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WEDNESDAY, DECEMBER 4, 2019
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Contractor licensing wait ‘not an issue’ for Dorian rebuild By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A CABINET minister yesterday said the continuing wait to implement the construction industry’s self-regulatory licensing system will “not cause any issues” with post-Dorian rebuilding. Desmond Bannister, pictured, minister of works, told Tribune Business that the Ministry of Works’ rigorous pre-qualification system, and knowledge of which contractors are capable of doing the required work, will provide the necessary safeguards against Bahamas Building Code non-compliance and shoddy workmanship. Responding to concerns voiced by two former Bahamian Contractors Association (BCA) presidents that the failure to properly implement the Construction Contractors Act, via the appointment of a board to oversee the licensing of contractors according to their ability, could undermine the rebuilding of Abaco and Grand Bahama, Mr Bannister said: “It’s not caused any issues with the post-Dorian rebuild. “We have a pre-qualification system at the Ministry so there’s no challenge with the rebuild. We will be moving on that shortly. The Ministry of Works knows the contractors who are capable of doing different types of work, and we have a thorough pre-qualification system.” Mr Bannister declined to comment on why the Board, which will feature both government and industry representatives, had yet to be appointed or when the process will be completed. “There are some matters that I have to look into. There are some things I have to do before that can be finalised,” was all he would say. However, Tribune Business understands that the latest hold-up stems from the fact that the Act, which was passed by the former Christie administration in 2016, commits the Bahamian taxpayer - via Parliament - to financing the board’s activities. It is thought that no funding was set aside for that purpose in the 2019-2020 budget, and finding the necessary monies is now a challenge given the $677.5m deficit - and $508m in extra borrowing - that the government is now expected to incur as a result of Hurricane Dorian. It is thought this Board is the only selfregulatory one where the government is financially committed by law.
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Recovery Zone uncertainty fuels govt ‘confidence loss’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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HE government is today expected to clarify the “confusion and frustration” surrounding the post-Dorian Economic Recovery Zones, amid warnings that the uncertainty is fuelling “a loss of confidence”. Marlon Johnson, the Ministry of Finance’s acting financial secretary, last night told Tribune Business that the Minnis administration should introduce the enabling legislation for the zones - and the accompanying rules and regulations - in the House of Assembly today. He explained that a fifth government “exigency Order” had taken effect over the weekend to ensure that residents and businesses in storm-ravaged Grand Bahama and Abaco could still access VAT and import duty exemptions while the
• ‘Confusion’ to be tackled in House today • Chamber chief hits out over ‘frustration’ • Fifth Exigency Order as deadline missed
KEN HUTTON
MARLON JOHNSON
details for the zones - which were supposed to come into being on Sunday, December 1 - were still being worked out. “We did an extension to the exigency order at the weekend because we were still working out the final elements of the Economic Recovery Zone Act,” Mr Johnson said. “That will
be spoken to in Parliament tomorrow [today], and all the rules and regulations around that will be addressed then. “In Abaco and Grand Bahama right now, there is VAT-free and duty-free treatment of select items as outlined in the exigency order. My understanding is that should be addressed in Parliament.”
A FORMER attorney general yesterday warned The Bahamas must “stand up in a smart way” to ensure the survival of its financial services industry amid a threatened “blacklisting” by France. Alfred Sears, who is also an ex-Caribbean Financial Action Task Force (CFATF) chairman, told Tribune Business that “appeasement” through seeking to comply with the various regulatory initiatives imposed on this nation over the past two decades had never worked because “it’s a constantly moving target”.
K PETER TURNQUEST
Reiterating his previous calls for The Bahamas to fight these efforts by forming alliances with rival
international financial centres (IFCs), and using international law and the United Nations (UN) to
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
challenge their legitimacy, Mr Sears said it “seemed to have forgotten how to use international forums and diplomacy” to protect its second largest industry and fight climate change. He spoke out after French media reports revealed that the Emmanuel Macron-led government is preparing to add four nations, including The Bahamas, to its national “blacklist” of so-called “tax
SEE PAGE 5
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• DPM: Govt seeking clarity from Paris • Ex-AG: They want us out of financial services • European state ‘duplicitous’ as EU spared us
ALFRED SEARS
Customs ‘learning curve a bit steeper than we thought’ THE deputy prime minister yesterday admitted that Customs’ new system had required “a steeper learning curve than expected” as he pledged to work with the private sector to resolve all woes. Acknowledging “challenges” with the Click2Clear electronic single window (BESW) clearance system, K Peter Turnquest vowed to “work with” brokers and importers to adapt their systems to the new processes. Responding to criticisms of Click2Clear programme outside Cabinet, Mr Turnquest said: “The Click2Clear is a little bit of a challenge for us; I think more so from perception than a reality in a lot of circumstances. Because the fact of the matter is it is a new programme. There is a steep learning curve; a little steeper than we had anticipated, I think we would have to admit that.” Some brokers have suggested that Bahamians were not properly educated on how the clearance process has in effect been reversed, with others arguing that the former Electronic Customs Automated Services (eCAS) system for goods clearance worked better for them. They also questioned if Click2Clear will stop the revenue leakages at Customs and increase efficiency. Mr Turnquest, though, said: “We are doing our best to try and support all of the brokers, and support all of the importers to get up and going and work out what the bugs and bottlenecks may be as quickly as possible.”
