The Bahamas Financial Services Board (BFSB) is looking to recognise an outstanding 2010 Graduate from within the School of Business, College of the Bahamas.

This initiative is a joint venture of BFSB, the College of the Bahamas and the Central Bank of the Bahamas, in collaboration with the Professional Industry Association Working Group (PIAWG) – a representative body for the various financial services industry-related associations here in The Bahamas. The criterion for initial selection is based on academic performance as demonstrated by GPA. Additional criteria include COB and community involvement, special interests, further education, and work/other experience. Last week, the Selection Committee completed interviews with the finalists, who will be announced shortly. The final phase of the judging process includes the interviews and a written submission from each candidate. The 2010 “Student of the Year” will be recognised at BFSB’s Annual Industry Excellence Awards Ceremony on October 21.

The Student Award programme is an integral component of BFSB’s ongoing Financial Centre Focus (FCF) programme that addresses issues such as (a) challenges impacting the sustained growth and development of the industry; (b) improvements to the level of service; and (c) attracting and maintaining qualified professionals.

This year, the Award is jointly sponsored by Societe Generale Private Banking (Bahamas) Ltd. and CFAL. SG Private Banking has been a consistent Co-Sponsor of the student award since 2004, while the Colina Group of Companies also supported the award as a Co-Sponsor in 2004 and 2005 under Colina Investment Advisors, and under CFAL as a cooperating partner in the ensuing years.

Photo caption: Pictured are members of the 2010 FSI Student Award Selection Committee – including representatives of the Award Sponsors. Front Row – Left to right: Anastacia Johnson, Association of International Banks & Trust Companies; Joan Pinder, Former College of the Bahamas School of Business Chair; Nadine Frazier, Insurance Institute of the Bahamas; and Nicole Pratt-Rolle, Society of Trusts and Estate Practitioners. Second Row – left to right: Cathy Williams, Colina; Renee Barrow, SG Private Banking, Carla Sweeting, Bahamas Real Estate Association; Cyprianna Bethel, Central Bank of the Bahamas; and Medgar Bonimy, Bahamas Institute of Chartered Accountants. Not pictured are Committee members D. Nguyen-Comito, Bahamas Financial Services Board; Karen Lockhart, College of the Bahamas; Marcia Seymour-Miles, College of the Bahamas; and Roger Brown, Bahamas Insurance Association.

Bahamas Financial Services Board

BFSB has opened nominations for the 2010 Financial Services Industry Excellence Awards. Awardees will be chosen for (1) Executive of the Year – CEO level; (2) Professional of the Year – Any level of Management or Supervision (3) Achiever of the Year – Junior and Support levels and (4) Financial Services Development and Promotion awards. The deadline for nominations is 1st October, 2010.

BFSB CEO & Executive Director Wendy C. Warren says, “BFSB is pleased to celebrate the 10th anniversary of the awards programme, which recognises one of the most important assets of our financial services industry: people power”. Capacity building is of critical significance to the ongoing success of the financial services sector and remains a cornerstone of BFSB’s strategic planning process and ongoing programme of work.

The Industry Excellence Awards programme was launched in 2001 in collaboration with the Professional Industry Association Working Group (PIAWG) as part of the Financial Centre Focus (FCF) outreach designed to profile the industry. (See attachment below) Specifically, this recognition programme profiles role models in the industry for their outstanding performance and contribution to the growth and development of the Bahamian financial services industry.
The Presentations Ceremony for the 2010 Financial Services Industry Excellence Awards has been scheduled for Thursday, 21st October. Also to be announced at the Awards Ceremony will be the winner of the annual Financial Services Student of the Year Award, another recognition programme developed under the umbrella of the FCF.

Nominations guidelines and forms can be obtained from BFSB’s offices in the Goodman’s Bay Corporate Centre.

Bahamas Financial Services Board

The Bahamas hosted the Third Meeting of the Peer Review Group of the Global Forum on Transparency and Exchange of Information for Tax Purposes on July 20 – 22 at the Wyndham Nassau Resort. It was the first time The Bahamas hosted a meeting of an OECD-related initiative. In addressing the delegates, Bahamas Minister of State for Finance the Hon. Zhivargo Laing reaffirmed that The Bahamas remains focused on meeting its obligations as a member of the international community. “The Bahamas is pleased to host this important meeting of the Peer Review Group, the first that will receive draft reports under the new Peer Review process launched in March of this year,” Minister Laing said in opening remarks.

