The Bahamas

3. Legal Regime

The Bahamas’ accounting, legal, and regulatory systems are generally consistent with international norms. The Bahamas has no equivalent to the U.S. Federal Register, but the government regularly updates its website ( www.bahamas.gov.bs ) to list draft legislation, bills before parliament, and its legislative agenda. Proposed legislation is available at the Government Publications Office, and public and private sector engagement is usually encouraged. Public consultation on investment proposals is not required by law. The Embassy is unaware of any informal regulatory processes managed by non-governmental organizations (NGOs) or private sector associations that restrict foreign participation in the economy.

Throughout 2021, the government passed legislation to improve the country’s fiscal governance and enhance transparency and accountability. The Public Debt Management Act (2021) enshrines debt management policies into law and improves central government and state-owned enterprise (SOE) debt transparency. The Public Finance Management Act (2021) expands budgetary and fiscal reporting requirements for central government and SOEs. The Statistics Act (2021) transforms the current Department of Statistics into a quasi-independent National Statistics Institute. The Public Procurement Act (2021) brings transparency and accountability to government tenders and contracts. Only the Statistics Act has been fully implemented. In late 2021, the new administration confirmed its intention to amend these laws, as well as the Fiscal Responsibility Act passed in 2018. The Embassy is not aware of a timeline for the proposed amendments, which skeptics argue could stymie the original intent of enacting an ambitious transparency regime.

Although efforts have been made to meet international best practices, The Bahamas’ supreme audit institution, the Office of the Auditor General, has not published a timely government budget audit report for several years. The last publicly available audit covers fiscal year 2018/2019. The U.S. Global Accountability Office is assisting the Office of the Auditor General to identify ways to fulfill its reporting obligations.

The government made key budget documents publicly available, including the executive budget proposal, enacted budget, and end of fiscal year report. The government also submitted a Supplementary Budget following elections in September 2021. Budget documents include estimates of revenue and expenditure (including estimates from prior years), the budget communication (the budget speech), appropriation bills, tax bills, resolutions, and proposed legislative changes. The government also publicizes information on debt obligations, including that of SOEs, during the annual budget submissions to the Parliament. Budget documents are available at www.bahamas.gov.bs  and www.bahamasbudget.gov.bs .

The Bahamas is not a member of the WTO, so it does not notify the WTO Committee on Technical Barriers to Trade (TBT) of draft technical regulations. As part of WTO accession negotiations relaunched in 2018, The Bahamas announced it is reviewing investment policies with the aim of developing comprehensive, WTO-compliant investment legislation. However, the Embassy is not aware of significant progress in this area in 2021. The Bahamas is not a member of UNCTAD’s international network of transparent investment procedures.

The Bahamas Bureau of Standards and Quality (BBSQ), launched in 2016, governs standards for goods and services, particularly metrology (weights and balances). BBSQ also cooperates with other ministries on quality standards, such as sanitary and phytosanitary standards with the Ministry of Agriculture and Marine Resources and the Bahamas Health and Food Safety Agency (BAHFSA). BBSQ serves as the country’s focal point on trade barrier issues and has received technical support on the development of national standards from the EU and the Caribbean Regional Organization for Standards and Quality (CROSQ). Trade barriers are not a hindrance to trade with the United States, and U.S. products are widely accepted.

The Bahamas legal system is based on English common law and foreign nationals are afforded full rights in legal proceedings. Contracts are legally enforced through the courts, however, there are some instances where civil disputes get tied up in the court system for years. Throughout 2020 and 2021, a U.S. investor and a government utility company were engaged in a civil dispute concerning the termination of a contract, non-payment for services provided, and ownership of equipment and materials. This case was settled in late 2021 with the local courts awarding the U.S. investor full payment and retention of its equipment.

The judiciary is independent, and allegations of government interference in the judicial process are rare. With the recommendation of the Prime Minister, the Governor General appoints the highest-ranking officials in the judicial system, including the Chief Justice of the Supreme Court, the Attorney General, the Director of Public Prosecutions, and the President of the Court of Appeals. The Bahamas is a member of the Commonwealth of Nations and uses the Privy Council Judicial Committee in London as the final court of appeal for civil and criminal matters.

