05012024 BUSINESS

‘Horrendous’ surge in contractor

• BCA chief: Abandoned clients ‘reaching out’

• Significant’ complaints rise over 1218 months

• ‘Smart contractors’: 30-40% not starting jobs

$100m

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

A LONG-STANDING

Freeport licensee yesterday unveiled a $100m investor and management “dream team” alternative to the Government’s “ugly confrontation” with the Grand Bahama Port Authority (GBPA).

Stephen Crane, the luxury goods and jewellery retail entrepreneur long associated with Freeport’s Colombian Emeralds operation, told Tribune Business he is seeking a “win-win-win” for all sides via his proposal to create a “co-operative or trust” structure that would be charged with managing/ administering not just the Port area but whole of Grand Bahama.

His plan, outlined in a column carried on Page 2B today, would see this

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE BAHAMIAN Contractors Association’s (BCA) president yesterday revealed there has been “an horrendous” increase in complaints over the past 12-18 months about contractors abandoning clients.

Leonard Sands told Tribune Business that some in the industry are “walking away” from residential projects where the financing is either inadequate or not properly structured for them to earn the profit margin they desire.

While not condoning such behaviour, he quickly pointed out that there is little to nothing the BCA and its members can do about such complaints due to

the continued failure to implement the Construction Contractors Act and the potential remedies it provides for shoddy workmanship and other harmful behaviours that impact consumers.

Mr Sands told this newspaper that many homeowners are failing to budget for the significant increase in materials and other construction-related costs over the past 10-20 years and this, combined with an inability to qualify for the true mortgage financing required, often leaves persons unable to fulfill their housing desires.

• Veteran licensee unveils plan to avoid ‘ugly’ fight

• Brands management structure as ‘win-win-win’

• Says Freeport’s ‘real value’ undeveloped land

Bahamas First ‘changes’ after 63% profits decline

By NEIL HARTNELL Tribune Business Editor

nhartnell@tribunemedia.net

BAHAMAS First’s executive chairman has pledged to make “strategic changes” after the insurer’s 2023 full-year profit slumped by 63.1 percent due primarily to “ongoing issues” with its Cayman health business.

Alison Treco, who has taken charge of the property and casualty underwriter’s daily operations following the retirement of group chief executive, Patrick Ward, signalled that there are several issues she is seeking to put right in her shareholder report on the unaudited results for the 12 months to end-December 2023.

“As executive chair, I am currently overseeing the group’s operations as we look to make some strategic changes aimed at improving operational efficiency and, ultimately, the overall performance of the group,” Ms Treco wrote.

“The overall performance for the group for 2023 was a comprehensive income of $6m, which was 14.9 percent ($1m) below the prior year. The group’s profit for the year was $1.6m, down 63.1 percent from the prior year’s result of $4.4m.

“The profit for the property and casualty segments for the year ended December 31, 2023, was $6.5m, a 4.5 percent increase from the prior year. Unfortunately, the group’s result was impacted by the ongoing issues with the health segment, which incurred a loss in 2023 of $4.9m compared to a loss in 2022 of $1.8m.”

Bahamas First’s Cayman subsidiary has been plagued with problems stemming from delays in processing claims as a result of introducing a new information technology (IT) system. Ms Treco conceded this had resulted in “a loss of business”, with

Starlink’s arrival coincides with record Internet users increase

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

FIXED broadband Internet subscribers enjoyed their highest-ever year-over-year increase in 2023 to coincide with the market entrance of Elon Musk’s Starlink service, it was revealed yesterday.

The Utilities Regulation and Competition Authority (URCA), unveiling data on the health of the Bahamian communications market, revealed that fixed broadband Internet customer numbers increased by more than 9,000last year compared to 2022.

“The Bahamas Telecommunications Company (BTC) and Cable Bahamas remain the primary fixed broadband service providers. However, 2023 saw the entry of satellite internet service provider, Starlink, into the market,” URCA noted.

“Cable Bahamas has significant market power in the provision of retail fixed broadband in New Providence, Grand Bahama, Abaco,and Eleuthera, while BTC has significant market power in all remaining islands where only BTC offers broadband services.

“Overall, fixed broadband subscribers increased by 13.22 percent, from 84,022 subscribers in 2022 to 95,123 subscribers in 2023, representing the highest

He added that between 30-40 percent of “smart contractors”, spotting that potential clients have inadequate financing upfront, are walking away from such contracts because they do not want to “start something they know they cannot complete” and either suffer a financial loss or “tarnish their reputation” by abandoning the project.

“A lot of times you find contractors walking away from agreements saying ‘I can’t engage in this contract; I can’t start something I can’t complete’,” Mr Sands said. “That’s the story we are finding more often than not:

management entity set up separately from both the existing GBPA and government structures. It would be led by a group of Bahamian and international executives, who would work alongside investors prepared to invest an initial $100m “to kick-start positive change”. Arguing that “the real value” in Freeport/Grand Bahama lies in “unlocking” its undeveloped real estate, Mr Crane said the newly-created management authority would be charged with valuing this land and creating five, ten and even longer-term master plans to develop these holdings.

While the GBPA’s owners, the Hayward and St George families, and the Government would be represented on its Board, he added that this must also feature investor and Grand

number of fixed broadband subscribers and the largest yearover-year increase since URCA has been tracking the information. The fixed broadband penetration rate increased to 23.68 subscriptions for every 100 persons.”

URCA did not attribute this increase directly to Starlink, whose wireless satellite service has proven especially popular in the Family Islands and remote communities where Cable Bahamas and BTC’s infrastructure does not extend to. A market disruptor, it is drawing plenty of competitive attention from the two Bahamian incumbents. And fixed broadband Internet was not the only communications market segment to enjoy an increase. “The use of landlines (fixed voice services) has seen an increase contrary to the global trend of declining use,” URCA said.

“The Bahamas recorded an 11.85 percent increase in fixed voice subscribers in 2023, the most significant rise since URCA began monitoring these metrics. This increase suggests a return to pre-COVID usage patterns, underscoring the enduring value of landlines in certain segments of the population. The penetration rate for fixed voice

That contractors are not going to take on risk-laden projects where financing is not properly organised to complete this structure.

“At least 30-40 percent are walking away. Projects are just not feasible. They just look at it and say: ‘We’re going to pass on this’. Smart contractors are not going to put their company in that position where they take on a loss just to do work. At the end of the day their reputation will be tarnished if they just move on to the next project without finishing.