The Global Forum’s Peer Review Group (PRG) was established in September 2009, as a technical working group consisting of representatives of 30 countries including The Bahamas. “The modern global economy has highlighted the need for unprecedented levels of cooperation amongst national governments of the world, both to sustain development and to combat abuses,” the Minister noted, adding, “The Bahamas has taken its responsibility in this regard very seriously, having embarked in the past decade on significant reforms at considerable investment to meet its obligations, including through participation in the Global Forum and other multilateral fora. The Bahamas remains focused on promoting the sustained development of our economy for the benefit of our citizens while fulfilling our obligations as a responsible member of the international community.”

The Peer Review Group’s Chairman, Mr. Francois D’ Aubert, extended appreciation to The Bahamas for recognizing the need to host such a meeting, as countries monitor the progress of the work of the PRG.

The PRG is operating under a mandate to develop and implement a system for the assessment, monitoring and review of actions taken by member countries toward the implementation of the established standards for transparency and information exchange with regard to tax matters. The initial stage of implementation of the peer reviews started in March 2010, with the assessment of the first group of 18 jurisdictions including Australia, Barbados, Bermuda, Botswana, Canada, Cayman Islands, Denmark, Germany, India, Ireland, Jamaica, Jersey, Mauritius, Monaco, Norway, Panama, Qatar, and Trinidad & Tobago. Some 100 jurisdictions, including
The Bahamas will be assessed over the next three years in a two-phase process that examines legal and regulatory framework for transparency and information exchange as well as practical implementation.

The Phase I review for The Bahamas began on July 1, with the Phase II review scheduled for July 2012.

It has been announced that the first 8 peer review reports have been approved by the Global Peer Review Group. “These Phase 1 reports assessed the legal and regulatory frameworks related to transparency and exchange of information for tax purposes in Bermuda, Botswana, the Cayman Islands, India, Jamaica, Monaco, Panama and Qatar.” All reports remain confidential until the Global Forum adopts them. The next Global Forum meeting will be held in Singapore on September 29-30, 2010.

Many other reviews have been launched already, in accordance with the Schedule of Reviews. The next group of reports will be considered at the next PRG meeting which will be held in Paris at the end of November 2010.

Bahamas Financial Services Board

The Royal Fidelity International Investment Fund Limited, Class N, TIGRS, Series 3 Sub Fund (“the TIGRS 3 Sub Fund”) has successfully completed the BISX Mutual Fund Listing Process and has been added to the roster of funds listed on the Bahamas International Securities Exchange (BISX). The TIGRS 3 Sub Fund is a closed end sub-fund of the Royal Fidelity International Investment Fund Limited.

The TIGRS 3 Sub Fund is the fourth offering of international investment products to Bahamians by Royal Fidelity Merchant Bank and Trust Limited. The TIGRS 3 shares offer 100% Principal Protection and 100% participation in the upward price performance of an equally weighted basket of commodities composed of Gold, Copper and Nickel. TIGRS 3 is a closed end fund that matures on March 31, 2015. The return at maturity is based on the average of the commodities’ prices measured annually beginning
on April 1, 2010 and ending at maturity.

A release from BISX notes that Royal Fidelity is able to offer these international investment products to Bahamians as a result of the Central Bank of The Bahamas’ Exchange Control Liberalization Program (the Liberalization Program) which allows BISX Licensed Broker-Dealers to access US$ currency for the specific purpose of creating Bahamian based investment products for local investors. The Liberalization Program which began with the creation of international funds by Royal Fidelity and CFAL in December 2007, currently counts 6 funds (including TIGRS 3) listed on the Exchange that offer international investment products to Bahamians.

In commenting on the new listing, BISX Chief Executive Officer Keith Davies said, “I want to congratulate Royal Fidelity for moving forward with the creation of their fourth international mutual fund. I believe that developments such as this listing are a sign of the innovation of our BISX Broker-Dealer Members. In these difficult financial times, it is encouraging that it is still possible to create products that investors value as being a part of their portfolio. I applaud Royal Fidelity one of our first BISX Members on their continued efforts at developing a pool of investments that Bahamian investors are able to access.”

President of Royal Fidelity Merchant Bank & Trust Mr. Michael Anderson added: “Royal Fidelity is pleased to have been able to offer the first opportunity for Bahamian investors to invest Bahamian dollars in commodities while also giving full protection of the principal amount invested. Through the TIGRS sub-funds, Royal Fidelity seeks to create unique investment opportunities to enable Bahamian investors to diversify their Bahamian dollar investment portfolios while limiting any downside by offering full principal protection.“

Royal Fidelity Capital Markets Limited served as the BISX Sponsor Member that brought the TIGRS 3 Sub Fund to the Exchange. Royal Fidelity Merchant Bank and Trust Limited is the Investment Manager as well as the Administrator.