Mr Johnson’s comments came as both the Abaco and Grand Bahama Chambers of Commerce voiced alarm about the lack of clarity coming from the government as to how the post-Dorian Economic Recovery Zones will be implemented and operate in practice. Echoing concerns expressed by his Freeport counterparts at the weekend, Ken Hutton, the Abaco Chamber of Commerce’s president, told Tribune Business that the continued uncertainty threatened to both delay and undermine efforts by homeowners, the private sector and wider community to rebuild following the most devastating hurricane to hit The
‘Appeasement’ not working as France threatens blacklisting By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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Solving Customs system woes ‘a matter of weeks’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Ministry of Finance’s top official yesterday voiced optimism that the problems with Customs’ new electronic system will be largely resolved “in a matter of weeks” and “fade quickly into the past”. Marlon Johnson, its acting financial secretary, admitted to Tribune Business that some importers had seen “a bit of a slowdown for sure” in the time taken to clear their shipments but pledged that Customs and the Electronic Single Window’s programmers, Singaporebased Crimsonlogic, were committed to working with the private sector to address all issues. He added that the private sector’s lack of “familiarity” with the switch to automation
• Top Finance official: Issues will ‘fade quickly’ • Admits some companies have seen ‘slowdown’ • But human error, ‘unfamiliarity’, also problems was also a significant factor behind the problems being experienced, and said importers who had invested in new equipment and digitising their own systems were “navigating” the system branded Click2Clear - much more smoothly. Arguing that the Electronic Single Window was “working as intended”, Mr Johnson said the difficulties stemmed from how Customs and private sector stakeholders were engaging with and using its processes. Calling on businesses to provide specifics on the issues they were having, the acting financial secretary
said that upon investigation it was discovered that some of the problems were “not as pronounced” as reported or resulted from human as opposed to system/process error. Mr Johnson, confirming that Customs and Ministry of Finance officials met with brokers, major importers and the Chamber of Commerce two weeks’ ago to address any grievances, said: “We are aware there are some issues with the system from a transactional standpoint that could be tightened up. “We are working with the users and programmers to address some of the reporting issues as well as other
elements we know of. Quite a few of the importers that invested in upgrading their equipment and automated their processes as we suggested have been able to navigate it very smoothly.” Suggesting that the transition from a manual, paper-based system was never going to be problem free, Mr Johnson continued: “The thing we’ve discovered is unfamiliarity with a new system. It’s brand new, totally different from the manual processes, people are getting used to a new way of doing business, and it’s slowing things down somewhat.” The increase in enhanced investigations and
post-clearance audits that the Electronic Single Window allows Customs to perform, he added, had also contributed to some of the delays. “For some customers there has been a bit of a slowdown for sure,” Mr Johnson said. “Part of it is to do with us doing system enhancements, and part of it is to do with unfamiliarity with the system,. “There are a number of issues and things we’re hoping to mitigate, but we feel confident that as these issues get resolved and people get comfortable, this will fade into the past fairly quickly. “We’re on top of it, understand the critical nature of these transactions and are ensuring people get through as quickly as possible,” he
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PAGE 2, Wednesday, December 4, 2019
THE TRIBUNE
BPL EXAMINING 45 OUT ISLAND SOLAR BIDS BAHAMAS Power & Light (BPL) yesterday said it is examining 45 bids to provide solar energy solutions on three Family Islands, with contracts set to be awarded to the winners in 2020. The state-owned utility said “more than three dozen” independent power producers (IPPs) accessed the bid documents ahead of the July offer deadline. They were asked to produce proposals to finance, build, own and operate a solar photovoltaic (solar PV) and energy storage plant or hybrid power plant on north & and central Andros, north Eleuthera, south Eleuthera and Inagua. Six bids were received
for Inagua, while five companies submitted proposals for north and central Andros. Ten offers each were submitted for the other two locations, north Eleuthera and south Eleuthera. BPL said that based on the addresses given by bidders, four of the six contenders for the Inagua contract are Bahamian. Three of the offers for north and central Andros, and five each for north Eleuthera and south Eleuthera, were also deemed to be local. The successful bidders will be required to enter a 25-year power purchase agreement (PPA), which will determine the price and terms/conditions at which all electricity produced is
sold to BPL. The latter will be the sole customer, with power sold on an ‘energy only’ (kilowatt per hour) basis. All projects must be operational within nine months of the winning bidders receiving the go-ahead from BPL. The utility said it has “made it clear that our preference is for use of local labour, goods and/or services sourced, in whole or in part, from one or more Bahamian businesses”. BPL has also mandated that ownership of these solar plants must be transferred to BPL at the end of the 25-year contract, or upon the deal’s termination, at fair market value. And, within a period of six years, at least 30 percent of
each project must be owned by individual Bahamians or a Bahamian-owned company. Bidders have three options. They can develop a plant that has daytime energy production with no storage; baseload 24-hour production with storage and a hybrid of the two that allows for higher daytime production with baseload production outside of daylight hours. With some of these options, BPL said it has mandated that capacity during both the daytime and 24-hour periods achieve at least 99 percent availability for dispatching schedules. This is because, where technically, operationally and financially practical, BPL
is seeking to phase out its diesel engine generation. The electricity provider said the generation outsourcing was designed to move The Bahamas’ closer to the National Energy Policy’s goal of generating 30 percent of this nation’s electricity needs from renewable sources by 2030. It is also aiming to transition the Family Islands away from reliance on BPL’s diesel power plants to a more diverse, sustainable generation mix provided by iindependent power producers (IPPs). This, too, fits in with BPL’s ambition to eventually exit the generation business itself. Dr Donovan Moxey, BPL’s chairman, told Tribune Business earlier this
year that the islands chosen were all selected because of their “additional generation needs” and projected increase in energy demand. He added that the results obtained from this first request for proposal (RFP) exercise will determine “the best way to scale the implementation of solar in the Out Islands”. “We have 17 to 18 islands that we want to put renewable energy in, so we want to make sure we move this process forward in a very structured manner. These islands need some additional generation in the short-term. Given the load growth curves for these islands, we looked at the fact they need more generation sooner rather than later,” Dr Moxey added.