“We’ve seen an increase in persons not completing projects. They’re [clients] immediately reaching out to the BCA. That’s picked up significantly over the last 12-18 months. It’s

East GB microgrids set to hire up to 50

By NEIL HARTNELL Tribune Business Editor

UP to 50 workers will be hired for the proposed build-out of five solar microgrids designed to help “ease cost of living concerns” and entice former residents to return to Dorian-ravaged east Grand Bahama. The project’s environmental and social impact assessment, which has been obtained by Tribune Business, disclosed that cost is the primary energyrelated concern for more than three-quarters of the residents in an area which waited around one year for electricity to be restored after the devastating Category Five storm. Now, armed with financing from the InterAmerican Development Bank (IDB), the Ministry of Finance is pushing to boost energy infrastructure resilience in Grand Bahama’s east by developing five solar photovoltaic (PV) microgrids in Freetown, High Rock, McClean’s Town, Sweeting’s Cay and Water Cay. All will be equipped with battery energy storage systems (BESS) to ensure the systems can still generate sufficient energy for these sparsely populated communities when the sun is not shining. Besides enabling their infrastructure and related utilities to rebound more quickly in the aftermath of a major storm, the project is also seeking to

increase and deepen renewable energy penetration in rural areas.

“The rehabilitation and modernisation of The Bahamas’ energy system represents an opportunity to strengthen isolated and interconnected grid networks with reliant renewable energy designed to withstand the increasing frequency and severity of extreme weather events,” the environmental and social impact statement said.

Kwasi Thompson, the east Grand Bahama MP, told Tribune Business yesterday that he has been seeking an update on the project’s fate from virtually the moment that the Davis administration took office in September 2021. He added that it was first conceived under the former Minnis administration, and when he was a member of Cabinet, but it is only now that it is being executed and implemented.

KWASI THOMPSON

ELON MUSK

LEONARD SANDS

MATCH A ‘DREAM TEAM’ AND $100M TO REVIVE FREEPORT

By STEPHEN CRANE

TODAY, there exists an unprecedented alignment of political, social and economic needs for positive change to unlock Grand Bahama’s potential.

Doing so, however, requires a new era of cooperation from all the island’s stakeholders, and the current conflict only delays Grand Bahama’s desperately-needed economic rejuvenation. As one of Freeport’s early entrepreneurs, I understand why the Hawksbill Creek Agreement allowed the island to flourish and, later, what caused its economic downturn. I believe we should now learn from the past, reintroduce positive precedents, and avoid past mistakes so that Grand Bahama can flourish once more. For a new era of cooperation to begin, Grand Bahama’s stakeholders must agree on what the island’s future should look like.

Predictably:

* Grand Bahama’s community wants to benefit from abundant, quality employment for themselves and future generations. They also want better social services, more business opportunities and climate change mitigation. Grand Bahama needs thousands, not hundreds, of new jobs.

* The Government needs to benefit from a prospering community that, through administrative improvements, significantly increases Grand Bahama’s financial contribution to the country while reducing its costs to administer it.

* Grand Bahama’s existing entrepreneurs want to benefit from re-established confidence in Grand Bahama’s management so that their current businesses can prosper alongside new business opportunities.

* The shareholders of the entities that own the island’s large parcels of undeveloped real estate want to benefit from the island prospering once more, but need to reimagine their roles and responsibilities

to the community and The Bahamas. While some advocate a change in the Grand Bahama Port Authority’s (GBPA’s) ownership, the current economic situation - and the Government’s $357m invoice - make a meaningful ownership change, short of nationalisation, next to impossible.

A forced sale or nationalisation of Grand Bahama assets would be extremely detrimental to The Bahamas’ international financial reputation. A change in the management of Grand Bahama’s developer, however, is a much more desirable way to revitalise Grand Bahama’s economy.

Similarly, continuing the status quo is untenable. Nassau has left Grand Bahama behind, and businesses in Freeport and Grand Bahama have been left with a limited market to serve and few prospects for growth.

We need to explore new ways forward, and I would like to offer a recommendation.

One of the most productive and equitable ways of working together would be to create a new business entity in which Bahamians and international investors can buy shares. The new entity, possibly a trust or co-operative, should have a suitable management team to work closely with government to modernise the Hawksbill Creek Agreement to facilitate Grand Bahama’s economic rejuvenation..

A suitably structured entity that allows Bahamians to invest in the island’s future and have a say in how the island is developed presents many opportunities.

* The entity should engage an expert management team with investors prepared to initially invest an estimated $100m to kickstart positive change, and be able to put together a dream team of local and international experts to manage sustainable and equitable development successfully.

* A professional independent valuation of large parcels of Grand Bahama’s undeveloped land needs

‘Major milestone’: Four Bahamians go to Permanent Arbitration court

A CABINET minis-

ter yesterday hailed as “a significant milestone” the appointment of four Bahamians to the Permanent Court of Arbitration for a six-year term.

Michael B. Halkitis, minister of economic affairs, said the appointments of Bertha Cooper Rousseau; Caryl A. E. Lashley; Dr Peter D. Maynard; and retired supreme court justice, Rubie M. Nottage, showed The Bahamas’ desire to establish itself as a “preferred” arbitration and alternative dispute resolution (ADR) jurisdiction in the Americas region.

Asserting that the move shows The Bahamas also has the necessary skills to support an arbitration and ADR centre, the minister added: “The appointment of these Bahamian members of court to the PCA is a significant milestone for The Bahamas.

“It not only represents the commitment of the Government of The Bahamas to

develop and promote our country as a preferred alternative dispute resolution jurisdiction in the Americas, but it also confirms that The Bahamas has the requisite technical expertise in this dynamic and demanding field.

“On behalf of the Government of The Bahamas, I congratulate Mrs CooperRousseau, Mrs Lashley, Dr Maynard and retired justice Nottage on their appointment. I have no doubt that they will represent The Bahamas well and continue to advance The Bahamas’ global position in the field of international arbitration.”

The quartet’s appointments were made in accordance with Article 44 of the 1907 Hague Convention for the Pacific Settlement of International Disputes. This requires members of the court to have known competency in questions of international law; be of the highest moral reputation; and be

willing to accept the duties of arbitrator.

The Permanent Court of Arbitration (PCA) is an inter-governmental organisation that provides a variety of dispute resolution services to the international community. Established in the late 19th century, the PCA facilitates arbitration and other forms of dispute resolution between states as a modern, multi-faceted arbitral institution. The Bahamas became a member state of the PCA in June 2016. Under the International Commercial Arbitration Act 2023, the PCA is an appointing authority, which means that, in certain circumstances, it can determine matters such as arbitrator appointments.