Mr. Anderson also has indicated the possibility of Royal Fidelity bringing out another foreign-currency denominated, international mutual fund later this year.

Bahamas Financial Services Board

The Bahamas has enacted the International Tax Cooperation Act, 2010 (Act) which came into force on July 1, 2010. The Act provides the framework legislation that enables The Bahamas to give effect to any treaty or international agreement as specified in the Schedule that provides for exchange of information in tax matters. Effectively, the Act implements into domestic law the internationally agreed principle for the exchange of tax information universally endorsed by the United Nations, the G20 and the Organisation for Economic Cooperation and Development. In particular, it gives authority to the Government to bring the Tax Information Exchange Agreements (TIEAs) signed in 2009 and 2010 into effect.

The Act provides clarity on the definition of Competent Authority as defined in the respective governing Agreement. In the case of The Bahamas, this would be the Minister of Finance or his duly authorised representative. Likewise defined is the “Requesting” and “Requested” States, specifically linking them to the governing Agreement.

With regard to the procedures to be followed in respect to a request, the Act stipulates that a request must be in writing and must be signed by a senior official designated by the “Requesting” State. The Act provides safeguards against so-called fishing expeditions, with provisions relating to what a request must contain, deferring to the provisions of the respective governing Agreement. For example, it provides that a request shall contain “such” of the following particulars as “may be specified” within its governing Agreement:

1. The identity of the person under examination or investigation;
2. A statement of the information sought, including its nature, and the form in which the requesting state wishes to receive the information from the requested state;
3. The period of time in respect of which the information is requested;
4. Where a request seeks information relating to a timeframe outside the taxable period specified in the request, the request must clearly establish the connection between that taxable period and the timeframe for the information sought;
5. The tax purpose for which the information is sought;
6. The grounds for believing that the information requested is held in the “Requested” state or is in the possession or control of a person that is subject to the jurisdiction of the “Requested” state;
7. To the extent known, the name and address of any person believed to be in possession of the “Requested” information;
8. A Statement that the request is in conformity with the law and administrative practices of the “Requesting” State, that if the “Requested” information was within the jurisdiction of the “Requesting” State then the Competent Authority of the “Requesting” State would be able to obtain the information under the laws of the “Requesting” State or in the normal course of administrative practice and that the request is in conformity with its Governing Agreement;
9. A Statement that the “Requesting” State has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties;
10. An indication as to whether the information is required for determining, assessing and collecting taxes or for the investigation or prosecution of tax offences involving the contravention of a tax administration or other relevant law;
11. Where the request is in respect of the determining, assessing and collecting of tax, the law imposing the tax;
12. Where the request involves a contravention of a tax administration or other relevant law, the law contravened or believed to have been contravened;
13. Evidence that the information being sought is foreseeably relevant to the administration or enforcement of the tax laws in respect of determining, assessing and collecting taxes or for the prosecution of tax offences or involves the contravention of tax administration law (as the case may be).

The Act also sets out the empowerment of the Minister responsible to require production of information and the procedures for dealing with information received. Under provisions of the Act, the Minister may allow representatives of a Competent Authority of a “Requesting” Stage to interview individuals and examine records in The Bahamas, under strict conditions, including the provision of written consent to such by the persons to be interviewed or whose records are to be examined to the Competent Authority, and compliance with relevant entry laws of The Bahamas.

The Act defines offences relating to contravention of provisions and sets penalties for such, and under broader powers provided for the making of subsidiary legislation, the Minister can create further offences and prescribe penalties for such. There is due process for judicial review and challenge, where a person feels aggrieved by the performance of the Minister or any other person of any function under the Act.

In terms of Agreements to be signed going forward, the Act provides that the Minister shall by Order amend the Schedule to give effect to such agreements.

Also enacted has been an amendment to The Bahamas and the United States of America Tax Information Exchange Agreement, effectively (i) ensuring consistency with the level of penalties in the International Tax Cooperation Act 2010 that will give effect to the other TIEAs The Bahamas has entered into; and (ii) empowering the Minister to permit, at his discretion, the United States Competent Authority to conduct interviews in The Bahamas with persons that voluntarily consent to participate in such interviews, and on such conditions as the Minister may set.