DEVELOPMENT BANK NEW STRATEGIC PLAN THE Bahamas Development Bank (BDB) says it is developing a new Strategic Plan that combines objectives such as climate change mitigation with environmental sustainability and financial inclusion. Detailing what it describes as a major reform effort, the BDB said its aim is to boost Bahamian economic empowerment while also supporting the United Nations (UN) Sustainable Development Goals. Besides re-engineering its business processes to improve service quality, the strategic plan will also embrace gender equity. It added that it plans to invest in the socalled “green, blue and orange economies” by financing projects and entrepreneurs that focus on technology for greater industrialisation, renewable energy, sustainable agriculture and sustainable tourism. Executives from International Financial Consulting (IFC) have
FROM left: Marsha Moncur, BDB Grand Bahama office; Sara Harb IFC consultant; Margaret Sider, IFC consultant;, Michael Collins, IFC consultant; Senator Kwasi Thompson, minister of state for Grand Bahama; Sumayyah Cargill, business analyst, BDB; Harcourt Brown, acting permanent secretary, Ministry for Grand Bahama; and Clothilda Whymns, first assistant secretary. been hired to prepare the strategic plan’s environmental assessment. They visited The Bahamas in November to meet with a wide range of public and private sector stakeholders. The company has worked with national, regional and multilateral development banks in more than 65 countries. IFC’s consultants visited Grand Bahama and
Exuma. Senator Kwasi Thompson, minister of state for Grand Bahama, identified development opportunities - especially in the maritime industry - as well as the need to support small and medium-sized enterprises (SMEs) with capital in the wake of Hurricane Dorian. The BDB’s apiary programme was highlighted as an example of how combining technical training and
financing could provide opportunities for startups across The Bahamas. In Exuma, stakeholders highlighted the need for holistic development on the island to complement the $44m airport upgrade planned for 2020. Restaurants, housing, agriculture and fisheries development, taxis, and medical facilities were all cited as areas for potential development investment.
Minister opens wedding retreat DIONISIO D’Aguilar, minister of tourism and aviation, opened the MunaLuchi Coterie Retreat for wedding professionals at Baha Mar. The minister is pictured at the podium,
and with Chike Nwobu, president, and Jacqueline Nwobu, chief executive/editor-in-chief, of MunaLuchi Bride magazine. Photos: Kemuel Stubbs/ BIS
THE TRIBUNE
Wednesday, December 4, 2019, PAGE 3
BPL’s prices to be ‘cost neutral’ by 2020 Q1 end By YOURI KEMP Tribune Business Reporter BAHAMAS Power & Light’s (BPL) spokesperson yesterday sought to clarify the seeming contradiction with the minister of works by saying energy prices will be “cost neutral” for the 2020 first quarter. Quincy Parker had told media that “electricity bills should decrease in the first quarter of 2020” due to the new 132 megawatts (MW) of generation capacity from
Wartsila coming online this month. Besides enabling BPL to switch back to the cheaper Bunker C (heavy fuel oil) from more expensive diesel, these new engines also have a lower heat rate, meaning they require less fuel to generate the same amount of electricity as the existing engines. This, in theory, will lower BPL’s fuel costs and result in savings that can be passed on to consumers via their bills.
However, Mr Parker’s assertion appeared to contradict what Desmond Bannister, minister of works, told Parliament when revealing that the average household will see an increase of between $20 to $30 in their monthly bills for the first ten months in 2020 due to the addition of a debt servicing charge to cover BPL’s $650m bond issue. Moving to clarify this difference, Mr Parker said
“Mr Bannister is saying that the cost of the rate reduction bond fee is a range, and he gave a range. BPL’s assertion is that the cost of the rate reduction bond fee will be offset by reductions in fuel costs due to both the implementation of high efficiency engines that burn cheaper fuel more efficiently and then the switch to cheaper fuel. “What we are saying is that our hope, which we cannot guarantee, but our
hope based on the modelling that we have done is that the bills will be cost neutral over the course of the first quarter. So even though the bill will show a new line item, by the end of the first quarter - and certainly by the end of the year - that new line item will be offset by reductions in fuel costs.” Accepting that the $20 to $30 increase is possible based on the modelling BPL has done, but it cannot
give a specific number, Mr Parker said BPL is not contradicting Mr Bannister but that it expects lower fuel charges to offset the debt servicing charge by the end of 2020. BPL customers have heavily criticised the proposed increase in their electricity bills, with some saying this is a “vicious attitude” and that “they can’t increase the minimum wage, so how can they expect us to pay the higher bills”.
