Published On: Thu, Apr 7th, 2016

Transparency International branch president linked to Bahamas companies

Gonzalo-DelaveauNASSAU - The fallout from the so-called “Panama Papers” leak continued on Tuesday. The latest casualty with a connection to The Bahamas was the president of the Chilean branch of Transparency International, who resigned on Monday after documents showed he was linked to at least five offshore companies domiciled in The Bahamas.

Gonzalo Delaveau was among tens of thousands of people named in a leak of four decades' worth of documents from Mossack Fonseca -- a Panamanian law firm specializing in offshore financial services, with a branch in The Bahamas -- and while Delaveau is not accused of illegal activity, the leaks called into question his post at Transparency International, a German-based organization that seeks to monitor and root out corporate and political corruption worldwide.

Delaveau, a lawyer, acts as a representative for Turnbrook Corporation, DK Corporation, Heatlhey International Inc., Turnbrook Mining Ltd. and Vizcachitas Ltd, all of which are domiciled in The Bahamas. He also reportedly serves as a director for Turnbrook Mining, which owns 51.6 percent of Los Andes Copper, a Canadian exploration and development company currently focused on a mine project north of Chile's capital, Santiago.

Delaveau could not be reached for comment.

Meanwhile, shadow finance minister and Free National Movement deputy leader Peter Turnquest said the leak and the damage it may do to The Bahamas’ reputation “points out the very serious and damaging potential consequences” of the reading of private emails in Parliament.

Turnquest told Guardian Business the idea that government ministers were “in possession of private banking details of citizens and international clients of professional firms” -- as claimed in the House of Assembly recently -- is “even more worrisome and potentially damaging”.

So much so, in fact, that Turnquest said it must now be clear to minister of financial services Hope Strachan why she was urged to “to counsel her fellow ministerial colleagues on their loose talk and actions concerning this sensitive industry”.

So far, The Bahamas has featured in the story on the international arena prominently: In addition to Delaveau, there is the revelation that UK Prime Minister David Cameron’s father used companies in The Bahamas years ago allegedly to avoid taxation in the UK. However, it appears that the main exposure of The Bahamas is that nearly 16,000 Mossack Fonseca companies were incorporated there. When the complete trove of information is made public in May, the extent of the leak will be made clear.

Turnquest also addressed the vulnerability of The Bahamas as an offshore financial centre. Citing the Organization for Economic Cooperation and Development (OECD) blacklisting in 2001 -- which he dubbed “a traumatic experience” -- Turnquest said the then FNM government “responded positively with a suite of legislation designed to counter perceived compliance weaknesses in the jurisdiction”.

“In the face of tremendous criticism from the then opposition PLP, those bold -- and yes, intrusive -- initiatives effectively saved the industry. The PLP promised to roll back those acts but of course that never happened,” he said.

Turnquest said continued compliance pressures and shifting goal posts from developed states has resulted in further tightening of internal regulations and scrutiny of financial accounts and transactions, culminating in the US Foreign Account Tax Compliance Act (FATCA) legislation passed last year. All of these attacks on the country’s second economic pillar, he said, have weakened the industry and made it vulnerable.

“As a jurisdiction, it is my belief that The Bahamas remains a well run and compliant jurisdiction. These leaks, however, point out how very important it is for all intermediaries to be vetted to ensure that the same strict standards practiced within the jurisdiction are maintained by those introducing business to The Bahamas.

“While this report does not point out any wrongdoing by local financial institutions, it points out the vulnerability of the jurisdiction to be used unwittingly as safe harbour for illegally gained proceeds. It should also heighten our vigilance for the consistent application of international best practices necessary to ensure compliance standards and data security is maintained at all levels,” Turnquest said.

Source: Nassau Guardian

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