Bahamas Financial Services Board

Bahamas-based Gadites Maritime and Navigational Institution (GMNI) has merged with Caribbean Maritime Institute to deliver a Master’s of Science Degree programme in Maritime Logistics and Supply Chain Management. This is a post graduate qualification which combines lectures, research, project work and assessment. Learning outcomes at this level include the enhancement of specific professional or vocational skills; this may be undertaken by direct coursework and/or research.

GMNI was established in The Bahamas in 1999 by Capt. G.K. Lightbourne, a former Royal Bahamas Defence Force Marine. Its Mission Statement: “Empowering Seafarers Through Specific Performance and Improving Quality of Life.”

The Bahamas has a rich maritime heritage, with a Bahamas Ship Registry fleet that has grown to be third in the world, with over 50 million gross tons of ships flying the Bahamas Flag in every corner of the globe. The Bahamas Maritime Authority recently launched a Yacht Registry, complementing The Bahamas’ interests in tourism, ship services and its extensive cruising waters.

The international shipping industry employs some 1.25 million seafarers, and the sector continues to present great potential for development, locally and international. The necessary training to build capacity is a key component of growing the industry.

Bahamas Financial Services Board

The United Nations Conference on Trade and Development’s World Investment Report 2010 (WIR 10) presents new and exclusive data on global investment trends in 2009, as well as region-by-region statistics.

UNCTAD notes that the global financial and economic recovery remains fragile, threatened by emerging risks, constraints in public investment and other factors. For the recovery to remain on track, private investment is crucial for stimulating growth and employment. Foreign direct investment (FDI) has a major role to play. WIR 2010 highlights a promising outlook: after a significant global FDI downturn in 2009, flows worldwide are expected to recover slightly this year, with a stronger recovery in 2011 and 2012. Overall, countries continue to liberalize and promote foreign investment, although there has also been an increase in new policy measures regulating foreign investment. Countries remain receptive towards FDI, seeing it as an important external source of development finance.

The WIR’s special topic this year deals with the investment prospects for low-carbon economic growth and contends, among other things, that transnational corporations can play a major role in helping the world’s poorer countries “jump-start” growth in this promising sector. Specifically, the report proposes a global partnership to synergize investment promotion and climate change mitigation and to galvanize low-carbon investment for sustainable growth and development. The five major components of the proposed partnership are: establishing clean-investment promotion strategies; enabling the dissemination of clean technology; securing international investment agreements’ contribution to climate change mitigation; harmonizing corporate greenhouse gas (GHG) emissions disclosure; and setting up an international low-carbon technical assistance center (L-TAC).

Established in 1964, UNCTAD promotes the development-friendly integration of developing countries into the world economy. UNCTAD has progressively evolved into an authoritative knowledge-based institution whose work aims to help shape current policy debates and thinking on development, with a particular focus on ensuring that domestic policies and international action are mutually supportive in bringing about sustainable development.

The World Investment Report has been published annually since 1991. Each year´s Report covers the latest trends in foreign direct investment around the World and analyses in depth one selected topic related to foreign direct investment and development.

Bahamas Financial Services Board

The Society of Trust and Estate Practitioners (STEP), the worldwide professional body for those advising families on trust and estate planning, has released a new report on potential abuse when governments exchange tax data.

A release from STEP points out that under an OECD initiative there are already well over 300 tax information exchange agreements (TIEAs) in place between countries and the number is growing rapidly. The report highlights the increasing risk that, as the TIEA network grows, countries with poor human rights records and weak data security will gain access to detailed personal financial data on individuals. “This could leave law abiding taxpayers and their families vulnerable to issues such as threats from criminal gangs who have gained access to tax data,” according to STEP.

David Harvey, STEP Chief Executive, said: “Most TIEAs so far have been agreed between major economies, such as the UK, and other well run countries. There is now strong political pressure to expand the list of countries accessing tax data via TIEAs, bringing in countries where it is harder to be confident that personal tax data will be secure. It is very worrying, therefore, that so far there are no clear plans to ensure minimum standards are in place to protect the public. It seems extraordinary, for example, that the current OECD review process for TIEAs only looks at a country’s performance in providing tax data. There is no check whatsoever to ensure countries receiving data on taxpayers’ financial affairs protect that data and respect personal confidentiality.”

STEP has proposed a set of minimum standards that countries must meet before getting access to tax data from other countries, including minimum standards of good governance, basic data protection measures and a right of redress for taxpayers if things go wrong.

Bahamas Financial Services Board