Mrs Cooper-Rousseau said: “The appointment of Bahamian members of the court of the Permanent Court of Arbitration provides the opportunity for The Bahamas to further entrench its position as a serious key player in the

Development to ‘ramp up’ to 200 construction posts

A SOUTH-west New Providence development yesterday said some 200 persons will be employed when construction and infrastructure work “ramps up” this summer.

arbitral world, and access the vast capacity-building and training resources offered by the PCA for professionals connected with dispute resolution.”

Mrs Lashley added: “I consider it a tremendous honour to be appointed to the Permanent Court of Arbitration, and to represent my country in this regard.

“While the resolution of disputes, both locally and internationally, make the world a better place in which to live and work, our participation in these matters at such a high level augurs well for us as a nation. We must, with deliberation, strive for peace. Again, I am honoured, and I am grateful that I have been so considered to serve.”

Dr Maynard, also the Commonwealth Lawyers Association’s president, said: “I am pleased and honoured to be called upon to be one of the newly-appointed Bahamian members of the court of the PCA. This

Bahamians, some of whom will build their own homes, and others who will take advantage of the in-house design and construction package,” said Mr Myers.

to be made and agreed by the current owners and government.

* The new entity should develop five, ten, and 50-year development plans agreed upon with the Government, management and the local community.

* The Government should empower management and investors to adequately fund it by giving it both the responsibility and the authority to successfully execute the entity’s long-term objectives.

* New international and local investment should be raised to fund structural improvements and the rebranding of Grand Bahama’s extraordinary investment opportunities.

* The new entity’s Board of Directors should be made of representatives of all stakeholders. Of course, many details would need to be agreed upon to establish how the new investment should be structured, but with a strong will to co-operate, this could be successfully accomplished.

appointment marks a significant milestone in the ongoing commitment of The Bahamas to the principles of international dispute resolution and the peaceful settlement of these disputes.

“The 1907 Hague Convention for the Pacific Settlement of International Disputes stands as a testament to the international community’s dedication to resolving conflicts peacefully, rather than resorting to violence or coercion. By appointing Bahamian members to the PCA, The Bahamas reaffirms its commitment to upholding these principles and contributing to the promotion of international peace and security.

“It also reflects the confidence placed in The Bahamas’ legal expertise, integrity and impartiality. As representatives of The Bahamas on the international stage we, as appointed member will undoubtedly bring a wealth of knowledge and experience to our roles, further enhancing the PCA’s effectiveness in facilitating the resolution of international disputes,” Dr Maynard added.

“I commend The Bahamas for its proactive engagement in the international arbitration community, and its

To expand the shareholder base, the Government should defer charging the GBPA for services it provided in the past and give its full support to increasing Grand Bahama’s future financial contribution to the country while reducing its cost to administer the island.

The existing landowners (the Hayward and St George families) should be thanked for their years of service, but also encouraged to recognise that the island and the country now need new management to meet everyone’s interests. The landowners would benefit from increased investment and positive government relations.

It is almost 70 years since the Hawksbill Creek Agreement was signed, and the Government should agree to update it and extend its provisions to the entire island, allowing all of Grand Bahana to be totally revitalised and prosper under new management. It is time for all the island’s stakeholders to embrace brave new changes.

dedication to promoting the rule of law and the peaceful settlement of disputes. I am confident that the other appointed members and I will serve with distinction and contribute significantly to the work of the PCA in these upcoming years.”

Retired supreme court justice, Rubie Nottage, said:

“My appointment as a Bahamian member of the court of the Permanent Court of Arbitration is a unique and significant one for me, as it is the first time that any Bahamian has been appointed to this internationally prestigious body which sits at the Peace Palace in The Hague, Netherlands.

“I am truly humbled, and I thank the Bahamian government and the people of the Commonwealth of The Bahamas for naming me among the first appointees in our nation’s history, and to be found worthy of this stellar international honour.

“As a certified Bahamian arbitrator, I welcome the opportunity to serve as a Bahamian member of the court...This appointment is a crowning achievement to my 54 years of service as an educator. and as a member of both the Bahamas Bar and the Supreme Court Judiciary.”

environmental, hydrological, civil, electrical and architectural professionals. The development is a uniquely Bahamian development being built by Bahamian contractors.”

Windsor Lakes, whose principals are former Chamber of Commerce chairman, Robert Myers, and Bahamas resident, Michael Huttman, said in a statement that 84 percent of the 60-plus lot sales and reservations to-date have been to Bahamian purchasers. It added that 37 percent of available properties have been taken. Given that the project has 173 lots total, split into 37 multi-family and 136 single family, this implies that around 64 have either been sold or reserved. And, using the 84 percent figure provided by Windsor Lakes, this suggests that around 54 of the sales have been to Bahamian buyers.

“We are purposely reconstructing the wetland habitat around the lakes to create an enhanced habitat for the wetland fish, birds, organisms and plant species that will be enjoyed by the homeowners and guests of Windsor Lakes.

“To date, 37 percent of the properties are under reservation agreements or sales contracts. Eighty-four percent of those buyers are

“Every part of the design concept has been carefully planned and engineered by all Bahamian

“We are committed to providing a modern, multiuse development that looks to also improve the value of surrounding communities by fulfilling our approved design and development obligations,” he added.

Windsor Lakes said that, as infrastructure and construction work accelerates over summer 2024, some 200 workers will be employed through local contractors and industry suppliers.

Mr Myers said Windsor Lakes has met or exceeded all of The Bahamas’ environmental and development laws, and has maintained good relations with the Department of Environmental Planning and Protection (DEPP) through its on-site environmental monitors during all sensitive construction phases.

RBC names new top Bahamas executive

RBC Royal Bank (Bahamas) has named Ericka Rolle as managing director for its operations in this nation and the Turks and Caicos Islands (TCI).

Ms Rolle, who currently serves as Cayman Islands country head, will return to The Bahamas to take up her new position with effect from May 1, 2024. Besides becoming managing director, she has also been appointed to the role of vice-president of personal banking. Ms Rolle is also replacing LaSonya Missick, who has moved on to a new role as regional vice-president for personal and private banking and RBC FINCO. In addition, she serves as a Caribbean banking executive management committee (EMC) member. Ms Missick is the first Bahamian to be appointed to RBC Caribbean’s executive leadership team. As Managing Director, Ms Rolle will serve as RBC’s lead on all governance and regulatory matters. She has spent nearly 30 years in the banking industry, holding roles such as managing director at BISX-listed FINCO

and other sales and operations roles with proven results. Ms Rolle has also served on several boards, including FINCO’s and Safeguard Insurance Brokers, where she served as chairman.

