The Bahamas will have to face, sooner or later, pressures from the Financial Action Task Force (FATF) regarding anti-money laundering training activities, former Prime Minister Hubert Ingraham advised the Government.
He further recommended that the Government “move with caution with respect to the introduction of new financial services product, keep a watchful eye on evolving concerns internationally about insurance generally and seek to put us in a position to comply with evolving rules.”
Although The Bahamas is in compliance with all 40 of the FATF recommendations relating to international counter-money laundering activities, Mr. Ingraham argued that two issues remain largely unresolved, which the FATF has not among its membership resolved either.
Unresolved are the benchmark standard with regard to Criteria 5 and 14 of the 40 FATF recommendations which address the requirement for intermediaries, such as lawyers and accountants to divulge the names of the beneficial owner of funds held on account, and to engage in ongoing anti-money laundering training activities.
According to Mr. Ingraham, these two issues were not among those taken into account when The Bahamas was blacklisted by the FATF in June 2000; however, “these issues are still matters of concern with which The Bahamas will sooner or later have to come to terms with.”
Mr. Ingraham as contributing to last week’s Parliamentary debate on an amendment to the Financial Transactions Reporting Act, 2000, to extend the Know Your Customer (KYC) deadline to December 2003.
The House of Assembly passed the Act on December 12, 2000 under the Free National Movement Government. The Act imposed an obligation on all financial institutions to verify the identity of all persons/entities conducting financial transactions including deposits, withdrawals, exchanges, or transfers of funds by cash, cheque, payment order or other instrument; or by electronic or other non-physical means and payments made in satisfactory of any contractual or legal obligation.
Suspicious transactions are required to be reported to the Financial Intelligence Unit (FIU). And, substantial penalties may be imposed for non-reporting of suspicious transactions.
The FTRA is part and parcel of the series of new legislation and regulations enacted two years ago for the enhanced control and supervision of the country’s financial services sector.
“Ongoing efforts to implement and strengthen counter-money laundering process will ensure that The Bahamas is never again found wanton by the Financial Action Task Force and hence not placed on its list of Non-cooperative Countries and Territories (NCCT) as they pursue international initiatives to counter international money laundering and terrorism financing,” Mr. Ingraham said.
He explained that because The Bahamas share a common interest with the concerned multinational agencies in seeing a well regulated and transparent global market for the conduct of international finance and further, because of The Bahamas’ interest in ensuring a level playing field, its administrative and legislative responses have been based on the principle of constructive cooperation involving a wide ranging review of the financial services legislation and practices.
These initiatives not only facilitated the removal of the adverse financial advisory posted by the US Treasury FINCEN in June 2000, the former prime minister said, “but equally as importantly permitted The Bahamas to obtain Qualified Jurisdiction status by the US-Internal Revenue Service (IRS) with regard to the trading in US Securities by Banks operating in and from The Bahamas without which our private banking business would disappear.”
He noted that notwithstanding the de-listing of The Bahamas, the FATF continue to pay attention to The Bahamas’ efforts to impelement its new legislative and regulatory regimes to counter-money laundering.
In particular, The Bahamas is being watched to see”
1 – The level of resources devoted to the newly created instructions such as the Financial Intelligence Unit (FIU) and the Compliance Commission;
2 – The continued practice of cooperating with international judicial authorities.
Mr. Ingraham pointed out that no change has yet been made to any of the financial legislation passed under his watch, though some changes may be necessary, as was foreshadowed by the PLP Government.
He agreed that banks need to know the identity of all persons most especially international clients with bank accounts in The Bahamas.
“Clearly, we are all agreed that The Bahamas should not be used to launder the proceeds of crime – terrorism, fraud, drug-trafficking and the likes,” Mr. Ingraham said. “Clearly, therefore we are at one in our desire to take all reasonable steps to prevent our banking system from being used to facilitate these nefarious activities.”
By Lindsay Thompson, The Nassau Guardian
