Bahamas News

Offshore finance centers (OFCs) like The Bahamas are seeking to shed their image as places wealthy individuals use to evade taxes, and according to some, the change in image is succeeding.

It’s a trend marked by jurisdictions promoting themselves as “well-regulated” and “transparent,” whereas the image of the OFC used to be almost exclusively tied to impregnable bank secrecy laws and regimes.

Former governor of the Central Bank of The Bahamas James Smith told the Journal recently that the times are changing, and that The Bahamas financial services sector – once a model of bank secrecy – is now among the leaders in touting its new regulatory regime.

Mr. Smith, who served as a Senator and State Minister for Finance in the Christie Administration, said the change is meeting with some success.

UK Wealth Bulletin, an online news and analysis service published by London-based eFinancialNews for the global wealth management industry, quoted Ernst & Young advisers, who reported an 11 percent growth in cross-border funds where tax had been declared, and a two percent reduction in undeclared capital.

Ernst & Young Head of Private Banking Ian Woodhouse said, “Everyone is tightening up. Traditional offshore centres are moving away from being tax havens towards being tax neutral, driven by government and client demands for better regulation.”

The Financial Action Task Force, an offshore regulator based in France, put together a list of 23 so-called non-cooperative countries and territories in 2000, including The Bahamas, the Cayman Islands, Lichtenstein and others.

Mr. Smith concurred with the Ernst and Young advisors’ conclusion that the effect of the so-called “blacklist” led to a new regime of self-regulation by the various offshore financial centers.

Jurisdictions were listed because they showed an unwillingness or inability to provide information relating to bank account and trading records commonly used in money laundering.

They were removed from the list when they supplied these details – their removal implied an assumption that the data they have supplied is correct. The Organisation for Economic Co-operation and Development (OECD) is reviewing levels of co-operation.

In October 2006, the FATF declared all offshore locations above board.

Phil Cutts, director of Royal Bank of Canada’s investment management unit, said the credit crunch was working in favour of the UK as there was a general flight to quality.

He said, “Clients are more nervous about their money and feel more comfortable speaking to a relationship manager in Jersey than one in The Bahamas.”

Gibraltar has the advantage of being in the European Union and therefore offers passporting through the union, but its tax regime is hanging in the balance pending European Court of Justice approval.

Malta and Cyprus can also trade on EU membership. They have low-tax regimes and are largely used as conduits for cross-border investments through tax treaty networks. Luxembourg and Ireland are primarily used for funds approved under European Union regulations.

Long-standing European jurisdictions such as Switzerland, Liechtenstein, Andorra and Monaco have competitive tax rates and large asset management bases.

Switzerland is often the first port of call for non-resident Asians seeking a European base, although erosion of secrecy is starting to change the picture.

Singapore, Hong Kong and Dubai are growing as offshore destinations, largely for structuring investment in and out of the Asian markets but increasingly for wealth management.

There has been a steady rise in business going onshore, partly as a result of tax amnesties. Woodhouse believes in a few years tax havens will cease to exist.

He said: “Tax havens grew in the post-World War Two era of political instability and the Cold War, where wealthy individuals needed somewhere safe to keep their money.

“They are less relevant in today’s environment and clients are gravitating to those centres that have made the transition.”

However, money is still moving into offshore funds. According to the most recent Merrill Lynch World Wealth Report, financial wealth among high net worth individuals is expected to reach $51.6 trillion (€32.8 trillion) by 2011, growing at an annual rate of 6.8%.

Source: Bahama Journal

Bahamas Telecommunications Company officials are considering providing cable services by 2010 as a part of a $55 million expansion to its telecommunications and Internet services.

Several weeks ago, officials announced an upgrade of the company’s system to the New Generation Network System (NGN) intended to improve the current digital infrastructure.

A multi-million dollar upgrade of BTC’s GSM network is also planned.

According to BTC’s Vice President of Marketing Marlon Johnson, the new NGN system will give BTC the capacity to provide cable services.

“The $55 million is to replace our core infrastructure and we are moving it to digital and we are moving it to our IT core,” he said.

“What that will do is then put our telecommunications services online with the most modern infrastructure. It will enhance telephone services and data services for businesses and residences, more flexibility and eventually be able to things like provide cable television.”

Mr. Johnson explained that the global trend appears to be the addition of cable television services to telecommunications companies.

“You can see a lot of companies now that are getting into cable television and it will be a standard television package and we will have to position it so that it will be competitive, but all those things are things that we are looking at,” Mr. Johnson said. “It will be no different from the cable services that people are accustomed to now.”

Mr. Johnson stressed that the idea is not set in stone, but it is something that BTC officials are discussing.

He added that there are a number of things that officials would have to do in order to make cable television provided by BTC a reality.

“First, we have to develop a business case for it that needs to get board approval obviously. Once the company decides that it wants to go in that direction we still have to get a business license to make it reality, so it’s still some ways down the road,” he said.

Mr. Johnson said in the meantime, officials are in discussions about the project.

“We are getting ready to do a full business study on the prospect of that. Based on what we have discovered in the business study then we will make a corporate decision on what direction to take,” he said. “If it is something to look at, then we will make a decision on that point.”

If BTC decides to provide cable services, it would end Cable Bahamas’ 15-year monopoly.

