Ministry of Financial Services The Commonwealth of The Bahamas
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Minister’s Message
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About the Bahamas
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Financial Services
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Trade & Industry
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The Bahamas Bureau of Standards
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Minister’s Message
For over 80 years, The Bahamas has been offering financial services to the international market, gaining a reputation for high quality service and professionalism. As a result, The Bahamas now stands as the top financial services destination in the region. Financial Services is the second largest industry within the country, directly contributing over 15% of the nation’s GDP (with over 27% of the Bahamian GDP being directly or indirectly associated with financial services). This positions the financial services industry as one of the cornerstones upon which The Bahamian economy is built. Countless relatively high-paying jobs are provided to Bahamians by the industry and countless more are created indirectly through investments in other related sectors such as tourism, real estate and construction. One of the main reasons for The Bahamas’ success within the financial services sector is its strong pool of local talent which allows the nation to comply with even the most demanding international standards while consistently innovating and adapting to the changing financial landscape. We have the requisite knowledge and skillsets to keep up with international standards while also introducing solutions of our own, such as the recent adoption of Brazil-inspired Investment Condominium structures to tap into the emerging Brazilian market. Of course, in addition to our skilled workforce and sophisticated legislative framework, The Bahamas benefits from a number of inherent advantages that we can leverage to make ourselves an appealing investment option. Our strategic location just off the south-east coast of the United States, our relative political and economic stability, and our low tax rates all contribute to The Bahamas being an ideal destination for financial services. Our public and private sector commitments to ensuring that we remain competitive within the global market has allowed us to continue to expand and diversify our approach to attracting investments and creating an environment where investments and businesses can thrive. The Ministry of Financial Services is leading the way to ensure that The Bahamas continues to maintain its position atop the region.
Hon. Hope Strachan Minister of Financial Services
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Minister’s Message
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About The Bahamas
Financial Services Having spent over 80 years providing a diversified selection of innovative Financial Services to local and international clients, The Bahamas’ Financial Services sector stands out as a global leader with the legislative and financial expertise to provide the highest level of service.
The Bahamas Advantage
The Bahamas is a stable, robust, well regulated financial and business centre. These competitive advantages, together with our common law tradition, an attractive tax and cost structure, and an investor friendly business climate, have catapulted The Bahamas’ to its household name status in international business and capital development. One of our major inherent advantages as a jurisdiction is our strategic location, just off the coast of America - we are endowed with a prime and accessible location that makes The Bahamas a natural hub for regional and international trade. However, location alone isn’t everything. Our Government is committed to leveraging our geographical strengths by investing in infrastructure to ensure that international and Bahamian investors alike have the necessary facilities to conduct business smoothly and efficiently. Additionally, our Government looks to support the trade agenda with industries, such as our Financial Services industry, to ensure that the required services are present to do business effectively.
The Crucial Role of Financial Services within the Bahamian Economy
Financial Services make up approximately 26% (conservatively) of our GDP, making it the second largest industry within our nation. The sector provides countless jobs
and opportunities for investment and entrepreneurial development for Bahamian citizens, significantly bolstering and stabilizing our middle class. As a foundational element of the Bahamian economy, it is of the utmost importance that our Financial Services sector remains competitive within the global market through our constant evolution and innovation in providing high-level services for our clients. Our government’s commitment to extending opportunities for professional development, education and entrepreneurship to our citizens in order to expand our middle class ensures that we have a skilled Financial Services workforce that is capable of performing at the high level that is demanded by international standards. Closely related to the development of a highly skilled and knowledgeable workforce is our government’s creation of a robust regulatory infrastructure (largely informed by the expertise of local professionals) that empowers Financial Services entrepreneurs and attracts international investors to our shores. The government is committed to investing heavily in the necessary legislative and infrastructural improvements to maintain the Bahamas’ competitive edge as a financial centre.
with a view towards integrating those areas that overlap in order to create a more efficient and effective value proposition for international investors. The Ministry of Financial Services is aggressively promoting The Bahamas as world-class provider for services related to wealth, funds and risk management, which includes the promotion of The Bahamas as a uniquely qualified domain for an international arbitration court. The Ministry is also committed to further developing and leveraging local expertise for the development of an international shipping registry, as well as a world-class yacht registry. Our government will continue to explore innovative approaches to expanding our economic diversity and gaining a foothold into relatively untapped sources of income in order to create a more stable, stronger local economy.
