Canadian Banks Set Up Almost 2,000 Offshore Companies In The Bahamas: Records

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Three major Canadian banks set up thousands of offshore companies in one of the world's top tax havens, leaked records show.

RBC, CIBC, and Scotiabank registered 1,960 companies in the Bahamas over the course of 26 years, The Toronto Star reported Wednesday.

RBC was responsible for 847 companies, while CIBC had 632. Scotiabank had 481.

royal bank of canada
Royal Bank of Canada logo. (Photo: Mark Blinch/Reuters)

There is no suggestion that the banks did anything against the law — representatives told the Star that each bank has measures to ensure they're not handling money illegally.

However, the Bahamas have long been the focus of international authorities concerned about whether its anti-money laundering measures comply with those of other countries.

The records — made up of 1.3 million files from the Bahamian corporate registry — were leaked to the International Consortium of Investigative Journalists (ICIJ) and German newspaper Süddeutsche Zeitung.

The documents were then shared with the Star, as well as with CBC/Radio-Canada.

The papers reveal information about almost 175,500 companies, foundations and trusts that were registered in the Bahamas from 1990 to 2016, the ICIJ reported.

The records — which are publicly searchable — contain information such as companies' names, creation dates, addresses, and directors.

And Canadians will recognize at least one name in the Bahamas leak — Finance Minister Bill Morneau.

bill morneau
Finance Minister Bill Morneau. (Photo: Mark Blinch/Reuters)

He appears as managing director of Morneau Shepell (Bahamas) Ltd. — a subsidiary of the human resources company where the minister served as executive chariman before his foray into politics.

bill morneau
Bill Morneau's name appears in the upper right-hand corner. (Photo: ICIJ screengrab)

Morneau's office told the Star that he resigned from the director's position on Oct. 26, 2015, as is required of cabinet ministers. The newspaper was told that his name still shows up in the leaked documents because they are out of date.

Catherine Ronberg, a spokesperson for Morneau Shepell, said the company set up in the Bahamas to help with pension consulting with businesses and governments throughout the Caribbean.

She said the company does not funnel money from its Canadian business through the Bahamas.

scotiabank
Scotiabank logo. (Photo: Chris Wattie/Reuters)

Morneau previously pledged to fight tax evasion following the release of the Panama Papers in April.

His name is far from the only prominent one that shows up in the latest leak.

Hamad bin Jassim bin Jaber al-Thani, a former Qatari prime minister, is named as a director of a company called Trick One Limited.

Neelie Kroes, a Dutch former commissioner with the European Union (EU), also appears in the database. She's named as the director of a company called Mint Holdings Ltd.

Kroes didn't mention that company in mandatory disclosures of her financial interests, according to the CBC.

But, as with Morneau, her office said someone neglected to take her name off company documents, even though Mint Holdings essentially ceased to exist a decade ago.

cibc
A CIBC logo in Ottawa. (Photo: Chris Wattie/Reuters)

Corporations have been known to set up offshore companies in an effort to keep corruption secret, according to former FBI agent Debra LaPrevotte.

"Offshore companies are often used as intermediaries to facilitate money laundering and, frequently, the companies are only used to open bank accounts," the ex-agent told the ICIJ.

"Thus the corporate registry documents, which might identify the beneficial owners, are part of the evidence."

Bahamas once blacklisted

In 2000, the Organization for Economic Co-operation and Development placed the Bahamas on a blacklist that identified countries that helped people dodge taxes, the ICIJ reported.

It was taken off that list nine years later, though it was later added to a second "gray list." That roundup encompasses countries whose standards don't exactly conform with international practices.

Nicholas Shaxson, the author of "Treasure Islands: Tax Havens and the Men Who Stole the World," told the Star that the Bahamas doesn't meet international standards because it doesn't depend on any major countries for business.

"It has more of a developing country flavour about it," he said.

"[The Bahamas] has to look for a niche elsewhere. Its niche has been being more secretive, being more willing to burn a blind eye."

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