The company has been providing cable television services in The Bahamas since March 1995, and Internet services since March of 2000.

Yesterday, details were disclosed of a deal that BTC had struck with Nortel Communications to expand the company’s GSM cellular network. The expansion is expected to be completed by the end of 2008.

The upgrade will involve the installation of Nortel’s EDGE platform to enhance the system.

“This network expansion will keep BTC at the leading edge of telecommunications in The Bahamas with a fast and reliable nationwide wireless network,” said Ray Bulengo, vice president, Carrier Sales, Caribbean Region and Bermuda for Nortel.

“Nortel has a longstanding relationship with BTC which is based on out ability to deliver customer satisfaction again and again through the quality, reliability and scalability of our wireless services and solutions.”

Source: Bahamas Journal

Local artists say Chan Pratt will be remembered for his unique style in painting.

Holly Parotti, Collections Manager and Curatorial Assistant at the National Art Gallery of the Bahamas (NAGB) told the Journal on Friday that Mr. Pratt will be sadly missed in the art community.

“He had his own recognizable style in the way that he painted,” she said. “He was really good at it.”

Ms. Parotti said that his death will not be in vain.

“We in The Bahamas do not really support art appreciation,” she said. “His passing brings the need for proper documentation in the art industry. We have started doing that here at NAGB but we have a long way to go.

“I mean look at the BGCSE exams that secondary high school students take. I think as part of that exam they should be able to name five Bahamian artists like the Max Taylors, Eddie Minnises, Antonio Robertses and so forth.”

She said that her recollection of Pratt’s last exhibition was a few years back with Laurie Thompson.

“I find Pratt’s passing to be very shocking because he was young but he definitely contributed to art in the country,” Ms. Parotti said.

“It’s just sad to note that we don’t take art appreciation seriously in this country. Kids of tomorrow may never ever know who Chan Pratt is.”

Ms. Parotti said there needs to be proper documentation when it comes to remembering artists and their work.

Chan Pratt, 44, was found dead reportedly from a stroke or heart attack at Colony Club on St. Alban’s Drive off West Bay Street Wednesday night.

He owned a nursery called The Tree Depot & Artscaping also located on St. Alban’s Drive.

Pratt was described as “a truly unique creative force in the world of art.”

He was the son of Captain George C. Pratt and Mavis Tynes, and was born on September 29, 1963 in Nassau, Bahamas.

Police told the Journal on Friday that foul play is not suspected in Mr. Pratt’s death.

Source: Bahama Journal

Bahamas Telecommunications Company (BTC) officials have announced that the company will begin shutting down the now-obsolete TDMA cell phone network next month, as the company completes a multimillion-dollar migration to the GSM system.

Vice President of Marketing at BTC Marlon Johnson said on Tuesday that the company had plans to spend $44 million to do an “overlay” to complement the current frequency of the GSM system.

“What this will do is it will put GSM on the same frequency that the TDMA is on now,” he said. “That will improve the capacity on the network, which means that a lot more people will be able to get on to the network and it will also improve the coverage especially where their coverage issues have expanded over long distances.”

Mr. Johnson said once the overlay is in place, the TDMA system will begin shutting down.

” We will start with the Family Islands and end up with New Providence and Grand Bahama,” he said. “I think what customers will experience once the overlay is in place and turned on is that they will get similar if not better coverage with their GSM phones as they were getting with their TDMA phones.”

Officials have recently said that people who now own a TDMA number will be able to use their same phone number when the transformation to GSM is complete.

Mr. Johnson said the first shut down of TDMA will be on August 15 in Exuma, Andros and the Berry Islands.

On August 31, Ragged Island, Long Island, Rum Cay, San Salvador and Eleuthera will then switch over to GSM.

New Providence, Grand Bahama, Abaco, Acklins, Crooked Island, Bimini, and Inagua will make the switch on October 31.

Mr. Johnson addressed some of the common complaints about the GSM network, including an inability to send or receive text messages, or access voice mail.

“It may very well be that there may be an antenna close to where you live or out in your area,” he said.

“I think that everyone can see that the GSM system is not where we want it to be, but it’s constant upgrades that we are trying to do,” Mr. Johnson added. “But I don’t think we have had any major issues as of late.”

Mr. Johnson said that the company is also working on launching the Internet and picture sending on GSM smart phones.

He said the company hopes to have this in place by the end of the summer.

“We are constantly working to make our services better,” he said.

Source: Bahama Journal

Investor and philanthropist Sir John Templeton yesterday died in hospital in The Bahamas, reportedly from pneumonia. He was 95.

Templeton created the John Templeton Foundation in 1987 to encourage scientific research. The foundation has an estimated endowment of US$1.5 billion and awards some US$70 million in annual grants.

Templeton was a naturalized British citizen who lived in Nassau. He was knighted in 1987 for his philanthropic accomplishments.

Like Warren Buffett, Templeton is said to have developed a cult following, with fund investors flocking to annual meetings to hear his pronouncements.

Money Magazine in 1999 called him “arguably the greatest global stock picker of the century.”

Investing, however, reportedly took a back seat to Sir John’s religious and charitable endeavors, particularly after he sold his mutual fund empire for $913 million a month before his 80th birthday in 1992.

Sir John is survived by two sons, a stepdaughter, three grandchildren and three great-grandchildren.

Source: Bahama Journal