Overseeing new financial services industry laws have cost the Bahamas some $35 million dollars, with huge amounts still being spent on various regulatory bodies, a group of lawyers was told on Monday.
And with most of the region being similarly affected, Attorney General and Chairman of the Caribbean Financial Action Task Force, Alfred Sears, said, the organisation is calling for a United Nations Convention on Money Laundering, to ensure that fair practices apply to all member countries.
The organisation is also putting pressure on the Financial Action Task Force (FATF) to host a global forum under the auspices of the UN to seek broad agreement on the matter, Mr. Sears advised.
He disclosed the initiative at the opening of a Workshop For Central Bank Lawyers on Prevention of Money Laundering and Terrorist Financing: Legal and International Aspects held at the Wyndham Nassau Resort and Crystal Palace Casino.
The workshop runs from June 9-13.
At a special meeting of the Ministerial Council of the CFATF held in Barbados in January, Mr. Sears was given a mandate to promote the convening of the global forum, which would allow UN member countries to participate in the prescribing or the creation of a global anti-money laundering standard, and the fair and equitable application and enforcement of such standards to all nations.
There is an uneven application of regulatory standards in FATF countries and non-FATF countries, Mr. Sears said, which remains a primary concern in the Caribbean.
The Bahamas’ Financial Services Sector has been buffeted as a result of stringent new regulations imposed by the FATF, he said, but the process has not been fair as the pressure applied to some jurisdictions has not been as forceful as it has been to others.
“Some members of the CFATF, under the direction of the NCCT Initiative (non-cooperative countries and territories), have abolished or immobilized bearer shares, nominee directors, and numbered bank accounts and have regulated the gatekeepers such as lawyers, accountants, stockbrokers and real estate agents,” he said.
“However, in FATF member countries, bearer shares, nominee directors, and numbered accounts are allowed and the bureaux de change and gatekeepers such as lawyers, accountants, stock brokers and real estate agents are not regulated,” Mr. Sears said.
A considerable amount of resources have been spent by member countries of the CFATF to reform their financial services industries, he pointed out, with The Bahamas spending some $35 million to ensure the efficient operation of the new financial regime. And, he continued, considerable amounts are still being expended on the Compliance Commission, the Inspector of Financial and Corporate Service Providers, the Inspector of Banks and Trust Companies, the International Legal Cooperation Unit in the Office of the Attorney General and the Financial Intelligence Unit.
Other member countries have also incurred increased costs, coupled with loss of legitimate business in complying with the demands of the FATF to bring their financial services sector in compliance with international standards and practices, he said.
According to Mr. Sears, who holds the twin portfolio of Minister of Education: “The economic downturn across the region, the decimation of the offshore banking sector in some jurisdictions is causing governments’ revenue to dwindle, and therefore the ability of regional governments to support the new anti-money laundering and combating the financing of terrorism regimes may be placed in jeopardy since public sector and private sector officials can be easily suborned by the blandishments of the wealth, power and influence of the criminal gangs. This would make the work of the CFATF more difficult.”
To try and bring some measure of relief, he said, the CFATF is seeking technical assistance and training with international donors; and the Secretariat is currently engaged in discussions with the International Monetary Fund/World Bank, the Caribbean Development Bank, the Inter-American Development Bank, Cariforum and the European Union.
“Additionally, the CFATF Secretariat is being reorganized to ensure that the countries of the Caribbean Basin region benefit from the efficient and effective operation of one strong, transparent, viable and well-respected regional institution on anti-money laundering and combating the financing of terrorism issues,” he said.
Workshops have been scheduled to update CFATF and FATF members on developments as they relate to their synchronous goal of preventing money laundering and the financing of terrorism in this region, Mr. Sears concluded.
During the last months of his chairmanship, he said, he intends to focus on public education and the education of the regional press, which is imperative if all potential stakeholders are to have a fair and equal stance in the fight against money laundering and terrorism.
“The intense scrutiny of the past four years brought with it considerable difficulties,” Mr. Sears told workshop participants.
“However,” he said, “the Caribbean Basin Region should now stand confident of its achievement and the strong robust nature of the regional anti-money laundering infrastructure which offers good examples of best practices for the rest of the world.”
By Vanessa C. Rolle, The Nassau Guardian
