Senate recognises OECD’s shifting compliance demands

The Senate on Friday approved amendments to the Companies Act to further ensure businesses operating here are in compliance with the requirements of the Organisation for Economic Cooperation and Development’s (OECD) ‘moving goal posts’.

Three senators, Lisa Cummins, Caswell Franklyn, and Kevin Boyce, all spoke of shifting targets in this latest OECD prerequisite for changes in legislation as the island continues to adapt to escape financial blacklisting.

Noting that Barbados already has legislation governing business compliance, Cummins said “We have to ensure that Barbados is in two instances: one, monitoring their compliance with the existing legislation and two, providing the ability for the relevant agencies to both inspect and designate relevant authorities to do so.”

Speaking on the Companies (Amendment) Bill, 2020, Cummins, the country’s Minister of Tourism and International Transport said these amendments provide “the teeth” for the Compliance Unit of the Corporate Affairs and Intellectual Property Office to be able to inspect, either by on-site inspection or desk inspection and to permit a person to do the inspections and to apply sanctions where the relevant documentation has not been met.

“The proposed amendments will therefore allow for strengthening of the existing mechanisms to ensure that we are compliant,” she told the Upper Chamber.

Illustrating how the island is frequently required to make legislative changes to suit the dictates of international financial bodies, she noted that just two years ago, the Senate spent an entire day, into the night also ensuring that Barbados was in compliance with the requirements of the Financial Action Task Force (FATF) and the OECD to avoid further “de-listing and blacklisting”.

She said that over the years small countries like Barbados and other low-tax jurisdictions, have had on multiple occasions been subjected to the “moving of the goal posts”.

“We’re compliant on one occasion and then we are not compliant in another instance because the goal posts had shifted,” she noted.

While contending that the amendments represent added work for the Corporate Affairs and Intellectual Property Office that is already under-staffed, Senator Franklyn said “I understand what the government is doing because every so often the OECD and everybody else change the goal posts. Barbados is compliant then they find another reason to make us non-compliant because they want the business in Europe and they are less compliant than everybody else.”

Acknowledging that, “Barbados has been trying to survive”, he complimented the administration for its efforts.

“I must say that the government has been doing only what it can because if you fail to jump through those hoops the business wouldn’t come here.”

Citing an OECD document on beneficial ownership of companies, Senator Boyce said according to that organisation, the passage of these amendments is ‘but one step’.

“It is not enough to have a compliant legal framework but that the laws must be effectively implemented and enforced in practice. We are now faced with the obligation, having had the laws passed, that they must be effectively implemented and enforced in practice.”

Boyce said there are enough skilled persons on island to conduct compliance inspection of companies but questioned whether Barbados has the financial resources to support the work in light of the COVID-induced recession.

Referring to shifting goal posts, he noted, “This could all be for nought.

“If we pass the legislation … they [would] say you passed it but you’ve not implemented it.” (GA)