“Ericka is well prepared for the challenges and opportunities for this next step in her career,” said Ms Missick. “With a proven track record of driving organisational success and fostering strong client relationships, Ericka is poised to lead our Bahamas and TCI teams to new heights. On behalf of the leadership team in the Caribbean, we congratulate Ericka on her new role and wish her continued success.”

ERICKA ROLLE

BUS PASSENGERS BRACE FOR 25 CENT FARES HIKE

breaks and weekends. Primary school students in uniform and senior citizens remain at 50 cents and 75 cents, respectively

THE Government last night released the increased bus fares for New Providence and Grand Bahama that take effect today with adults and high school students bracing for a 25-cent rise.

Jitney fares increased by 25 cents for adults and junior and senior high school students. This increase takes the bus fare to $1.50 for adults and $1.25 for junior and high school students in uniform during school hours, plus $1.50 for the latter during school

The Ministry of Energy and Transport, in a statement, said the last fare increase for bus drivers was granted more than 14 years ago. It added that it will introduce new bus routes and stops to improve the public transportation system.

“Omnibus fares were last adjusted in October 2008 – more than 14 years ago. Going forward, the ministry plans to introduce new routes and bus stops to facilitate a more accessible and safe public transportation system,” said

the Ministry of Energy and Transport.

“Members of the public should refer to the authorised bus fares to ensure awareness of the new fees. The Ministry of Energy and Transport remains committed to improving the quality of service in the transportation industry for the benefit of all Bahamians.”

During a Town Hall meeting with bus drivers and owners earlier this month, the industry said they found the 25 cent increase “insulting” when faced with rising diesel and operating costs.

Harrison Moxey, the United Public Transportation Company’s (UPTC) president, whose union had

been advocating for a fare increase of 75 cents, from $1.25 to $2, called for the decision to be revisited.

Jobeth Coleby Davis, minister of transport and energy, maintained that she fought for the industry but government has to “find a balance” due to buses servicing the general public. She said she was able to get “something to start with” and that her intentions were not to insult the sector.

Other increased fares for New Providence include: Downtown to Adelaide Village $1.75; Downtown to Compass Point, $1.75; Downtown to any area beyond Compass Point, $2.50; Downtown to any area beyond Compass/

Adelaide Village (Clifton Pier – South Ocean),$2.50; between Coral Harbour and Adelaide Village, $1; between Winton Highway and the Eastern Road, $0.75; and between Blake Road and Compass Point, $0.75.

Increased rates for Grand Bahama are: Any area in the City of Freeport, $1.50; Downtown to Smith Point or Williams Town, $1.50; Downtown to Club Fortuna, $2.25; Downtown to Free Town, $4.75; Downtown to Bevans Town, $4.75; Downtown to High Rock, $5.25; Downtown to Pelican Point, $7.25; Downtown to McClains Town, $10.25; between Free Town and Bevans Town, $1;

between Bevans Town and High Rock, $1.50; between High Rock and Pelican Point, $2.75; between Pelican Point and McClains Town, $2.75; Downtown to Pinder’s Point, $1.75; Downtown to Eight Mile Rock, $2; Downtown to Sea Grape, $2.00; Downtown to Holmes Rock, $2; Downtown to Deadman’s Reef, $4.75; Downtown to West End, $5.25; between Eight Mile Rock and Sea Grape, $1.50; between Sea Grape and Holmes Rock, $1.50; between Holmes Rock to Deadman’s Reef, $1.50; and between Deadman’s Reef and West End, $1.50.

Minister urges private sector aid for ‘country-changing’ initiative

By FAY SIMMONS Tribune Business

A CABINET minister last night urged the private sector to participate in the National Apprenticeship Programme and improve workforce skills levels.

Pia Glover Rolle, minister of labour and the public service, at a meeting with human resources executives urged corporate Bahamas to become part of the solution to the issues many employers have with recruiting and retaining staff.

She said: “I would like to invite you all, as human resources leaders in our country, who are finding it hard to recruit, finding it hard to engage, finding it hard to train and retrain and retain staff, which equates to loss, loss of money and no business likes to lose revenue, or training dollars.

“So we’re asking you to buy into this what we call country-changing initiative; this country changing work that is being done, and that you and your organisations will become a part of the

solution that we have all in human resources been lamenting.”

Mrs Glover-Rolle explained that the apprenticeship programme will be nationally and

internationally-recognised and can “shape the culture of our workforce”. It will include incentives for employers and organisations.

She said: “The programme is going to be, and has been so far, very data driven, very labour market responsive based on surveys, based on stakeholder meetings, based on studies. And it will be a nationally and internationally-recognised apprenticeship that will not only shape the culture of our workforce but the future of our country.

“One of the key takeaways we brought back from our talks with other countries is also we need to create incentives for you, for the employers, to participate. And we’re developing and communicating, and we’ll be communicating those incentives to you in short order. But we also recognise that there has to be some value

for you, as well as organisations and as employers.”

Speaking to Tribune Business, Mrs Glover Rolle said since the Apprenticeship Bill has been out for public consultation there has been “positive feedback”. She said the Governmentnis still consulting with the private sector on exactly what the incentives for their participation will be.

“We’re very pleased to note that since we’ve been putting our Bill out for consultation, we’ve been getting a lot of positive feedback and desire for private sector employers to be a part of the National Apprenticeship Programme, so we’re very encouraged by that,” she added.

“We’re still investigating what some of those incentives will be, and this will be by having conversations like this with the employers. What benefits them? What does your organisation need that could give it a

boost that the Government can offer? So once we come to that conclusion, we will be rolling out those incentives to employers.” Mrs Glover-Rolle added that employers want workers that are “trainable”, and the incentives will not be for their participation as there are “no issues” with recruitment, but to encourage businesses throughout the country to be a part of the “solution to improving our labour market”.

She said: “Private sector is wanting to engage employees that are trainable, employees that have fresh perspective. We will also have to give some incentives to organisations, not to participate because we have no issues with participation to date…but incentives to encourage more organisations across the country to be a part of what we call the solution to improving our labour market.”

STARLINK’S ARRIVAL COINCIDES WITH RECORD INTERNET USERS INCREASE

services has also risen from 21.75 to 24.08 subscriptions per 100 inhabitants.”

As for mobile services, URCA added: “These numbers show the sector has witnessed a slight contraction in the number of mobile phone subscribers, decreasing from 403,993 in 2022 to 399,630 in 2023,

a 1.08 percent reduction year-over-year.

“The number of mobile phone subscribers has remained steady since 2020 with minor fluctuations of less than 2 percent annually. The mobile subscriber penetration rate experienced a marginal decline from 101.61 to 99.47 mobile voice subscriptions per 100 persons between 2022 and 2023.” Mobile dataonly subscriber numbers remained flat at 33,232 in 2023 compared to 33,327 the year before.