One of the major forces behind our ability to innovate and remain competitive at a global level is the strong partnership formed between the public and private sector agents within Financial Services with a continued focus on the development of domestic human capital and the reenergizing of the Bahamas’ Financial Services brand. Such partnerships include the development of stronger inter-Ministerial ties, such as the relationship between Tourism, Financial Services and Immigration,
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Financial Services
Trade and Industry Trade Strategy
The Ministry continues to advance international trade as a possible 3rd pillar of the economy in an effort to create economic stability and diversification. The Ministry has been advancing a message which seeks to use trade policy and trade promotion to build on platforms which exist, and to forge an environment in which businesses with a commercial presence in The Bahamas may export products and services regionally and internationally. In pursuing growth opportunities available through international trade, the Ministry has been promoting a value added trade strategy which promotes The Bahamas as a crucial component in global value chains throughout North America, Latin America and the Caribbean. Such a strategy has the potential of levelling The Bahamas’ trade balances by simultaneously increasing our export of goods (namely the value-added product) and services (for example distribution, transportation and professional services). A value added strategy involves The Bahamas taking advantage of its proximity to countries which can supply raw or semiprocessed materials for further processing within The Bahamas particularly Freeport. The existence of the free trade zone in Freeport, The Bahamas’ geographical location in the Northern Caribbean with accessibility to North, Central and South
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Trade and Industry
America, increases its viability to become a trade hub for the hemisphere.
Economic Partnership Agreement (EPA)
The Bahamas signed the CARIFORUM –EU Economic Partnership Agreement (EPA) in October 2008. The EPA is the first reciprocal trade agreement signed by The Bahamas. The Agreement establishes inter alia a preferential trade arrangement in which CARIFORUM States (ie. CARICOM States and the Dominican Republic) are engaged in reciprocal, albeit asymmetrical trade liberalization with the European Union. The EPA Agreement replaced the non reciprocal Contonou Agreement between the EU and the African Caribbean Pacific Countries (ACP) which many viewed as discriminatory and inconsistent with WTO rules. To date the EPA Agreement has not entered into force for The Bahamas, but has been provisionally applied since 29th December 2008. The EPA provides for goods, services and investment of businesses established in The Bahamas, preferential access to the markets of the European Union. Market access in respect of goods from CARIFORUM is duty free – quota free into the European Union. In September 2013, the Minister of Financial Services announced the establishment of The Bahamas’ National
EPA Implementation Unit pursuant to Article 5 of the CARIFORUM-EU Economic Partnership Agreement. The Cabinet of The Bahamas approved the appointment of the Chairman of The Bahamas Trade Commission as the “public face” of the Unit with support from the technical trade team from the Ministry of Financial Services.
World Trade Organization (WTO)
The Bahamas is well advanced in the WTO Accession process. The Bahamas made application to accede to the WTO in 2001 and has had two (2) Working Party Meeting. The Bahamas’ first Working Party meeting was held on 14th September 2010 and the second Working Party meeting took place on 21 June 2012. It is anticipated that the Third Working Party meeting will take place sometime in 2016. The Bahamas has also opened a Mission in Geneva. The Mission is headed by H.E. Rhoda Jackson. The Mission is accredited to the United Nations and other International Organizations in Geneva. In terms of the legislative reforms necessary for WTO accession, the steps that are required are less burdensome for The Bahamas because it is a party to the Economic Partnership Agreement (EPA), and many of the legislative changes necessary for WTO accession are in line with changes required for EPA implementation.
Market access negotiations cover both goods and services. Reductions in tariff rates for goods are required. The policy, which is not law does not speak to many sectors.