DAVIS DISMISSES $300 VAT LIGHT BILL BAR RAISE By YOURI KEMP Tribune Business Reporter THE government’s plan to increase the $300 VATfree threshold on monthly electricity bills is an admission that hiking the tax rate to 12.5 percent was a mistake, the opposition’s leader said yesterday. Philip Davis, responding to Tribune Business revelations that this threshold may be raised to offset the impact from BPL’s $650m bond issue, and the associated debt servicing charge that will be added to customer bills, argued that this amounted to “a confession” that the 60 percent VAT rate increase was negatively impacting consumers and the wider economy. “The government’s increasing fall-back on decreasing VAT to respond to criticisms of adding extra burdens on the Bahamian people is a confession that their ill-thought out increase in VAT by 60 percent is having a deleterious affect on our economy and its growth,” Mr Davis said in a voice note. Desmond Bannister, minister of works, last week said the average household’s monthly light bill could increase by between $20 to $30 for ten months during 2020 as a result of the bond debt servicing charge being added to their bills. This increase could push some customers who currently enjoy exemption from the VAT levy above the $300 threshold, hence the government’s intent to raise it. “With respect to this specific idea of increasing the billing number, and to apply a VAT decrease, again we don’t understand the dynamics behind this and to what number will it be increased?” Mr Davis
what items or what rate the VAT should be on any given item. That is a nightmare.” Drawing comparisons with the problems merchants are now experiencing with Customs’ newly-implemented Click2Clear Bahamas electronic single window (BESW), Mr Davis said: “You are seeing it now with this Click2Clear programme that they have for importing goods.
PHILIP DAVIS asked. “And, until such time as we understand what their arrangements are with relation to raising this $650m through this rate reduction bond, we will be shooting in the dark always as to understanding what is going on. “We cannot have any confidence in the negotiating skills or ability of this government. We have seen time and time again where they have negotiated some of the worst deals on behalf of the Bahamian people. This requires negotiating skills, this requires knowledge of the money market, this requires forward thinking and principles to ensure that we get the best deal for The Bahamas.” Mr Bannister last month accused the opposition of hypocrisy given that it was the former Christie administration that
passed the initial legislation to facilitate the National Utility Investment Bond in 2015, only to fail to implement it and leave it up to the current government. However, Mr Davis criticised the light bill exemption for undermining the concept of a low-rate, broad-based VAT. “It also demonstrates a misunderstanding of the VAT tax,” he argued. “The reason why VAT is an acceptable way of taxing is because of its simplicity. “It is an across-the-board tax and, when you start tinkering with it by exempting or decreasing various different items. It makes for uncertainty; you create bureaucratic nightmares and, of course, instead of costing less it costs more because of the manner and the time that will be dedicated to it to determine
Merchants are already screaming about the inefficiency of this programme.” And, dismissing the increase in the VAT-free threshold for light bills, he added: “This is purely a public relations gimmick to attempt to solve and to allay the fears of the Bahamian people, and to make it appear that something is going to happen for them. Trust me, this may look
good in the near term, but it will not alleviate the challenges and pain that is in store for the Bahamian people.”
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PAGE 4, Wednesday, December 4, 2019
THE TRIBUNE
Recovery Zone uncertainty fuels govt ‘confidence loss’ FROM PAGE ONE
Bahamas for decades. Revealing that he was still waiting for a reply to the letter sent to the Ministry of Finance last week outlining the business community’s concerns, Mr Hutton said some companies were still charging consumers VAT while others were not. Neither side, he added, knew whether they were right given the continuing absence of directives and rules from the government. “To-date we still don’t have the information on how it’s to be implemented,” the Abaco Chamber chief said of the zones. “All we have is an announcement. We still don’t have any documents on how it’s to be implemented. It’s in effect based on verbal confirmation but we have received nothing in writing. “Effectively what you’ve got are are certain businesses not charging VAT and some businesses, which are not supposed to be charging it, charging it because
there is no directive that they shouldn’t. I wrote last week to the ministry for clarification and have still not received anything yet. How are they going to notify businesses, and how will those businesses receive notification of VAT exemptions. “A prime example,” Mr Hutton continued, “is that we have certain fuel suppliers charging VAT and other fuel suppliers not charging VAT. LP gas for the forklift is exempt, but gas for the generators and trucks is not exempt. I don’t know if they’re exempt or not as there’s no communication telling us what to pay VAT on. “There is very little clarification. Great announcements but zero verification and documentation. The lack of clarification is causing people to charge VAT even though they may not have to charge it, and people paying it when they may not have to be paying it. It’s causing a lot of confusion and frustration for both buyer and seller.