“Retail mobile data services represent a niche

segment that caters to users who exclusively subscribe

“The

Little Switzerland, the chain of luxury jewelry and watch stores across the Caribbean is looking for a

Diamonds for the Nassau store.

This role will be responsible for the rapidly growing Diamond department including person and Store sales, Merchandising, Store Presentation, Inventory, and team training. Must have experience and success in personally selling high end, luxury products, and currently authorized to work For

‘Horrendous’ surge in contractor walk-aways

horrendous,” the BCA president continued.

“It’s back to what I am saying. Persons are taking on these projects that are not properly financed, finding themselves in a difficult situation, and walking away. The clients then come to the BCA looking for a remedy that we unfortunately cannot provide.” He added that, without regulation, construction will continue to endure “the hodge podge challenging situation that exists”.

Speaking after the Central Bank’s 2023 second half lending conditions survey revealed that new mortgage loan applications fell by 14.6 percent year-over-year, Mr Sands said: “It’s not really concerning. It’s what we’ve predicted and it will continue to decline.”

Mortgage-financed home and residential construction has typically been the so-called ‘bread and butter’ for Bahamian contractors and sub-contractors, but the BCA president said his assessment is based on the “diminishing capacity” of

Bahamians to qualify for such loans as well as the challenges many have in meeting the requirements set by the commercial banks.

“Those two produce the net outcome of a reduced number of persons qualifying for mortgages,” Mr Sands said, while citing a third factor as the lack of awareness among many successful mortgage applicants over how much home their loan will allow them to build.

Homeowners, he argued, had failed to account for the increase in construction costs and were still budgeting using figures from 10-20 years ago. “They are not realistic,” Mr Sands said. “We find they go to the bank, qualify for $200,000 and want a 4,000 square home. It’s not realistic, it’s not practical and is largely based on the lack of educa-

don’t consider is that construction companies are businesses. As the business environment becomes more and more regulated, the cost in goods and services has to be represented in the work we do.

“The biggest challenge we find is the amount of persons able to qualify for the homes they require. They don’t appreciate how much they have to spend to build a home. Persons who may be wanting a 3,500 square foot home may not recognise the cost per square foot and have to scale back or come up. It’s simple economics.”

Besides 10 percent VAT, which did not exist ten years ago, Mr Sands said contractors and clients also have to contend with relentless inflation and other government tax and fee increases. Contractors typically seek a gross profit margin of 10 percent.

While the improvement in the 2023 second half mortgage loan approvals rate was “encouraging”, the BCA chief argued that bank lending in The Bahamas needs to “evolve” into how it functions in the US and Canada where it is treated as a “line of credit” as opposed to a residential mortgage.

The latter treatment, Mr Sands argued, “limits the

ability to access financing to complete construction”. He added: “Banks need to get out of construction. They tend to manage construction and how they dispense the funds,” he added. “That creates another level of hardship for homeowner and contractor relationships. That has continued to produce the reduced numbers we will see for the considerable future.”

The latest Central Bank lending conditions survey revealed continued sluggishness when it came to mortgage lending. Applications were down when compared to both the 2023 first half and final six months of 2022, although the approval rate for these improved by almost 15 percentage points to 52.9 percent.

Mortgage lending continues to be relatively weaker than its consumer and commercial lending counterparts. Total mortgage applications for the 2023 second half, numbering 785, were 14.4 percent down on the 917 received during the same period in 2022, and also some 28.9 percent below the 1,104 submitted during the 2023 first half.

However, the 2023 second half applications appear to have been of better quality. Some 415, or 52.9 percent, of those mortgage loan

submissions were approved, making for a year-overyear improvement of 19.3 percent in the number that received the go-ahead and a 14.9 percentage point rise in the approval rate. Similarly, compared to the 2023 first half, the number of approved mortgages over the final six months of 2023 jumped by 16.6 percent while there was a 20.6 percentage point improvement in the approval rate. Residential mortgage applications contracted by 14.6 percent year-on-year, a slowdown from the 21.6 percent decline in December 2022. Reductions were recorded for all three major categories: New construction (27.3 percent), existing dwellings (12.7 percent) and rehabilitations and additions (8.5 percent),” the Central Bank survey said.

“Mortgage applications retained the lowest approval rate of all credit categories at 52.9 percent over the last half of 2023. The approval rate for renovation projects was 14.5 percent, while new construction approvals were 69.1 percent. Meanwhile, 92.5 percent of requested borrowings against existing dwellings were approved.”

IN THE MATTER of the Quieting Titles Act, 1959 Chap 393 of the Statute Law of the

AND IN THE MATTER of a tract of land comprising Thirteen and Three hundred and Sixty-nine thousandths (13.369) acres situate approximately 0.85 miles Northwest of Haynes Avenue in the settlement of Governors Harbour in the island of Eleuthera one of the Islands of the Commonwealth of the Bahamas

AND IN THE MATTER of the Petition of Jenifer Doon McKinney

NOTICE OF PETITION

NOTICE is hereby given that by Petition filed in the Supreme Court of the Commonwealth of the Bahamas on the 22nd day of December, A D 2022 JENNIFER

DOON MCKINNEY of Old Queen s Highway in the Settlement of Governors Harbour in the Island of Eleuthera one of the islands of the Commonwealth of the Bahamas (hereinafter called, “the Petitioner”) claims to be the owner in fee simple estate in possession of the tract of land described as:

ALL THAT piece parcel or tract of land comprising Thirteen and Three hundred and Sixty-nine thousandths (13.369)

the improvements and corrections made unlikely to be fully felt until Bahamas First’s 2025 financial year.

“For the year ended December 31, 2023, Cayman First Insurance Company’s health unit saw a 12.9 percent decline in gross written premium compared to 2022. The loss of business resulted from the issues with claims payments in 2023 arising from the implementation of the new IT system,” Ms Treco affirmed.

“In 2023, the health operation also experienced an increase in costs as Cayman First sought to remediate the issues and this, combined with the lower premium level, resulted in a higher loss on the segment than prior year.

“The loss ratio did not deteriorate when compared to the prior year but is still unacceptably high. Cayman First is implementing the necessary adjustments to pricing to improve the loss ratio but this will not impact financial results until late

NOTICE JUCABRA LTD.