The Bahamas continues to advance efforts to develop its reputation as a center for international arbitration by drafting legislation, namely the International Commercial Arbitration Bill (2021) which updates the Arbitration Act (2009). The Bill governs domestic arbitration and incorporates key provisions of the Model Law of the United Nations Commission on International Trade Law (UNCITRAL). The legislation has not yet passed. In 2020, The Bahamas also established an Alternative Dispute Resolution unit, and developed a two-year strategic plan to promote this method for settling commercial and other types of disputes.

Judgments by British courts and select Commonwealth countries can be registered and enforced in The Bahamas under the Reciprocal Enforcement of Judgments Act. Court judgments from other countries, including those of the United States, must be litigated in local courts and are subject to local legal requirements. The government is taking steps to modernize the justice system and increase judicial transparency and efficiency. Efforts throughout 2021 included implementation of an Integrated Case Management System, a Court Automated Payment System, Digital Court Reporting and Bail Management Systems, the launch of a Digitization Unit, and the expansion of the Bahamas Judicial Education Institute. The Court Services Bill (2020) has not yet been debated or enacted. This law would give the courts more autonomy and control over their administrative, financial, and operational affairs. There has been little movement on the construction of a new Supreme Court complex.

While some public pronouncements have been made on FDI policies, no major laws, regulations, or judicial decisions have been passed since publication of the 2021 Investment Climate Statement. The government has drafted a Foreign Investment Bill purported to codify the existing National Investment Policy, align with international investment best practices, and bring additional transparency, accountability, and predictability to the country’s foreign investment process. The Embassy is not aware of efforts to advance this bill in 2021.

The government committed to establishing Bahamas Invest – a new, autonomous agency to oversee a modern investment regime and fast-track investments. Bahamas Invest remains in the planning stages.

All relevant laws, rules, procedures, and reporting requirements for investors can be found on the website of the Bahamas Investment Authority (BIA) ( www.bahamas.gov.bs/bia ).

The Utilities Regulation and Competition Authority (URCA) regulates and imposes antitrust restrictions in the telecommunications and energy sectors. However, there is no legislation governing competition or anti-trust. A Competition (antitrust) Bill was drafted in 2018 in line with The Bahamas’ CARIFORUM-EU obligations and WTO accession requirements. Initial public consultations were held in August 2018. The Embassy is not aware of efforts to advance the Bill in 2021.

Property rights are protected under Article 27 of the country’s constitution, which prohibits the deprivation of property without prompt and adequate compensation. There have been compulsory acquisitions of property for public use, but in all instances, there was satisfactory compensation at fair market value.

The March 2020 Emergency Power (COVID-19) Regulations granted the government authorization to requisition any building, ship, aircraft, or article if it is reasonably required for any statutory purpose for the duration of the emergency. At the conclusion of the requisition, the government was to make prompt and adequate compensation to the owner. The Embassy is not aware of any instance in 2021 where the government invoked this law. The Emergency Power Regulations expired with the cancelation of the state of emergency in October 2021.

Company liquidations, voluntary or involuntary, proceed according to the Companies Act. Liquidations are routinely published in newspapers in accordance with legislation. Creditors of bankrupt debtors and liquidated companies participate in the distribution of the bankrupt debtor’s or liquidated company’s assets according to the statute. U.S. investors should be aware that there is no equivalent to Chapter 11 bankruptcy law provisions to protect assets located in The Bahamas.

The Credit Reporting Act was passed in February 2018 to improve credit reporting systems and better assess borrowers’ risk. The Central Bank confirmed Italian-based CRIF S.P.A. launched The Bahamas’ first credit bureau in April 2021, but it is not yet fully functional. Bahamian commercial banks and personal lenders will be required to share their clients’ credit history with CRIF. CRIF will provide lenders access to credit reports. The Central Bank identified 45 entities as credit information providers as of October 2021.

