The existing Financial Transaction Reporting Act (FTRA) and the Financial Transaction Reporting Regulations (FTRR) as they currently exist are excessive and not conducive to non-banking financial institutions, the legal advisor to the Ministry of Finance said on Monday.
In a presentation to members of parliament and senators at the British Colonial Hilton, Rowena Bethel noted that the existing verification procedures under the FTRR required extensive lists of information, which was mandatory to satisfy the verification obligation in the Act for individuals, companies and unincorporated associations.
This verifications procedure was far in excess of the international benchmark and “immensely frustrating for industry and regulators to implement,” Ms Bethel said.
The most important aspect of the existing FTRA regulation was that it was in desperate need of adjustment was the existing deadline for compliance with verification of existing facilities of Dec. 31, 2003, which if left unchanged would leave a number financial institution in a situation of non-compliance with the statutes.
The deadline has been extended to April 1, 2004 with the recommendation that activities on any existing account as of Jan. 1, 2001 that remain unverified after this time be suspended until the verification process is completed.
To alleviate a major problem of many financial institutions of numerous accounts with small balances that have proven difficult to gather information on, an exception for documentary evidence is being granted for Bahamian dollar facilities under $15,000. The financial institution in these cases can conduct verification in these cases at their discretion.
Another aspect of the amendment proposal is to increase the threshold for large cash transactions form $10,000 to $15,000 and the obligation to verify cases of suspicion irrespective of the amounts involved.
The amendment also proposes removing the mandatory nature of the lists currently contained in the regulations and instead leaves it up to individual regulators to apply guidelines for its specific industry. “Each industry regulator would then under guidelines or regulations specify what industry specific requirements it deems appropriate for “Know Your Customer” guidelines of its constituents,” Ms Bethel explained, adding that this format is consistent with the current practices of British Overseas Territories.
Another aspect of the proposal is the launching of a more comprehensive action plan to thoroughly overhaul and reconcile the 11 pieces of laws is planned for 2004.
By Martella Matthews, The Nassau Guardian