Incorporated under the International Business Companies Act, 2000 of the Commonwealth of The Bahamas. Registration number 203098 B (In Voluntary Liquidation)

Notice is hereby given that the above-named Company is in dissolution, commencing on the 29th day of April A.D. 2024. Articles of Dissolution have been duly registered by the Registrar. The Liquidator is Mr. Juvencio Cavalcante Braga, whose address is SCES Trecho 04, Lote 05, Apt. A111, Brisas Do Lago, Brazil. Any Persons having a Claim against the above-named Company are required on or before the 30th day of May A.D. 2024 to send their names, addresses and particulars of their debts or claims to the Liquidator of the Company, or in default thereof they may be excluded from the benefit of any distribution made before such claim is proved.

Dated this 29th day of April A.D. 2024. Juvencio Cavalcante Braga Liquidator

2024 and into 2025,” the Bahamas First executive chair added.

“In the last quarter of 2023, Cayman First engaged a new chief executive and vice-president of health with the immediate goal of stabilising operations. This has resulted in a significant improvement in the claims turnaround time to within regulatory guidelines.

“There are some claims legacy issues that are still being worked through. As we continue to remediate the issues in 2024, the health unit is expected to incur costs over and above the expected operational norms.”

Meanwhile, Ms Treco warned that the ‘hard’ reinsurance market means Bahamas First’s local business and homeowner clients will not see any relief from high property and casualty insurance premiums in the near future.

“The reinsurance capacity for property and catastrophe insurance remains limited entering 2024, and the restricted capacity also comes with a cost as reinsurers are requiring premium increases,” she explained.

“As a result, the increase in reinsurance costs has had a significant impact on our customers’ rates and is unlikely to reduce in the near future. The lack of catastrophe claim events and resulting increase in profit commission from reinsurance contracts contributed to the improved profit over prior year.”

Focusing solely on Bahamas First’s fourth quarter results for the three months ended December 31, 2023, Ms Treco added: “For the three months ended December 31, 2023, the group reported a total comprehensive income of $6.8m which was 11.4 percent ($0.9m) below the 2022 fourth quarter.

“The group’s profit for the fourth quarter was $3.3m, which was 34.1 percent lower than the prior year despite higher insurance revenue, which was offset by higher operating expenses. Prior year profit was also aided by revaluation gains on building revaluation of $0.8m within investment and other income.

“As in the previous year, the seasonal nature of earning premium and commission is significantly weighted to the fourth quarter, resulting in a higher profit in the fourth quarter than the total profit for the year.”

East GB microgrids set to hire up to 50

FROM PAGE B1

“The Minnis administration had left in place a microgrid project for east Grand Bahama,” he said.

“I have been asking for an update since the first Budget exercise [by the Davis administration]. I have been asking the Government to update the public with what is happening with that project.”

Mr Thompson declined to make any further comments until after next Thursday’s public consultation with his constituents.

Microgrids are effectively self-sufficient energy systems that serve small communities such as those typically found in east Grand Bahama.

An analysis of the project’s economic and social impacts, performed as part of Waypoint Consulting’s environmental assessment by Nassau-based The Heritage Partners, suggested the improved supply reliability and reduced energy costs promised by the project will entice more former residents to return home.

“In the ADI (area of direct influence), economic conditions have improved since Hurricane Dorian but it is difficult to assess the degree of such improvements,” Heritage

Partners said in an April 2024 report. “The few tourist accommodations that were present in the ADI were, in the main, either significantly damaged or completely destroyed after Hurricane Dorian, and the majority have not been rebuilt to date.

“Respondents to our survey cite that many community members have emigrated to other parts of Grand Bahama or outside of the ADI due to housing insecurity resulting from the storm, cost of living concerns, and lack of employment opportunities. The project would presumably incentivise rebuilding efforts, alleviate cost of living concerns and encourage community members to return to the ADI.”

Of the 53 east Grand Bahama residents said to have been surveyed, more than half described themselves as self-employed.

“The project is estimated to create up to 50 jobs in the ADI during the construction period, and will require the appointment of a local workforce,” the report said. “These workers are expected to be sourced from the ADI where possible... or from other places in The Bahamas.

“The construction period will range from six to 12 months. After the construction period, there is expected to be ongoing operations and maintenance at the project sites. As the project moves out of the construction phase and into the operations phase, there will likely be a subsequent decrease in the workforce requirements.”

A potential housing shortage was, though, identified if construction workers have to be imported from outside east Grand Bahama. “Hurricane Dorian resulted in the damage and destruction of many of the residences in east Grand Bahama, and the subsequent displacement of community members,” the Heritage Partners report said.

“To-date, the rebuilding efforts have been steady though hindered by economic concerns, and a sizable portion of the displaced population has since returned to the ADI. There is a concern as to whether sufficient housing exists to meet the needs of the project workforce, especially in the case of non-local workers. Additional housing may therefore be needed.”

As to the energy-related concerns of Grand Bahama

residents, obtained via a February and March 2024 survey, the report said: “Respondents generally spoke of being greatly impacted by Hurricane Dorian, especially with regard to energy supply.

“According to them, they were without electricity for almost a full year. Some Sweetings Cay residents told our team that they were without power for up to two years. A great number of respondents left the ADI due to storm damage, and relocated to other parts of Grand Bahama or off-island.

“The majority of those who remained in east Grand Bahama used fuelpowered electric generators for energy supply. These were either purchased by the residents in question or were donated to residents by NGOs (non-governmental organisations) operating in Grand Bahama postDorian,” Heritage Partners added.

“The cost of fuelling the generators was reported as ranging between $60 a week to $500 a week, depending on the energy needs of the household in question. Residents also resorted to the use of kerosene lamps, as well as solar hand lights that were supplied to them by NGOs.

“To-date, electricity supply has been fully restored by Grand Bahama Power Company throughout the ADI, with the exception of Water Cay. Each survey respondent but one - a Freetown resident who is in the process of rebuilding his home - is currently being provided with electrical power from GB Power.”

Some east Grand Bahama residents were still said to be using generators, and ten survey respondents said they were on “temporary power” with GB Power as opposed to full power. The utility said this was because those in question are still rebuilding post-Dorian, and will be converted to “full power” once they get the necessary approvals and occupancy certificate.

“Although temporary power is typically intended for construction purposes, it appears to be a common practice for residents who are in the process of rebuilding while living in their homes to use temporary power to supply their homes with electricity,” Heritage Partners reported.

“Temporary service is more expensive than permanent service (25.85 cents per kilowatt hour for temporary compared to

$100M ‘DREAM TEAM’ PITCHED AS GBPA CONFRONTATION ALTERNATIVE

Bahama community repre-

sentatives. And Bahamians will also have an opportunity to buy shares in this management authority “so that it’s not an outside entity all the time”.

