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FRIDAY, FEBRUARY 21, 2020
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QC’s account closures cost Scotiabank $10k By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
A BAHAMIAN QC has won $10,000 in damages from Scotiabank (Bahamas) after it abruptly closed his law firm’s bank accounts without giving any warning. Justice Ian Winder, in a recent Supreme Court verdict, ruled he was “not satisfied” that the alleged failure of Maurice Glinton QC and his law firm to fully meet the bank’s demands to verify their identities “warranted the immediate closure” of their Bahamian and US dollar accounts. He found that Scotiabank
enforce measures” that “prejudice” or deviate from the duties it has to customers it holds banking relationships with, but he only awarded $10,000 after finding the episode had caused Mr Glinton “little by way of actual damage”. While the Freeportbased QC had argued the accounts’ closure had caused him “embarrassment and inconvenience” and “blighted the
DUTCH DEMAND 9% CORPORATE TAXATION TO ESCAPE BLACKLIST By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net
THE Netherlands yesterday demanded that The Bahamas implement a corporate income tax at 9 percent or higher as the price to DEPUTY PRIME escape tax non-coopera- MINISTER PETER tion “blacklist”. TURNQUEST K Peter Turnquest, deputy prime minister, told Tribune Business in response to the demand from the Netherlands’ ministry of finance that The Bahamas “will not be dictated to be any foreign state” as to its taxation policy and structure. His comments came after a Dutch finance official, responding to this newspaper’s inquiries, said its tax blacklist criteria is “made up differently” from that of the 27-nation European Union (EU), of which it is a member. The Bahamas was this week removed from the bloc’s
* DPM: ‘We will not be dictated to’ * Says: Not global standard yet * AG seeking to meet Dutch today monitoring ‘grey list’ after being deemed to have fully implemented all the reforms required to address its demands. However, The Bahamas remains on the national blacklists of both France and the Netherlands, and is unlikely to be removed from the latter’s any time soon. The Dutch official said: “A country/ jurisdiction gets a place on the Dutch list when there either is no corporation tax or a corporation tax rate that is lower than 9 percent. “This is the case in The Bahamas, and therefore The Bahamas is - and stays on the Dutch list. We make up this list every year and the end of a year. A country/ jurisdiction can only get from the list if the corporation tax rate is a 9 percent or
CUSTOMS CRACKS DOWN ON ABACO AIRCRAFT ‘ABUSES’ By NEIL HARTNELL and YOURI KEMP Tribune Business Reporters
BAHAMAS Customs yesterday said it was cracking down on potential “abuses” by private aircraft in response to concerns that it has grounded Abaco’s only air freight provider post-Dorian. The agency, in a statement issued yesterday, did not say Abaco Freight or its agents were responsible for potential issues its officers had identified through “enhanced monitoring” of incoming flights to the island. Noting that private planes do not have to be registered with its Click2Clear electronic goods clearance system “as yet”, Customs said some appeared to be running “commercial cargo operations” even though the supplies were destined for Dorian recovery and restoration. “In the immediate aftermath of Hurricane Dorian, many private aircraft were transporting humanitarian relief supplies into the country under the various Exigency Orders,” the agency’s statement said. “They were not processed on Click2Clear, and had no need to be familiar with the system because private aircraft are not integrated into the online system as yet. “However, Customs is finding through its assessments and enhanced
TWO INSURANCE SITES EYED FOR HEALTH MINISTRY By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
* Judge: ‘Not warranted’ on KYC issues * Bank giant had to give ‘reasonable notice’ * Glinton’s ‘blighted reputation’ claim rejected
(Bahamas) was “contractually or otherwise legally obligated to give.... reasonable notice” to Mr Glinton that it was preparing to close the company’s bank accounts - a move that could have potentially crippled its business activities and cost it clients. The Supreme Court justice also determined that the Canadian-owned banking giant cannot “unilaterally impose and
monitoring that some private aircraft may be running commercial cargo operations, even though some of the supplies being transported are for Hurricane Dorian restoration activities. “As a result, Customs is exercising more scrutiny over these operations to prevent abuse of the system under the guise of humanitarian relief. Any abuse of the system does a disservice to Abaco and to the country,” Customs continued. “All commercial operators must follow the same rules when it comes to importing cargo. And if they are unfamiliar with Click2Clear, and if they are not licensed, they have to fulfill the necessary requirements to operate like everyone else.” Customs hit back after Tribune Business yesterday reported fears that its decision to ban incoming Abaco Freight flights until it complied with such decisions would further set back the island’s postDorian recovery. Residents said that blocking Abaco Freight’s regular flights was the latest example of bureaucratic red tape undermining restoration efforts, with Customs demanding that its local agent both pay a bond and go to Nassau to train on the new Click2Clear electronic goods clearance system before it can return. Kimber Mazzeo, Abaco SEE PAGE 6B
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professional reputation” his firm enjoyed, Justice Winder said banking confidentiality meant details of the affair were only known to the parties involved. His verdict, though, has implications for the wider Bahamian banking industry and its individual and corporate clients, as it means that institutions cannot arbitrarily shut down customer accounts without warning if identity and
MAURICE Glinton QC. other due diligence-related documents have not been provided. The verdict is also likely to strike a chord with many Bahamas-based firms and citizens who, for the past two decades, have had to contend with a Know Your Customer (KYC) due diligence regime that many still regard as overly SEE PAGE 4B
OECD TAX DEMANDS MAY ‘DEVASTATE THE ECONOMY’
* Ex-finance minister on corporate tax peril By NEIL HARTNELL Tribune Business Editor nhartnell@ tribunemedia.net
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nation”. He argued that The Bahamas’ compliance with past OECD and European Union (EU) initiatives THE Bahamas meant it was likely “may devastate the to “resist” the foreconomy” if it surmer’s latest thrust, renders too easily JAMES SMITH which is calling to demands from for all nations to high-tax European nations impose some form of “minifor a corporate income tax, mum level of” taxation on a former finance minister the activities of multinawarned yesterday. tional entities. James Smith, who held The OECD initiative, the post during the first whose headline objective Christie administration, is to prevent tax evasion told Tribune Business that by multinationals who shift the continued pressure profits earned in higher-tax from the Organisation for jurisdictions to those with Economic Co-Operation lower tax rates, is calling and Development (OECD) for the introduction of a and its members was threat- corporate income tax in all ening to “drive us right into but name. OECD literature the ground as a sovereign SEE PAGE 7B
THE Government is in “very advanced negotiations” to move the Ministry of Health into two former insurance buildings in the Palmdale area, a Cabinet minister confirmed yesterday. Dr Duane Sands, minister of health, told Tribune Business that the former CLICO (Bahamas) property on Mount Royal Avenue and exColina Insurance building on Rosetta Street were being eyed as the ministry’s new locations as it seeks to escape the “10 waterfalls” that occur whenever it rains at its existing Meeting Street premises. He added that the Government was looking at two separate locations as “the best fit given the size of the Ministry as there is no single commercial property that fits us”. This further indicates that the Minnis administration has no desire to move into the former Kelly’s Warehouse building on Soldier Road, for which the Government signed an irrevocable lease to house the Department of Public Health in 2014. It is currently embroiled in a multi-million dollar legal dispute over that contract with the property’s landlord, Kingman Ingraham. “The negotiations are very, very far advanced,” Dr Sands told this newspaper over the two former insurance properties. “The issue is neither building is ready for occupancy. These buildings have not been occupied for a while and they will have to be made whole or ready for us to into. Quite SEE PAGE 8B