“There is confusion where there shouldn’t be confusion and no need for there to be confusion. Unfortunately, it continues the loss of confidence in the government in many ways. There’s no clarification coming from the government.” Mr Hutton also queried whether essential recovery and rebuilding services, such as construction, air conditioning repairs and other contract work will be treated as VAT “exempt” or “zero rated”, warning that the tax would be “a significant burden on the recovery” if it remained in place. And, with the food stores supposed to be VAT-free, the Abaco Chamber chief queried whether the same tax treatment would be extended to restaurants - especially since bold sold pre-prepared food. Mr Hutton’s concerns echo those of his Grand Bahama counterpart, Greg LaRoda, who told Tribune Business at the weekend that “most businesses” on the island have
not been informed as to how the VAT and import tariff/ Excise tax concessions will be implemented. “Local businesses were told of the VAT concession via the media, and it was announced that it would be implemented on December 1 to give local businesses time to adjust their systems,” he said. “However, most businesses have not been engaged ... and there have not been any announcement or confirmations on exactly which tariff headings will be impacted, what specific goods will be VAT free and what the specific reporting responsibilities will be for businesses in Grand Bahama as of November 28, 2019. “Businesses have been calling the Department of Inland Revenue locally and could get no direction from them as they had not yet been advised of such.” Persons and businesses resident on Grand Bahama and Abaco, the two islands ravaged by Dorian, are supposed to enjoy the tax-free
importation of goods through until end-June 2020 to facilitate their recovery once they can prove they are located there. A private sector source, who was present at yesterday’s meeting between the Grand Bahama business community and officials from the Ministry of Finance, Customs and Department of Inland Revenue, said several key concerns were addressed. Confirming Mr Johnson’s comments, the contact said the fifth exigency Order was in effect until December 30 but was likely to be replaced before then by the Economic Recovery Zones once the enabling legislation and accompanying regulations were passed by Parliament. “They’re playing catch up,” the source said of the government, “but are becoming more cognisant of what they have to do. The way it was put to us could work.” They explained that all purchases from retail stores in the Dorian-hit zones will be VAT-free, with all products
covered by the exemption treated as “zero rated”. This means businesses will not have to pay VAT on their inputs or at the border, and will be able to claim refunds for the latter payments. As for import duties, these will be waived upon completion and pre-approval of a consolidated exigency form. Previous concerns centred around the fact that the tax breaks were not based on the tariff code, with the waivers based on broad, ill-defined categories or baskets of goods. However, government officials present at yesterday’s meeting said they would set up a phone and e-mail “hotline” so merchants could clarify the eligibility of certain products for the exemption. “The government mandate was to make it broad to cover consumables and items that are needed to rebuild,” Mr Johnson said last night. “There will be some guidelines and guidance as to what items are included and excluded.”
Solving Customs system woes ‘a matter of weeks’ FROM PAGE ONE
continued. “We’re talking a matter of weeks. “Once we get through this period and into the New Year, any system changes, process changes will have worked their way through. There aren’t any issues that the system is failing. It’s really certain processes that have to be streamlined and made faster. “The system itself is working as intended. The way we engage the system from a Customs standpoint and stakeholder standpoint is where the work has to be done, refining the system to make it more user friendly for them and get more functions for them.” Mr Johnson said another meeting was scheduled for next week between Customs and the private sector so that both sides could continue to work through the issues and provide feedback. He added that
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Customs officers will also go to importers and brokers to work through any problems alongside them in their offices. The electronic single window was billed as an initiative that would bring Customs and The Bahamas’ cross-border trade into the 21st century via the embrace of technology, but many brokers and importers have argued that it has proven to be something less than that to-date. Several have described the platform, which was rolled out two months’ ago on October 1 for all seaborne freight coming into New Providence, as a “real rough” adjustment and a “giant step back from the old system”. Among the major complaints are that, prior to the system’s implementation, the private sector was informed that import shipments would be immediately released once due taxes (VAT and duties/
excise tax) was paid on the declaration. This was intended to speed up the clearance of goods at the border, benefiting Bahamian merchants, wholesalers and other importers through reduced supply chain delays and a reduction in associated logistical costs. However, in practice, this is not happening as Customs is still insisting on checking consignments prior to their clearance even if taxes have been paid. Other issues include “significant delays” to the replenishment of companies’ performance bonds with Customs even after due taxes are paid, and problems processing shipments where VAT waivers are required. The latter is understood to have added an extra business day to processing/clearance times alone. The electronic single window is also a key component of the government’s
efforts to modernise and digitise critical public services. Besides improving border revenue collection, and helping to crack down on tax evasion, fraud and related crime by identifying high-risk shipments and importers, the system was also hailed as a means to improve the speed and efficiency of cross-border commerce. Apart from aiding the proposed World Trade Organisation (WTO) accession, its electronic platform was designed to play a key role for an economy that is almost totally reliant on imports for everything it consumes. However, the delays and confusion in the immediate aftermath of implementation threaten to bottleneck retail/wholesale supply chains at the worst possible time just before Christmas, when import volumes tend to peak amid merchants’ rushing to stock up.
