NASSAU, Bahamas – The Bahamas government says the country is fortunate that none of the regulatory and financial institutions had been targeted following the release of the Pandora Papers.
Attorney General and Minister of legal Affairs, Ryan PinderEarlier this month, the International Consortium of Investigative Journalists released the “Pandora Papers,” which expose the use by global political leaders, billionaires, and others of offshore entities in an apparent effort to hide assets and avoid taxes.
Addressing the Bahamas Association of Compliance Officers (BACO), Attorney General and Minister of Legal Affairs, Ryan Pinder, said the recently released Pandora Papers revealed that 14 service providers from the British Virgin Islands, Seychelles, Belize, Hong Kong, Panama, Switzerland, and the United Arab Emirates were penetrated, and confidential beneficial ownership information stolen from the information technology (IT) systems.
“Immediately upon the release of the Pandora Papers, BDO Consultants, provider responsible for hosting our Beneficial Ownership Secure Search system (BOSSs), was contacted to give us a report on the system’s security and to identify any breaches if any occurred.
“We were notified and given a comprehensive report that reflected no breaches occurred. The system’s audit revealed a solid infrastructure protecting the …information uploaded to BOSSs. We can least afford to have any financial service provider’s IT system being breached and information stolen.
“We were fortunate that none of your institutions were targeted,” Pinder said, adding “we wish to stress here that now is the time to perform those security IT audits and attend to any weakness identified.
“This is one of those decisive measures that need to be taken by all stakeholders to ensure that no breach appears in the gates. Breaches like that of the Pandora Papers can deal a devastating blow to financial centers such as ours. One of our defenses against such reputation risk is strong IT security and the next needed defense is that of strong effective compliance programs,” he added.
Pinder said that as the industry shifts into new and exciting offerings and services, it was important to initiate decisive measures to ensure those new areas are protected.
“As you can see, the financial services industry is currently in a material shift, being less dependent on traditional private banking and wealth management, and experiencing diversified growth in areas such as virtual assets, related virtual asset businesses and even into variations of traditional business like CFD broker dealers.”
Pinder said all these bring different challenges to BACO as the gatekeepers “of our industry, both the historical industry and the new evolving financial services industry of The Bahamas.
“It is on you as compliance officers, money laundering reporting officers, and BACO as the esteemed institution it is to not only ensure that you are understanding the new suite of legislative initiatives, but understand the risk framework that exists with these new business lines that are attracted to our country.”
In his address, Pinder told the conference that notwithstanding the difficulties faced over the last six years, the country has held its own and “we have been able to reflect the resilient nature of our people as we were able to work through the FATF (Financial Action Task Force) International Cooperation Review Group process and successfully exit the (European Union) Grey-listing on the 18 December 2020.
“We do believe that we have also been able to submit a good case for the country to be de-listed from the EU AML blacklist and is currently awaiting further communication from the office of the EU Director General for the Financial Stability regarding same.
“We are quite aware that all efforts ought to be concentrated on such delisting due to the negative impact it has had on financial services and the wider economy in transacting business with Europe.”
He told the conference that it is a critical time for divisive measures in the fight to secure the country’s financial centre from being in the ‘Head Lights’ of international agencies and economic blocks such as the Organization for Economic Co-operation and Development (OECD and the EU.
“Some of these measures have already bore fruit and some are ‘in play’ as noted before with the EU
DG Financial Stability. We will need the industry and professionals such as yourselves and all stakeholders of the financial sector to do your part in ensuring as ‘gatekeepers’, entities and individuals that seek to abuse our financial institutions, products and services are snared in their schemes and scams and any penetration of our systems…are able to be expeditiously identified and tightly secured.”
Pinder said that between sector shifts, geographical shifts and product development, be believes that the future is bright in financial services, adding “it may be different, even evolving but we will grow and we will evolve.
“The Government looks to cooperate with the private sector and the regulators, working jointly to chart a new path in financial services, taking advantage of evolving opportunities, being progressive and aggressive, ensuring that we not only survive, but the financial services industry of the Bahamas, and all its participants thrive.”
