The Bahamas is a constitutional multi-party parliamentary democracy
and a member of the Commonwealth of Nations. Queen Elizabeth II is the
nominal head of state and is represented in The Bahamas by an appointed
Governor General. The government is headed by an elected Prime Minister
and Parliament. Since 1992, the government has been controlled by the
centrist Free National Movement (FNM) of Prime Minister Hubert A.
Ingraham and is now serving its second term in office.
The opposition center-left Progressive Liberal Party (PLP) is led by Perry G.
Christie, a close friend and former law partner of Ingraham. Since the
March 1997 general elections, the FNM has held 34 seats in the
40-member House of Assembly, with the other 6 held by the PLP. Under
the constitution, the next general elections must be held by 2002.
Both major political parties have enjoyed good relations with the
business community, and no serious political movement in Bahamian
history has ever advocated the nationalization of foreign property.
There is no Bahamian history of political violence or instability, and
politics tends to follow the British model of combining sometimes
intense rhetoric with courtly manners. The political issues of most
interest to the business community are bank secrecy and openness to
foreign investment. Both political parties favor maintaining the
Bahamian tradition of strict bank secrecy, believing this policy to be
essential to the maintenance of a thriving financial services sector.
The government introduced the Money Laundering (Proceeds of Crime) Act,
1996, which codified many of the due diligence procedures enshrined
within the 1985 Code of Conduct of the Association of International
Banks and Trust Companies in The Bahamas. Along with the Money
Laundering (Proceeds of Crime) Regulations, 1996, the Act reinforced
the Tracing and Forfeiture of Proceeds of Drug Trafficking Act, 1987,
making it a crime to launder the proceeds of any criminal activity.
The Bahamian legal system is derived from British Common Law and
colonial legislation, although American and other models have been used
for some business legislation enacted since independence. The judiciary
is independent, and conducts fair and public trials with the ultimate
right to appeal judicial decisions to the Privy Council in London. A
large legal community, most of whom have received some training in
Great Britain or the Caribbean, is available to assist foreign business
clients. While fair, the Bahamian judicial process tends to be much
slower than the norm in the United States. Although there have been
instances of Bahamian businessmen attempting to take advantage of
delays in the judicial process and their physical proximity to gain
advantages in commercial disputes with foreign firms, there is no
evidence that the Bahamian judiciary has favored local firms over
foreign ones in its final adjudication of disputes. The Bahamian
government began a process of upgrading its court system, in part with
American government aid, in 1993.
Bilateral U.S.-Bahamian relations are excellent. Although The
Bahamas lie along the most direct air route for transport of illegal
substances between South America and the southeastern United States,
Bahamian government cooperation with U.S. law enforcement agencies
under “Operation Bahamas-Turks & Caicos” (OPBAT) has significantly
reduced the level of drug trafficking through The Bahamas. Bilateral
cooperation in narcotics interdiction operations is extremely close. In
1994, the Bahamas strongly supported American efforts to end military
rule in Haiti. A common language, cultural similarities, family and
personal ties dating back to the days of the American Revolution (when
the ancestors of many modern Bahamians first came to the islands from
the southeastern United States), and the enormous number of visitors
every year between the two countries have engendered a level of
familiarity and ease of communication unusual even between neighboring
countries.