Mr Crane asserted that his plan has multiple potential benefits. For the GBPA’s owners, he argued that it would unlock value and investment returns that they and existing management have failed to realise from Port area landholdings, while the Government would be relieved of the financial and administrative burden it presently faces not just in the Port area but the whole of Grand Bahama.

And, by emphasising collaboration as opposed to confrontation, it would end an “untenable status quo” by providing Freeport with a future development path that avoids any perceptions the Government is seeking to “nationalise” the GBPA via its $357m reimbursement demand.

“While some advocate a change in the GBPA’s ownership, the current economic situation and the Government’s $357m invoice make a meaningful ownership change, short of nationalisation, next to impossible,” Mr Crane writes in Tribune Business today.

“A forced sale or nationalisation of Grand Bahama assets would be extremely detrimental to The Bahamas’ international financial reputation. A change in the management of Grand Bahama’s developer, however, is a much more desirable way to revitalise Grand Bahama’s economy.

“Similarly, continuing the status quo is untenable. Nassau has left Grand Bahama behind, and businesses in Freeport and Grand Bahama have been left with a limited market to serve and few prospects for growth. We need to explore new ways forward, and I would like to offer a recommendation.”

Mr Crane acknowledged Freeport’s dilemma - that the city needs new vision and investment at the GBPA’s ownership and management level, but very few of its residents want this to be provided by the Government taking over its quasi-governmental powers and regulatory authority.

“One of the most productive and equitable ways of working together would be to create a new business entity in which Bahamians and international investors can buy shares,” Mr Crane said. “The new entity, possibly a trust or co-operative, should have a suitable management team to work closely with government to modernise the Hawksbill Creek Agreement to facilitate Grand Bahama’s economic rejuvenation..

“A suitably-structured entity that allows

Bahamians to invest in the island’s future, and have a say in how the island is developed, presents many opportunities. The entity should engage an expert management team with investors prepared to initially invest an estimated $100m to kick start positive change and be able to put together a dream team of local and international experts to manage sustainable and equitable development successfully.”

Mr Crane admitted that “many details would need to be agreed upon to establish how the new investment should be structured, but with a strong will to co-operate, this could be successfully accomplished”. However, his plan would need co-operation and agreement from the Government, GBPA and the latter’s partner, Hutchison Whampoa, as well as the GBPA’s licensees.

It is far from clear this would be forthcoming, especially with the first three, although Mr Crane’s plan has some similarities with the clause in Hawksbill Creek Agreement, Freeport’s founding treaty, which stipulates that the GBPA’s quasi-governmental and regulatory powers be devolved to a local government-type authority if approved by a majority 80 percent of its licensees.

The management “trust or co-operative’s” role, responsibilities and relations with the Government, GBPA and Hutchison would all need to be determined. But Mr Crane said his proposal offers a potential way out of the current confrontation between the Government and GBPA that threatens to throw Freeport’s growth and development into uncertainty for several years if arbitration proceedings are launched.

“I’m trying to get a winwin-win out of it rather than this ugly confrontation which is not taking us very far,” Mr Crane told Tribune Business of the Government’s $357m payment demand. “I don’t seen that as a positive way forward.

“To a certain extent it could be, because it flushes out the current situation, which is a step in the right direction. But I’m not sure it’s the correct way of doing it. Be that as it may, it’s not helpful. This has to be through co-operation; it cannot be through litigation.

“With that in mind, I think getting together some form of co-operative or trust that takes over undeveloped land on Grand Bahama would be a really constructive way forward, and having it managed by completely new people as well as the rest of Grand Bahama.”

The majority of that undeveloped land, close to 70,000 acres, is held by the Grand Bahama

Development Company (DevCO), whose ownership is split 50/50 between Hutchison and the GBPA’s Port Group Ltd affiliate. It is highly unlikely they would simply hand over their undeveloped land holdings to the management-style entity proposed by Mr Crane. He, however, said the Haywards and St Georges would still be able to participate in his suggested structure. “They’d have a much better chance of getting a return on their assets than under the current structure,” Mr Crane said. “What has happened, to me, is this move [by the

Government] has made changing the ownership of the land just almost impossible.

“The only thing of real value on Grand Bahama is the undeveloped land. Not only has the Port failed to develop it, but Hutchison, the other major landowner, has not done anything for whatever reason. I don’t know. It’s not helping the community’s jobs and employment grow. It needs to be unlocked...

“It’s tough to work out what the Port Authority wants. It’s even tougher to work out what Hutchison want to do. They’ve abandoned Grand Bahama in

essence apart from the Container Port and harbour. They walked away from the airport, they walked away from the hotel. That didn’t sit easy with the Government and it didn’t sit well, I suspect, with me.”

Mr Crane said the Government’s concerns over incurring a deficit in not just the Port area, but also spending more than it earns in taxes from East End and West End, could be solved by giving his proposed management structure administrative authority and responsibility for providing public services across the whole of Grand Bahama.

17.56 cents per kWH for 0-200 kWh up to 23.71 cents for over 800 kWH) and the supply is limited, so respondents on temporary power report that they must ration which appliances they can use at any one time or else their circuit breaker will trip.”

“Said one respondent, a married mother of 2 from Rocky Creek: ‘On temporary power...you can’t run all your stuff or the lights will dim and the breaker will trip. For me, it almost caused a fire when my stuff started to spark....

“I don’t have a heater, no AC, no microwave. I have one TV, two lightbulbs in my whole house. One fan and only a gas stove. I don’t understand why my power bill is so high, because I don’t be running nothing like that. I only turn my lights on at night, so why I paying $80 or $90 a month’?”

As for electricity-related concerns, Heritage Partners said power costs were the leading worry for 39 or 72.22 percent of survey respondents, while a further 11 percent cited reliability and incidents of load shedding and outages as their primary fear.

“I’m advocating that this new entity, whatever it is, should be structured so Bahamians can invest in it and it’s not an outside entity all the time,” he added. “It’s part of the community with a Board of Directors representative of the Government, community and international parties involved with people contributing investment to its success.” Mr Crane said he believed the Government is wise enough not to attempt, or be seen attempting, a forced sale or nationalisation of the GBPA as that would “set a precedent that will terrify other major investors in the future”. He added: “I don’t think that’s their first desire.”

To the Shareholders of EQUITY BANK BAHAMAS LIMITED

Opinion

We have audited the consolidated fina ncial statements of Equity Bank Bahamas Limited and its subsidiaries (“the Group”), which comprise the consolidated statement of financial position as at 31 December 2023, and the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as at 31 December 2023, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (“ISAs”).

Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged wi th Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal controls as management determines are necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

BINANCE FOUNDER CHANGPENG ZHAO SENTENCED TO 4 MONTHS FOR ALLOWING MONEY LAUNDERING

By GENE JOHNSON Associated Press

To the Shareholders of EQUITY BANK BAHAMAS LIMITED

In preparing the consolidated financial statem ents, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can aris e from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

 Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal controls.

 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

 Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

CHANGPENG Zhao, founder of the world’s largest cryptocurrency exchange, was sentenced Tuesday to four months in prison for looking the other way as criminals used the platform to move money connected to child sex abuse, drug trafficking and terrorism.

U.S. District Judge Richard A. Jones credited the founder and former CEO of Binance for taking responsibility for his wrongdoing. Zhao, 47, pleaded guilty in November to one count of failing to maintain an anti-money-laundering program. Binance agreed to pay $4.3 billion to settle related allegations from the U.S. government.

“I failed here,” Zhao told the court Tuesday. “I deeply regret my failure, and I am sorry.”

But the judge said he was troubled by Zhao’s decision to ignore U.S. banking requirements that would have slowed the company’s explosive growth. “Better to ask for forgiveness than permission,” is what Zhao told his employees about the company’s approach to U.S. law, prosecutors said.

“No person — regardless of wealth — is immune from prosecution or above the laws of the United States,” Jones said.

The sentence, which included a previously agreed-to $50 million fine, was far less than the three

years the Justice Department had sought, but defense attorneys had asked that Zhao spend no time in prison.

Zhao is the first person ever sentenced to prison time for such violations of the Bank Secrecy Act, which requires U.S. financial institutions to know who their customers are, to monitor transactions and to file reports of suspicious activity. Prosecutors said no one had ever violated the regulations to the extent Zhao did. If he did not receive time in custody for the offense, no one would, rendering the law toothless, they argued.

“This wasn’t a mistake,” Justice Department lawyer Kevin Mosley told Jones. “When Mr. Zhao violated the BSA he was well aware of the requirements.”

For example, Mosley said, Zhao directed the company to disguise customers’ locations in the U.S. in an effort to avoid having to comply with U.S. law.

The Justice Department on Monday sent a letter urging Congress to stiffen penalties in such cases. Violations can allow billions of dollars to flow illicitly through the U.S. financial system, but penalties under the government’s sentencing guidelines are “poorly calibrated to address the severity of the crimes,” the letter said.

Binance allowed more than 1.5 million virtual currency trades, totaling nearly

$900 million, that violated U.S. sanctions, including ones involving Hamas’ alQassam Brigades, al-Qaeda and Iran, prosecutors have said.

Defense attorneys Mark Bartlett and William Burck told the judge there was no evidence Zhao knew of any specific transaction that would have been barred by U.S. regulations or sanctions. Also, they argued, Binance transactions that violated U.S. sanctions constituted a miniscule portion for a company that processed trillions of dollars per year. And they noted that Zhao began making changes to improve Binance’s compliance before stepping down.

In a letter to the court, Zhao wrote that there was “no excuse for my failure to establish the necessary compliance controls at Binance.”

“I wish I could change that part of Binance’s story,” he added. “But under my direction, Binance has now implemented the most stringent anti-money laundering controls of any non-U.S. exchange, and those controls have been in place since 2022.”

Zhao, his legal team and family members left after Tuesday’s hearing without speaking to reporters. Zhao will report to serve his sentence at a date yet to be determined.

The cryptocurrency industry has been marred by scandals and market meltdowns.

US poised to ease restrictions on marijuana in historic shift, but it’ll remain controlled substance

By ZEKE MILLER, JOSHUA GOODMAN, JIM MUSTIAN and LINDSAY WHITEHURST Associated Press

U.S. Drug Enforcement Administration will move to reclassify marijuana as a less dangerous drug, The Associated Press has learned, a historic shift to generations of American drug policy that could have wide ripple effects across the country.

The proposal, which still must be reviewed by the White House Office of Management and Budget, would recognize the medical uses of cannabis and acknowledge it has less potential for abuse than some of the nation’s most dangerous drugs. However, it would not legalize marijuana outright for recreational use.

The agency’s move, confirmed to the AP on Tuesday by five people familiar with the matter who spoke on the condition of anonymity to discuss the sensitive regulatory review, clears the last significant regulatory hurdle before the agency’s biggest policy change in more than 50 years can take effect.

Once OMB signs off, the DEA will take public comment on the plan to move marijuana from its current classification as a Schedule I drug, alongside heroin and LSD. It moves pot to

Schedule III, alongside ketamine and some anabolic steroids, following a recommendation from the federal Health and Human Services Department. After the public comment period and a review by an administrative judge, the agency would eventually publish the final rule.

“Today, the Attorney General circulated a proposal to reclassify marijuana from Schedule I to Schedule III,” Justice Department director of public affairs Xochitl Hinojosa said in a statement. The DEA is a component of the Department of Justice. “Once published by the Federal Register, it will initiate a formal rulemaking process as prescribed by Congress in the Controlled Substances Act.”

“Criminal records for marijuana use and possession have imposed needless barriers to employment, housing, and educational opportunities,” Biden said in December. “Too many lives have been upended because of our failed approach to marijuana. It’s time that we right these wrongs.”

The election year announcement could help Biden, a Democrat, boost flagging support, particularly among younger voters. Biden and a growing number of lawmakers from both major political parties have been pushing for the DEA decision as marijuana has become increasingly decriminalized and accepted, particularly by younger people. A Gallup poll last fall found 70% of adults support legalization, the highest level yet recorded by the polling firm and more than double the roughly 30% who backed it in 2000.

The DEA didn’t respond to repeated requests for comment.

Schedule III drugs are still controlled substances and subject to rules and regulations, and people who traffic in them without permission could still face federal criminal prosecution.

Attorney General Merrick Garland’s signature throws the full weight of the Justice Department behind the move and appears to signal its importance to the Biden administration. It comes after President Joe Biden called for a review of federal marijuana law in October 2022 and moved to pardon thousands of Americans convicted federally of simple possession of the drug. He has also called on governors and local leaders to take similar steps to erase marijuana convictions.

CHANGPENG ZHAO, the founder of Binance, the world’s largest cryptocurrency exchange, enters the Federal Courthouse in Seattle Tuesday, April 30, 2024. Prosecutors are asking a judge on Tuesday to give Zhao a three-year prison term for allowing rampant money laundering on the platform. He pleaded guilty and stepped down as Binance CEO in November as the company agreed to pay $4.3 billion to settle related allegations.

Photo:Ellen M. Banner/AP