THE TRIBUNE
Wednesday, December 4, 2019, PAGE 5
‘Appeasement’ not working as France threatens blacklisting FROM PAGE ONE havens” that Paris deems to be uncooperative on financial transparency and fighting tax-related crimes such as evasion. “I announce that we will blacklist... four new countries: Anguilla, the Virgin Islands, The Bahamas and Seychelles, which are not cooperative enough on financial transparency,” Gerald Darmanin, the minister of action and public accounts, was quoted as saying by the French media. He added that “France’s list will therefore be harder than that of the European Union”, which last year kept The Bahamas off its own 28-nation “blacklist” after finding it had complied with demands to eliminate so-called “ring fencing” preferential treatment for foreign investors and introduce a “substance” regime requiring all corporate entities to be doing real business in/from this jurisdiction. K Peter Turnquest, deputy prime minister, responded last night by saying that the Ministry of Finance, which acts as The Bahamas’ “competent authority” dealing with all tax matters, had received “no official notification of any new threatened blacklisting by any country” including France. He added, though, that if the reports were true then France’s planned “unilateral action” would “undermine” the worth and integrity of initiatives such as those undertaken by the EU and
Organisation for Economic Co-Operation and Development (OECD). “The Bahamas has requested official confirmation of the claims being circulated in the international media and, if true, the details of any perceived harm that would warrant the rumoured hostile retaliatory action of blacklisting without an attempt to resolve the issue through mutual dialogue and considered action,” Mr Turnquest said. France is a member of both the EU and OECD which, in recent years, each led efforts to crack down on tax evasion - particularly by multinational companies. The Bahamas and rival IFCs were impacted by both, yet this nation was subsequently rated compliant by both both bodies when it came to addressing their ‘concerns’. With France seemingly striking out on its own, Mr Turnquest said in a statement: “The Bahamas has been celebrated in the last few years for its level of engagement and cooperation, having passed several major pieces of legislation to adopt international standards and exchange of information protocols. “Any unilateral action by any country that conflicts with the framework established by the [OECD] Global Forum, of which they [France] are a member, undermines the very essence of the Global Forum’s structure and intent.” Describing The Bahamas as “a cooperative partner” on international tax matters,
and a full participant in the Global Forum, the body that deals with all tax transparency and information exchange matters, Mr Turnquest said this nation was invited to its Paris headquarters last week to celebrate its 10th anniversary. Financial services reaction to France’s threatened “blacklisting” move yesterday was a combination of amazement and resignation. Paul Moss, president of Dominion Management Services, accused France of being “duplicitous” in its action given that it was part of the same EU bloc that recently gave The Bahamas a clean bill of health on tax matters. “That’s amazing. That’s incredible,” he told Tribune Business. “The EU has spared The Bahamas. It clearly demonstrates that no matter what we do for these guys they do what they want to do. France is part of the EU, which spared The Bahamas from any list, but they now have us on their list. “They never give us a break. They [France] go rogue and decide to go outside their own bloc and super-impose their own standard. The EU says The Bahamas is fully compliant and done everything asked of it, and then France comes out with its own blacklist. I don’t know what to say. No matter what we’ve done, no matter what we’ve pledged, we’re still on a list. It’s horrible.” Mr Moss argued that The Bahamas needed to now
Contractor licensing wait ‘not an issue’ for Dorian rebuild FROM PAGE ONE However, both Leonard Sands and Stephen Wrinkle, the ex-BCA presidents, previously told Tribune Business that the absence of a licensing system exposed homeowners and businesses in the disaster-hit areas to potentially defective construction work during the rebuild, while also eroding the government’s ambition
of ensuring all properties adhere to The Bahamas building code. Non-compliance with the Code was cited as a major factor for why many structures collapsed so easily under Dorian’s category five winds, but both former BCA chiefs said the continued absence of the self-regulatory licensing regime threatens to cause a repeat during the next major storm as there is nothing to detect - or
prevent - the participation of incompetent contractors in the reconstruction. Messrs Sands and Wrinkle argued that the present situation leaves consumers and the government with little to no redress for shoddy workmanship, which the latter branded “a recipe for disaster” given that 7,339 homes across Abaco and Grand Bahama have been described as “severely damaged” in Dorian’s wake.
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open embassies in France and Germany, so that it has diplomatic representation on the ground in the two countries that appear to be driving the anti-IFC agenda, rather than restrict itself to the just-launched presence in Brussels with the EU. He added that the seemingly-imminent French action posed a further reputational risk for The Bahamas that was designed to deter that country’s citizens and companies from doing business with this nation and its financial institutions. Mr Sears, meanwhile, said France was merely following a national “blacklisting” trend that had been established by Italy. He argued that EU directives had emboldened its member states “to take punitive action against states like The Bahamas” even though they were asserting what he described as an “illegal jurisdiction”. Calling on The Bahamas to unite with other IFCs to present a united front against the likes of the EU, OECD and Financial Action Task Force (FATF), none of which he said have any legal standing to impose their demands on sovereign states, the former attorney general branded France’s action
as “a protectionist move” to benefit its own financial industry and retain more of its citizens’ tax dollars. He told Tribune Business: “The only solution I see to avoid an unequal and unlevel playing field is that we must find the courage to protect the national interest and sovereignty of The Bahamas, and challenge the legitimacy of these supra national or ad hoc bodies of which we are not a member. “Otherwise we ought to abandon any pretence of being a sovereign country in the international community. It’s a constantly moving target. Appeasement will not solve this. The only thing that will solve this in the eyes of the onshore centres that control the OECD and EU is for The Bahamas to abandon financial services and impose a tax regime equivalent to what they impose on their own citizens. “Unless you remove yourself as a magnet or competitor for their citizens, you stand and defend your rights as a sovereign actor and establish solidarity with other IFCs to lobby for a global convention so we have a level playing field, transparent process and a process subject to international monitoring.” Arguing that none of these
bodies had any authority to “blacklist” or levy economic sanctions on sovereign states such as The Bahamas, Mr Sears said the standards they sought to impose on this nation and other IFCs were not applied uniformly in their own states. “I find it amazing that The Bahamas, which had been so instrumental in fighting for a global regime, an international law for the sea, seems to have forgotten how to use multilateral forums and international connections,” he added. “We failed to do it with financial services, and are also failing to do it with climate change. “The point I’m making is that we must stand up to the OECD, the EU and insist as a sovereign nation that things such as tax harmonisation be subject to a global convention as it’s the only way we will have a voice. “I cannot understand a country where the leadership of the country is afraid. Being small does not mean you cannot develop and exercise influence. We have to use principles of international law and diplomacy,” Mr Sears said. “The Cayman Islands, a colony, has pushed back more admirably than we have.”
