The Bahamas government says it has concluded negotiations with Monaco for a tax information exchange agreement (TIEA).

Junior Finance Minister Zhivargo Laing and Ambassador of the Principality of Monaco, Gilles Noghès, signed the agreement over the weekend, according to a government statement.

Laing said both countries have also agreed to continue dialogue towards further cooperation by negotiating a double-taxation agreement.

Laing said the TIEA with Monaco is the first of many similar agreements the government expects to sign in the weeks ahead, having made substantial progress in negotiations with several members of the Organisation for Economic Cooperation and Development (OECD) and G-20 countries.

"These negotiations are part of the effort made by the government of The Bahamas to meet its commitment to implement the standards for transparency and information exchange in tax matters that were developed by the OECD," Laing said, noting that the United Nations also adopted the standards and are supported by the declarations of the G-20 Group of Nations.

Will meet commitments

"The government is confident that this agreement with Monaco and other pending agreements will allow The Bahamas to meet its commitment within the near future," he said.

The TIEA signed with Monaco is the second to be completed by the Bahamian government. The first was with the United States in 2002.

Ambassador Noghès said this is only the beginning of cooperation between the two countries and within the coming months a larger agreement between Monaco and The Bahamas will be signed.

The OECD created the Agreement on Exchange of Information on Tax Matters to address harmful tax practices.

A 2008 OECD report titled, "Harmful Tax Competition: An Emerging Global Issue", identified "the lack of effective exchange of information" as one of the key criteria in determining harmful tax practices.

It mandated a working group to develop a legal instrument that could be used to establish effective exchange of information.

The agreement represents the standard of effective exchange of information for the purposes of the OECD's initiative on harmful tax practices.