Transparency of the Regulatory System

The Bahamas’ legal and regulatory systems are transparent and consistent with international norms, and the Bahamian government is engaged in making reforms to public accounting procedures to conform to international financial reporting standards.

Proposed legislation is available at the government Publications office and public comment and engagement of stakeholders is encouraged, particularly on legislation perceived as controversial. There is no equivalent to the Federal Register, but the government regularly updates its website (www.bahamas.gov.bs ) to list draft, new, or amended legislation, bills before parliament, bills for consultation, and its legislative agenda. There is regulatory system reform legislation, but it has not been fully implemented. In some instances, there is public consultation on investment proposals, but the process 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.

The Fiscal Responsibility Act (FRA) was passed in 2018 to establish broad parameters related to revenue, expenditure, deficits, and public debt. It also calls for a Fiscal Strategy Report (FSR) which provides a three-year fiscal forecast that sets targets for the preparation of the government’s annual budgets. The 2019 FSR gives a broad explanation about how the government established these targets and the various internal and external fiscal pressures constraining its actions. The government presents the FSR and makes information on public finances and debt obligations available during the budget submissions to parliament. The information is also published on the government’s budget website (www.bahamasbudget.gov.bs ) in simple and non-technical language.

The Central Bank of The Bahamas also provides quarterly updates on debt obligations on its website (www.centralbankbahamas.com ).

International Regulatory Considerations

The Bahamas is not a member of the WTO, so does not notify draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT). As part of its accession negotiations, The Bahamas announced it is reviewing investment policies with the aim of developing comprehensive, WTO-compliant investment legislation. Nevertheless, the government confirmed it was unlikely accession would take place before 2025.

The country is not a member of UNCTAD’s international network of transparent investment procedures, nor is it a member of a regional economic block.

The Bahamas Bureau of Standards and Quality (BBSQ), launched in 2016, serves as the country’s focal point on TBT issues and continues to benefit from EU-funded technical assistance at the national level and through the Caribbean Regional Organization for Standards and Quality (CROSQ) in the development of national standards.

In January 2019, BBSQ appointed a Japanese company as an accredited inspection company for a Pre-shipment Verification of Conformity (PVoC) program for the roadworthiness of used vehicles imported to The Bahamas. All used vehicles arriving in The Bahamas on or after April 1, 2019, from Japan, the United Kingdom, Singapore, and the United Arab Emirates, will require a Certificate of Conformity (COC) to comply with import regulations on arrival in The Bahamas. Vehicles arriving from the United States are not currently required to conform with this requirement, considered a TBT.

Legal System and Judicial Independence

The Bahamian legal system is based on English common law and foreign nationals are afforded full rights in Bahamian legal proceedings. In theory, contracts are legally enforced through the courts; however, there are many cases where local and foreign investors have civil disputes tied up in the court system for many years. Others have lost entire sums ranging from several hundred thousand to several million dollars due to fraud. In these instances, the court system has not been a viable option to recover their investments.

The judiciary is independent and allegations of government interference in the judicial process are rare. The Chief Justice of the Supreme Court; the Attorney General, who serves as the government’s chief legal advisor; the Director of Public Prosecutions, who is responsible for public prosecutions; and the President of the Court of Appeals are appointed by the Governor-General upon recommendation of the Prime Minister in consultation with the leader of Her Majesty’s Loyal Opposition. 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 and also contributes financially to the operations of the Caribbean Court of Justice. The country announced its intention to develop itself as a center for international arbitration, tabling in the House of Assembly an Arbitration (Amendment) Bill, 2018 intended to govern domestic arbitration and an International Commercial Arbitration Bill, 2018 which incorporates key provisions of the Model Law of the United Nations Commission on International Trade Law (UNCITRAL).

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 the local courts and are subject to all Bahamian legal requirements. The judiciary is independent, and judicial process can be slow and less than transparent; however, the current government is taking steps to increase judicial transparency and efficiency and to modernize the justice system, including investments in streamlined court administration and efforts toward a new Supreme Court Complex, a Court Services Bill and new Supreme Court rules.

Laws and Regulations on Foreign Direct Investment

No major laws, regulations, or judicial decisions on foreign direct investment have been passed since the 2018 Investment Climate Statement.