THE TRIBUNE
Wednesday, December 4, 2019, PAGE 9
Near-total insurance absence ‘critical issue’ By YOURI KEMP Tribune Business Reporter THE deputy prime minister said the near-total absence of hurricane insurance was a “critical issue” after it emerged that Dorian-ravaged communities in Grand Bahama were virtually uninsured. K Peter Turnquest said The Bahamas needs to develop ways to either “incentivise” persons to buy insurance, or structure programmes where risks can be pooled, after it was revealed that properties surveyed in Grand Bahama’s East and West End were 99 percent and 96 percent uninsured, respectively, when Dorian struck. “As in most Family Islands you would find that insurance uptake is very, very low,” Mr Turnquest said. “That is a critical issue that we have to address as a government moving forward. As you know with that exposure it
Customs ‘learning curve a bit steeper than we thought’
FROM PAGE ONE
Some brokers have also told Tribune Business that portions of the Click2Clear system are redundant, as they ask for information that has already been supplied. Others told Tribune Business that filling out the new system takes up too much time, adding some two-anda-half hours to what they would normally have done through the former eCAS process. Mr Turnquest added: “We acknowledge the challenges. We recognise that on our side of the fence there are some issues that we have had to work through as well as working with the importers and the brokers on their side to adapt their systems so that they can take advantage of the technology that is provided by the new system.”
MARKET REPORT www.bisxbahamas.com
(242) 323-2330
TUESDAY, 3 DECEMBER 2019
(242) 323-2320
ALL SHARE INDEX: CLOSE: 2,187.92 | CHG: -3.32 | %CHG: -0.15 | YTD: 78.47 | YTD%: 3.72 BISX LISTED & TRADED SECURITIES 52WK HI 4.45 22.65 7.00 6.10 2.60 2.00 5.47 11.75 6.17 4.64 11.25 2.81 3.96 10.21 7.60 16.90 9.40 3.63 14.20
52WK LOW 3.35 20.91 4.90 4.46 1.01 0.22 2.00 9.30 5.60 3.95 6.75 2.35 1.76 8.00 6.10 12.10 6.41 3.01 13.01
SECURITY AML Foods Limited APD Limited Bahamas Property Fund Bahamas Waste Bank of Bahamas Benchmark Cable Bahamas CIBC FirstCaribbean Bank Colina Holdings Commonwealth Bank Commonwealth Brewery Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank Finco Focol J. S. Johnson
SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ
1000.00 1000.00 1000.00 1000.00
1000.00 1000.00 1000.00 1000.00
Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Fidelity Bank Class A Focol Class B
CAB6 CAB8 CAB9 CAB10 CHLA FBBA FCLB
PREFERENCE SHARES
1.00 10.00 1.00
1.00 10.00 1.00
CORPORATE DEBT - (percentage pricing) 52WK HI 100.00
52WK LOW 100.00
115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
52WK HI 2.27 4.32 2.08 194.86 158.57 1.65 1.82 1.74 1.21 8.23 10.10 6.85 11.45 12.32 10.74 10.00 8.69 11.79
52WK LOW 1.67 3.04 1.68 164.74 116.70 1.58 1.69 1.66 1.09 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20
SECURITY Fidelity Bank Note 22 (Series B) +
SYMBOL FBB22
Bahamas Note 6.95 (2029) BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y
BAH29 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407
BAHAMAS GOVERNMENT STOCK - (percentage pricing)
MUTUAL FUNDS
MARKET TERMS
LAST CLOSE 3.37 17.43 6.00 6.10 2.46 1.80 4.36 11.06 6.16 4.15 8.06 3.32 3.96 10.05 7.60 16.90 9.33 3.20 14.00
CLOSE 3.37 17.43 6.00 6.10 2.46 1.80 4.20 11.06 6.16 4.15 8.06 3.29 3.96 10.04 7.60 16.90 9.33 3.20 13.90
CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 -0.16 0.00 0.00 0.00 0.00 -0.03 0.00 -0.01 0.00 0.00 0.00 0.00 -0.10
1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
1000.00 1000.00 1000.00 1000.00 1.00 10.00 1.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00
LAST SALE 100.00
CLOSE 100.00
CHANGE 0.00
107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund Leno Preferred Income Fund Leno Growth Fund Leno Diversified Fund Leno Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F
BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings
VOLUME
5,000
33,000 1,100
VOLUME
NAV 2.27 4.32 2.08 193.72 158.42 1.65 1.82 1.74 1.19 8.31 10.26 6.88 11.45 12.32 10.70 9.92 8.68 11.38
EPS$ 0.239 0.932 1.760 0.369 0.070 0.000 -0.438 0.722 0.449 0.184 0.140 0.102 0.467 0.646 0.728 0.816 0.939 0.203 0.631
DIV$ 0.170 1.260 0.000 0.260 0.000 0.020 0.000 0.720 0.220 0.120 0.000 0.434 0.060 0.328 0.240 0.540 0.200 0.120 0.610
P/E 14.1 18.7 N/M 16.5 N/M N/M -9.6 15.3 13.7 22.6 57.6 32.3 8.5 15.5 10.4 20.7 9.9 15.8 22.0
0.000 0.000 0.000 0.000 0.000 0.000 0.000
0.000 0.000 0.000 0.000 0.000 0.000 0.000
0.0 0.0 0.0 0.0 0.0 0.0 0.0
YIELD 5.04% 7.23% 0.00% 4.26% 0.00% 1.11% 0.00% 6.51% 3.57% 2.89% 0.00% 13.19% 1.52% 3.27% 3.16% 3.20% 2.14% 3.75% 4.39% 0.00% 0.00% 0.00% 0.00% 6.25% 7.00% 6.50%
INTEREST Prime + 1.75%
MATURITY 19-Oct-2022
6.95% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25%
20-Nov-2029 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022
YTD% 12 MTH% 3.06% 3.81% 1.91% 3.39% 2.23% 2.75% 4.99% 6.20% 7.18% -0.08% 2.88% 3.80% 4.56% 6.50% 3.35% 4.17% 5.77% 7.89% 11.19% 12.08% 18.66% 19.64% 4.33% 5.06% 10.43% 7.24% 5.42% 5.77% 3.11% 0.77% -0.71% 0.16% 7.40% 2.70% 10.20% 1.30%
NAV Date 31-Oct-2019 31-Oct-2019 25-Oct-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 30-Sep-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 31-Oct-2019 30-Mar-2019 30-Mar-2019 30-Mar-2019
YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful
TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | COLONIAL 242-502-7525 | LENO 242-396-3225 | BENCHMARK 242-326-7333
