Chief executive officer of the Bahamas Financial Services Board (BFSB) Aliya Allen has spoken out against the negative portrayal of offshore financial centres, saying the economic downturn unfairly stigmatized international financial centres (IFCs) such as The Bahamas.

“We are seeing a sustained effort to eradicate tax competition,” she said. “The financial crisis was a big game changer.”

The BFSB director suggested that politicians were using the financial crisis to shore up support by promising to stamp out tax avoidance, saying: “It is a politically positive argument; it holds a lot of sway. So it has become an argument that is emotive and polarising.”

Allen made the remarks at the Nassau Conference, held at the British Colonial Hilton earlier this week, where she participated in a panel discussion debating the global view of financial services.

The first speaker of the panel, Richard Hay, a partner at law firm Strikeman Elliot, pointed out that the 2012 Sharman Report found little evidence that IFCs are used for tax evasion, and that these centres actually boost the global economy by facilitating cross-border trade.

Fellow panelist Prince Rahming, senior partner at PricewaterhouseCoopers, warned that, with the global community demanding ever higher standards of compliance and transparency, The Bahamas would soon be forced to rethink its business model.

“The goal posts continue to move and move towards full transparency. The rapid pace of change is upon us and if we do not react, and react strongly, we might lose business,” he said.

Allen said The Bahamas should play to its strengths and market itself as a highly skilled and specialized centre. “The Bahamas really needs to become a pedaller of expertise,” she said. “We need to sell the fact that we have expertise in a niche field. It is important your clients feel they are getting more from you than they are getting in another jurisdiction.

“We need to be faster and better than the rest. We need to embrace transformational change as a jurisdiction.”

cmorris@dupuch.com