She said amendments to the law will ensure responsibility, and that they be more practical and effective for reasonable business practices in The Bahamas.
The Minister made this statement during the second reading of the Financial Transaction Reporting Amendment Act.
She said with The Bahamas being blacklisted in 2000, the former government rushed financial legislation which was badly drafted and filled with inconsistencies.
The amendment, she said, is in pursuit of “responsibility” and not a major dismantling of the laws, given the reasonable expectations of the international community.
However, she said as the law dictates, it is totally unreasonable to expect the average worker, such as a lunch vendor, to have the same standards applied to them as those intending to thrust millions of dollars into the country.
“While we seek to be responsible, we will be equally irresponsible to ignore the compelling lead to make necessary amendment to the law,” she said.
The former Government should have taken the time to get it right the first time, she said. The solution to the existing problems in the law, said Minister Gibson is to adapt a more realistic approach without undermining the ethical nature of the international financial regime.
Some of the legislation was passed against the advice of advisors she said. Rising on a point of order, Member for North Abaco, former Prime Minister Hubert Ingraham asked which advisors she was referring to. He said if she made such claims, she should substantiate it.
However, Minister Gibson continued with her contribution to the debate.
There are three amendments that will be made to the legislation before the House.
Another proposal is to allow for the removal of the deadline for verification of existing accounts and the corresponding requirement that these be transferred to the Central Bank.
The current section 6 (vi) of the Act will be repealed and immediately after subsection 5 of the principle Act, a new subsection 6 (vi) will be inserted with a straightforward obligation that facilities in existence prior to December 2000 be verified, she said.
Added to this will be the provision that as from April 1, 2004 a financial institution shall discontinue any further activity with the facility until such time as verification has been made.
“This will eliminate the requirement that assets in the facility be transferred to the Central Bank. We know that the industry has been concerned about the transferal of unverified facilities to the Central Bank and this requirement will be eliminated,” she said.
Accounts can easily be identified and as of April, as opposed to transferring them to Central Bank, there will be a discontinuance of any further activity or a freezing of accounts.
The third amendment calls for the insertion of a new Section 8 (a), which will place an obligation on financial institutions to verify identities in any case where there is cause for suspect that the funds involved are the proceeds of crime, or that money laundering is being attempted.
“This amendment will address a strong concern raised by the IMF regarding this omission from the legislation and for which The Bahamas has received a low rating,” she said.
Other changes to the legislation include the increase of prescribed limit for large cash transactions from $10,000 to $15,000.
Also, the mandatory nature of the list contained in regulation 3 subsection 2 will be removed and converted to an “indicative prescription list” of the information type that would normally be required for identification purposes.
“This is an attempt to make it clear to financial institutions that this is the kind of information that you would want to obtain to fulfill your obligations. The institutions will not recognize that there is no mandate that each and every item on the list must be obtained – which has precisely frustrated account holders before, or facility holders before.”
“There will then be the ability for more specific details to be provided in industry specific guidelines which will be provided by each regulator. So the indicativeness will be in the regulations and there will be the ability of the regulators of specific industry to provide further guidelines. For example, the insurance sector may impose its own regulations and likewise the banking sector may impose their own set of regulations,” said Minister Maynard-
By Vanessa Rolle, The Nassau Guardian