typically falls back to the government to provide the backstop for those persons who find themselves in an unfortunate situation where they lost everything. “Even when we talk outside of hurricane risk, and even with fire, when there is a disaster it falls on the community or the state to assist. So we need to figure out some ways to incentivise and to offer programmes so that people can have more of an opportunity to participate in that risk-sharing programme that we call insurance.” He was responding to the findings of a recent survey
commissioned by the Bahamas Shelter Cluster (BSC), an organisation which is attached to the Global Shelter Cluster (GSC), an inter-agency body that supports people affected by natural disasters. Some 70 percent of Freeport properties were also found to be uninsured. With Grand Bahama’s East and West End similar to the Family Islands, Mr Turnquest acknowledged that many residents will have built their homes themselves or inherited property from family. This, he added, meant there was not a strong incentive to purchase insurance, while many may have viewed the product as cost prohibitive. He likened purchasing property and casualty insurance to taking care of one’s health, adding that while it may be expensive it was only when a disaster happened that persons realise they need it.
A November 8, 2019, letter sent by Christina Taylor, general manager at Pinder’s Customs Brokerage, to the firm’s clients details the specific challenges all brokers and importers have had with the new Customs system. “One of the largest proposed benefits of clearance on ESW was that the process would be automated,” the letter, seen by Tribune Business, states. “It was stressed to us repeatedly in the training sessions with Customs
that once taxes were paid for a declaration, shipments would be (essentially) instantly released, so that goods could be picked up and delivered very shortly after payment. “It was stated that the process we used to call entry checking would occur as post-auditing – officers would do their checking/ auditing of declarations days/weeks after a declaration had been paid/released/ delivered. This is not what is happening so far.”
K PETER TURNQUEST
NOTICE NOTICE is hereby given that SHANE KRISTOFF BOWLES, of Cotton Wood Street, Pinewood Gardens, P.O.Box SS19830 Nassau, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 27th day of November 2019 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
NOTICE NOTICE is hereby given that JOHN TARRY PETIT-HOMME, of Rahming Street, Fox Hill Nassau, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 4th day of December 2019 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
NOTICE NOTICE is hereby given that ROSELINE MICHEL, of Hanna Hill, Eight Mile Rock, Freeport, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 27th day of November 2019 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
NOTICE NOTICE is hereby given that CALEB DADA, of Spanish Wells, Eleuthera Nassau, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 4th day of December 2019 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
THE TRIBUNE
Wednesday, December 4, 2019, PAGE 11
GOOGLE CO-FOUNDERS STEP DOWN AS EXECS OF PARENT ALPHABET
GOOGLE co-founders Sergey Brin, left, and Larry Page talk about the new Google Browser, “Chrome”, back in 2008. Page and Brin are stepping down from their roles within the parent company, Alphabet. Page, who had been serving as CEO of Alphabet, and Brin, who had been president of Alphabet, will remain on the board of the company. Photo: Paul Sakuma, File/AP SAN FRANCISCO Associated Press THE co-founders of Google are stepping down as executives of its parent company, Alphabet, ending a remarkable two decades during which Larry Page and Sergey Brin shaped a startup born in a Silicon Valley garage into one of the world’s largest, most powerful — and, increasingly, most feared — firms in the world. Sundar Pichai, who has been leading Google as CEO for more than four years, will take on additional duties as Alphabet’s CEO, the position held by Page. The company isn’t filling Brin’s position as president. Brin and Page met as Stanford University graduate students in 1995 and started the company soon after. What started as a way to catalog the growing internet has now become one of the most powerful companies in the world. Google dominates online search and digital advertising and makes the world’s most widely used operating system for smartphones, Android. It’s hard to make it through a whole day
without using one of Google’s services — ranging from online tools to email, cloud computing systems, phones and smart speaker hardware. Page and Brin, in announcing the news Tuesday, said the company has “evolved and matured” in the two decades since its founding. Both promised to stay active as board members and shareholders. “Today, in 2019, if the company was a person, it would be a young adult of 21 and it would be time to leave the roost,” they wrote in a blog post. Alphabet — an umbrella corporation that the two created in 2015 — still boasts Google as its central fixture and key moneymaker. But it’s also made up of what are known as “other bets”, or longshot projects. That includes drone company Wing and self-driving car firm Waymo. Page and Brin both have been noticeably absent from Google events in the past year. Both stopped making appearances at the weekly question-and-answer sessions with employees, and Page didn’t attend this summer’s Alphabet shareholders meeting even though he was still in the CEO role.
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PAGE 12, Wednesday, December 4, 2019
THE TRIBUNE