By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian accountants are being forced "to grapple with" global rules turning them into client 'policemen' and whistleblowers, the Institute's president said yesterday.

Gowon Bowe, the Bahamas Institute of Chartered Accountants (BICA) head, told Tribune Business that recent concerns expressed by Sir Ronald Sanders, Antigua and Barbuda's ambassador to the US, were "very relevant" to the profession in this nation.

Sir Ronald, in a Friday address to the Institute of Chartered Accountants of the Caribbean (ICAC) conference, warned that continued impositions by the Financial Action Task Force (FATF) and Organisation for Economic Co-Operation and Development (OECD) were forcing accountants to become 'policemen' for client activities.

"Accountants, tax advisers, auditors, estate planners are now expected to be 'whistle blowers' on your own clients, and to establish unprecedented machinery to guard against charges of facilitating money laundering, tax evasion and the financing of terrorism," Sir Ronald said.

"These requirements have serious implications for how some of your businesses will survive. For to survive within the rules, which are being imposed by the two bodies set-up and controlled by the industrialised nations, will be costly and risky."

Sir Ronald focused on the FATF's 'high level principles and procedures for accountants', which turn the profession into 'gatekeepers' with an obligation to report on clients they suspect of involvement in financial crimes.

He warned that the costs, risk and time involved in complying with these rules could force individual accountants and small firms out of business, while SME (small and medium-sized enterprise) clients may be unable to afford the increased fee charged by the profession.

Mr Bowe, who was present at the ICAC conference, said the issues identified by Sir Ronald are among those BICA and its members "have to grapple with".

"The matter he was drawing attention to was really the golden rule: He who has the gold makes the rule," Mr Bowe told Tribune Business. "He was highlighting that we're living in this global arena, but players like the UK and US have the bulk of the transactions and the activity, and the fees.

"They have created this concept of 'one size fits all' that has the effect of levelling the playing field, but discriminates against smaller territories.

"When you look at what's being required of the accounting profession, the rules have made it an interesting scenario where they've made us whistleblowers."

Mr Bowe said a Bahamian example of this was the Central Bank of the Bahamas' guidelines for external auditors of its bank and trust company licensees.

"Auditors are required to report to the Central Bank when we're having challenges with the client," he explained. "That is a significant challenge for the audit profession, as we are engaged by the client.

"Our duty of care is to the shareholders and Board of Directors, but the regulators have super-imposed requirements that certain matters get reported to them."

Emphasising that regulators were "not the ones paying our fees", Mr Bowe said global 'standard setters' such as the FATF and OECD were making Bahamian accountants "policemen when selling services to your client".

He added that clients wanted auditors to act as their 'policemen' and "advise how to stay out of trouble", rather than be running to the authorities first. "We have a balancing act; to maintain objectivity to our clients, but not be the tattle taler," he added.

"What we are grappling with as an Institute in the Caribbean, the Bahamas, are global rules that are 'one size fits all'," Mr Bowe told Tribune Business.

"We have to work alongside the regulators to ensure the rules are practicable in our environment. It's not that they are different, but how do you apply them?"

Mr Bowe said BICA and its members were already doing this with the Central Bank over its external audit guidelines, especially when it came to disclosing challenges and to who - client or regulator - first.

He added that BICA was also maintaining strong links with the ICAC and International Federation of Accountants (IFAC) to ensure it remained abreast of international regulatory developments and could respond accordingly.

"We have to be participants in feeding back our challenges," Mr Bowe told Tribune Business. "We cannot sit on our laurels and allow the rest of the world to dictate to us.

"We have to be brave to show what the inequities are, show the challenges with compliance and regulation, and not be subjected to colonialism by the G-20 setting down sets of rules that will ultimately destroy us."

Mr Bowe said BICA had also moved to strengthen the accounting profession's self-regulation via the introduction of peer monitoring and reviews, plus an enhanced disciplinary and reporting process.

Sir Ronald argued on Friday that the global rules impacting accountants were the latest stage in efforts to blunt the competitiveness of international financial centres (IFCs) such as the Bahamas.

He reiterated that US states, such as Delaware, Nevada and Wyoming, had maintained their status as 'secrecy' jurisdictions without any sanction by the FATF or OECD, in contrast to the 'blacklistings' imposed or threatened against the Bahamas and others.

Sir Ronald also emphasised that the world's two largest IFCs were New York and London, yet the regulations governing both were far less stringent than those Caribbean nations have been forced to introduce.