The Embassy is aware that a Foreign Investment Bill has been drafted and continues to monitor any movements towards public discussions on and/or tabling of the bill, which the government purports codifies the existing National Investment Policy into statute, aligns with international best practices, and aims to bring additional transparency, accountability, and predictability to the country’s foreign investment process.

Competition and Anti-Trust Laws

The Utilities Regulation and Competition Authority (URCA) regulates the telecommunications sector and new regulations have expanded the mandate to include the regulation of the energy sector. URCA continues to build technical capacity with the support of the U.S. government. There is no legislation governing competition or anti-trust.

The Embassy is aware that a Competition (Antitrust) Bill has been drafted, reportedly in line with The Bahamas’ CARIFORUM-EU obligations and WTO accession requirements, and tailored to the Bahamian context. Initial public consultations were held in August 2018. The Embassy continues to monitor any movements towards additional public discussions and/or tabling of the bill.

Expropriation and Compensation

Property rights are protected under Article 27 of the Bahamian 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 Emergency Power (COVID-19) Regulations, passed in March 2020 upon declaration of a state of emergency imposed to stem COVID-19 infection, grant the Competent Authority the authorization to requisition any building, ship, aircraft, or article if the Competent Authority is satisfied it is reasonably required for any statutory purpose for the duration of the emergency or any period. At the conclusion of the requisition, the Competent Authority is to make prompt and adequate compensation to the owner or occupier of such building, ship, aircraft, or article. The Regulations are expected to expire, however, upon cancelation of the state of emergency.

Dispute Settlement

ICSID Convention and New York Convention

The Bahamas is a member of both the International Centre for Settlement of Investment Disputes (ICSID) Convention (adopted 1995) and the New York Convention (adopted 1958). The Arbitration Act of 2009 enacted the New York Convention and provides a legal framework. The Bahamas is also a member of the Multilateral Investment Guarantee Agency. This agency insures investors against current transfer restrictions, expropriation, war and civil disturbances, and breach of contract by member countries.

Investor-State Dispute Settlement

Order 66 of the Rules of the Bahamian Supreme Court provides rules for arbitration proceedings. The 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards entered into force for The Bahamas on March 20, 2007. This convention provides for the enforcement of agreements for commercial disputes. Under the convention, courts of a contracting state can enforce such an agreement by referring the parties to arbitration. There are no restrictions on foreign investors negotiating arbitration provisions in private agreements. The government announced its intention to establish The Bahamas as a center for international arbitration cases, and although an alternative dispute resolution institute at the University of The Bahamas is often mentioned, a body has yet to be formally established.

The Bahamas is a signatory to the Economic Partnership Agreement between CARIFORUM and the European Union since October 2008 and the Economic Partnership Agreement between CARIFORUM and the United Kingdom since November 2019. Both agreements include specific dispute settlement provisions and procedures. The country has not yet ratified either of the trade agreements, and provisionally applies both.

Investment disputes in The Bahamas that directly involve the Bahamian government are rare and there is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

The Bahamas is a member of the Multilateral Investment Guarantee Agency, which insures investors against current transfer restrictions, expropriation, war and civil disturbances, and breach of contract by member countries. Local courts enforce and recognize foreign arbitral awards and foreign investors are provided national treatment. Disputes between companies are generally handled in local courts but foreign investors can refer cases to ICSID and in at least one instance, recourse was sought in a U.S. court in a dispute involving a $4 billion resort development. The Embassy is not aware of any cases involving state owned enterprises that resulted in litigation.

Bankruptcy Regulations

Company liquidations, voluntary or involuntary, proceed according to the Companies Act. Liquidations are routinely published in newspapers in accordance with the legislation. Creditors of bankrupt debtors and liquidated companies participate in the distribution of the bankrupt debtor’s or liquidated company’s assets according to 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 Bahamas ranked 152 out of 190 countries with regards to getting credit in the 2020 Ease of Doing Business report, indicating relatively weak credit reporting systems and the ineffectiveness of collateral and bankruptcy laws in facilitating lending. Recognizing the need for credit reforms, the Credit Reporting Act was passed in February 2018, a credit bureau operator was selected in January 2019, and the Central Bank confirmed the intention to operationalize a credit bureau in 2020.