CARICOM’s Council for Trade and Economic Development (COTED)
The Bahamas as a member of CARICOM also participates in CARICOM’s Council for Trade and Economic Development (COTED). The COTED is responsible for the promotion of trade and economic development of the Caribbean Community. While the COTED’s mandate includes overseeing issues arising under the CARICOM Single Market and Economy (CSME) of the Community of which The Bahamas is not a member and the application of the Common External Tariff of the CSME which The Bahamas does not apply, the COTED is also responsible for promoting and developing, in collaboration with the Council for Foreign and Community Relations (COFCOR), coordinated policies for the enhancement of external economic and trade relations of the Community.
Trading Relationship with the United States
The Bahamas maintains a positive relationship with the United States of America with a substantial amount of its imports originating from the United States.
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With its close proximity to the United States, The Bahamas continues to actively participate in the CARICOM-United States Trade and Investment Council (TIC) meetings which are geared towards the promotion of positive trade relations between CARICOM countries and the United States of America. Last October the Ministry of Financial Services served as host of the Sixth CARICOM-United States Trade and Investment Council (TIC) Meeting.
CARICOM Canada Trade and Development Agreement The Bahamas has also been actively participating along with other CARICOM Member States in protracted negotiations with Canada on a free trade agreement to replace the CARIBCAN unilateral preference agreement. CARIBCAN is the economic and
Trade and Industry
trade development assistance program for Commonwealth Caribbean Countries and Territories which allowed unilateral extension by Canada of duty-free access to the Canadian market for most goods originating in Commonwealth Caribbean countries. A successful conclusion to the Agreement is important for The Bahamas so that it may maintain the duty-free access to the Canadian market that it receives for fisheries products like conch, grouper, crawfish exported to Canada under CARIBCAN.
liberalization in general, and the Government’s Trade Agenda specially.
The Office of Trade Negotiations of the CARICOM Secretariat (OTN) under the Chairmanship of Ambassador Gail Mathurin leads the negotiations on behalf of CARICOM Member States.
Industry Protection, Development Stimulation •Identify industries and sectors vulnerable to trade liberalization
The Bahamas Trade Commission
•Provide recommendations to the Government on how to bolster those vulnerable industries and sectors
The Ministry serves as the Secretariat for the Bahamas Trade Commission. The work of the Trade Commission involves “a Public awareness campaign, assessment of the full implications of the trade agreements and recommending and/ or creating a plan to integrate trade agreements into everyday business activity in The Bahamas.” Mr. Philip Galanis chairs a member Commission. The Commission’s mandate includes:
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•Educate the public on the Economic Partnership Agreement (EPA), World Trade Organization (WTO) access process and negotiations on a replacement Agreement to CARIBCAN •Market and benefits of trade liberalization •Inform on the risks •Expand use of social media in respect of the Trade Agenda
•Assess and determine the extent to which they are vulnerable
•Identify industries and sectors which stand to benefit most from trade liberalization •Identify export opportunities •Inform the Private Sector on how to prepare for trade liberalization
Public Awareness • Serve as the primary artery between the Government and Public in respect of the Government’s Trade Agenda
Market Access/Anti Dumping •Assess from industry constituents the extent to which there has been limitations on market access abroad for their respective products or services.
•Provide Information to the Public and various industry constituents regarding trade
•Provide recommendations to the Government on the posture to assume during trade
Trade and Industry
negotiations in respect of increasing market access. •Identify sectors which are suffering from “dumping”. •Provide recommendations to the Government to counteract “dumping” Integration of Trade Agreements into Everyday Business Activities • Engage the public in dialogue on the timing and mechanism for various liberalization steps. •Recommend and/or create a plan to integrate the trade agreements into everyday business activity in The Bahamas Trade Legislative Agenda •Inform the Government’s Trade Legislative Agenda
IDB Trade Loan
The strengthening of trade-related institutions in The Bahamas is seen as a priority given the pending application of The Bahamas to the WTO and The Bahamas’ obligations under the EPA. To respond to these important priorities, The Government of The Bahamas with the assistance of the Inter-American Development Bank (IADB/IDB) is implementing a Trade Sector Support Programme. The overall objective of the Programme is to improve and strengthen the operational efficiency of the Customs and Excise Department and to prepare the Government of The Bahamas for its formal integration into the
international trading system. The Ministry of Financial Services has responsibility for the third component of the loan, Enhancement of the International Trade Institutional Platform. The Ministry is the implementing/coordinating/ supervising agency for Component III. Component III of the Programme is expected to address inter alia the capacity constraints of trade related institutions in The Bahamas. The enhancement of trade related institutions is crucial for the participation of The Bahamas in international trade negotiations, and for the implementation of EPA with the European Union and other trade agreements which may be negotiated in the future. It is also anticipated that Component III would support the capacity for trade strategy formulation and policy-making, including negotiation and implementation of trade liberalization agreements. The activities under Component III consist of technical and logistic support for the World Trade Organization (WTO) accession process.