9. Corruption

The government’s laws to combat corruption by public officials have been inconsistently applied. The law provides criminal penalties for corruption, and the government generally implemented the law effectively when applied. However, there was limited enforcement of conflicts of interest related to government contracts and isolated reports of officials engaging in corrupt practices, including accepting small-scale “bribes of convenience.” The political system is plagued by reports of corruption, including allegations directing contracts to political supporters and providing favorable treatment to wealthy or politically connected individuals. In The Bahamas, bribery of a government official is a criminal act carrying a fine of up to $10,000, a prison term of up to four years, or both.

The current administration has accused the former administration of inappropriate spending and misappropriation of millions of dollars, particularly during the state of emergency issued due to the COVID-19 pandemic. The Emergency Power (COVID-19) Regulations, passed in March 2020, granted widespread powers to the government during the state of the emergency. For example, the legislation allowed the government to bypass normal spending rules and procurement processes, although it did require the government to present Parliament with reports of contracts and pandemic-related funding within six weeks of the expiration of the state of emergency. Despite the state of emergency expiring and being extended several times throughout 2020 and 2021, the former administration failed to report. The Emergency Power Regulations expired for the final time without extension in October 2021.

The new administration has called into question several contracts awarded to companies and individuals by the former administration under the Emergency Power Regulations and has ordered forensic audits of government ministries and agencies. Initial findings suggest significant misappropriation of funds. The former administration admitted it failed to report but denies allegations of corruption. The new administration also accused the former administration of $821 million in undisclosed liabilities and unfunded obligations identified in the former administration’s pre-election report. The former administration denies these allegations, explaining the reporting irregularities were due to differences in accounting methodologies.

As of April 2022, no criminal charges have been filed against members of the former government for these corruption allegations. The current government pledged any decision to prosecute would be supported by independently collected and verified evidence.

The Public Disclosure Act requires senior public officials, including senators and members of Parliament, to declare their assets, income, and liabilities annually. For the 2021 deadline, the government gave extensions to all who were late to comply. The government did not publish a summary of the individual declarations, and there was no independent verification of the information submitted. The campaign finance system remains largely unregulated with few safeguards against quid pro quo donations, creating a vulnerability to corruption and foreign influence.

In September 2021, the government enacted the Public Procurement Act (2021), which overhauls the administration of government contracts to improve transparency and accountability. Senior government officials have called for the legislation to be amended to reflect government capabilities and strengthened with new regulations. Though functional, most agencies with large procurement budgets do not utilize the existing e-procurement portal or registry. Senior Officials purport that the existing e-procurement portal requires modernization to improve functionality.

According to Transparency International’s 2021 Corruption Perceptions Index, The Bahamas ranked 30 out of 180 countries with a score of 64 out of 100. There are no specific protections for NGOs involved in investigating corruption. U.S firms have identified corruption as an obstacle to FDI and have reported perceived corruption in government procurement and in the FDI approvals process.

The government does not, as a matter of government policy, encourage or facilitate illicit drug production or distribution, nor is it involved in laundering the proceeds of the sale of illicit drugs.  No charges of drug-related corruption were filed against government officials in 2021.

The Bahamas ratified major international corruption instruments, including the Inter-American Convention against Corruption in 2000, and has been a party to the Mechanism for Follow-Up on the Implementation of the Inter-American Convention against Corruption (MESICIC) since 2001. The Bahamas is not party to the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.

Government agency or agencies responsible for combating corruption:

Royal Bahamas Police Force
Anti- Corruption Unit
P.O. Box N-458
(242) 322-4444
Email: info@rbpf.bs 

Watchdog organizations:

Citizens for a Better Bahamas
Transparency International (Bahamas Chapter)
(242) 322-4195
Website: www.abetterbahamas.org 
Email: info@abetterbahamas.org 

Organization for Responsible Governance (ORG)
Bay Street Business Center, Bethell Estates
East Bay Street (at Deveaux St.)
Website: www.orgbahamas.com 
Phone: 1-242-828-4459
Email:  info@orgbahamas.com 

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