Bahamas beginning in January, 2006.
Aruba recently signed a TIEA agreement with the United States.
By Martella Matthews, The Nassau Guardian