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Trade and Industry
The Bahamas Bureau of Standards Who Are We?
The Bahamas Bureau of Standards and Quality (BBSQ) is a body corporate by virtue of the Standards Act (2006) and the Weights and Measures Act (2006) within the Ministry of Financial Services. The BBSQ’s primary function is the formulation and / or adoption of standards, in addition to the administration of a legal metrology service, provision of calibration services, certification services, or consultancy services. The BBSQ also has a regulatory responsibility for operation of legal metrology service, or for official controls including market surveillance of food and non-food products.
Vision Statement
“To be the National principal authority for standards and quality.”
Mission Statement
“Advance national development through the facilitation and promotion of quality services in standardization, metrology and conformity assessment to protect the consumer, enhance international trade and competitiveness of goods and services.”
Core Values
BBSQ operates as an independent organization responsible to the people of The Bahamas and the Ministry of Financial Services. We abide by the highest ethical standards and have the resolution to inform our stakeholders on matters relating to standards and quality. Our core values to help us fulfill our mission and maintain high ethical standards are as follows: • • • • • •
Accountability Integrity Professional Development Networking Relevance Service-Oriented
Mandate And Functions
The Standards Act, Chapter 338A, of 2006 and the Weights and Measures Act, Chapter 338, of 2006 give force to the work of the BBSQ. In this regard, the main functional areas/divisions of the BBSQ as stated are: Standards Development; Legal Metrology; Market Surveillance; Consultancy Services; and WTO TBT Enquiry Point. The functions of the BBSQ: • encourage the use of standard specifications with a view to improving the technical processes and methods used in the industries of the State; • formulate for the Minister, in accordance with the Minister’s directions, specifications for commodities, processes and practices, as the Minister may from time to time request; • formulate a national standard or adopt a standard at the request of any Ministry; • provide advice on request to any Ministry for the preparation of technical regulations. • make recommendations to the Minister on matters concerning standards and certification; • formulate guides, recommendations and codes of practice for processes and practices used in the manufacturing and service industries; • participate in the activities of other national, regional or international standards bodies having objectives or functions similar or relevant to the objectives or functions of the Authority;
membership in CROSQ, which relates to standardisation, harmonisation, certification or inspection; so far as this does not interfere with the functions of other State agencies or bodies; • certify any commodity, process or practice as conforming with Bahamian Standard Specification, or with any standard of another Member State of the CROSQ or with any other recognised published specification; • determine, licence and supervise the use of standard marks in relation to any commodity, process or practice on behalf of itself or of any other body; • arrange for the testing and analysis of commodities; • have responsibility for monitoring compliance with national mandatory standards; • be the national body responsible for matters related to legal metrology in the Bahamas; • act as consultants in the field of standards and provide advisory services to industry, including any service industry; • be the WTO TBT National Enquiry Point for the Commonwealth of the Bahamas; and • adopt every CROSQ standards as a national standard as whenever a standard is formulated or adopted by CROSQ.
• perform any function, arising from the accession of the Commonwealth of the Bahamas to international treaties, conventions or bodies including
Arbitration The Ministry of Financial Services is mandated to create The Bahamas as an international arbitration hub.
• Policy makers must be prepared to allow legislative flexibility in order to keep up with global arbitral trends
Four key areas essential for the development of The Bahamas as an international arbitration hub include:
• Our professionals must be prepared to foster the liberalization of the legal profession in order for international arbitration to thrive
• Identify our key markets and know their preferences when choosing an arbitral seat or venue
resolution must be solidly anchored within the constitution of professional organizations
• Continued training and education in arbitration and alternative dispute 09
The Bahamas Bureau of Standards and Arbitration