The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas has yet to fully satisfy the Caribbean Financial Action Task Force (CFATF) that its anti-money laundering/counter terror financing regime meets the required standard, with this nation remaining on “regular follow up” monitoring.

The Bahamas is currently hosting a two-day CFATF summit in Nassau, but a report obtained by Tribune Business, which has never been publicly revealed before, discloses that further legislative changes by this nation are required to come into compliance with key global anti-money laundering standards.

The CFATF’s sixth ‘follow up’ report on the Bahamas, which was published in late November 2013, says: “It is recommended that the Bahamas remains on regular follow-up and be required to report back to the [CFATF] plenary at the November plenary meeting in 2014.

“However, it is hoped that the Bahamas is able to enact the legislative amendments before that time and reach a full level of compliance so that an application can be made to exit the follow-up process and move to biennial reporting. This would allow the Bahamas the opportunity to focus on its fourth round mutual evaluation, which is currently scheduled for the fourth quarter of 2015.”

The CFATF is the regional affiliate of the Financial Action Task Force (FATF), the body that ‘blacklisted’ the Bahamas in 2000 for allegedly being non co-operative in the fight against money laundering.

Several other Caribbean financial centres received the same treatment, and with the FATF president here in Nassau yesterday, several hit out against the organisation, arguing that it was exceeding its mandate and covertly engaged in an initiative to drive international financial centres (IFCs) out of business.

Still, the CFATF report, which is prepared by the Bahamas’ Caribbean peers, indicates that this nation has a little way to go before it can boast of fully meeting the global ‘core and key’ recommendations on fighting money laundering.

“The Bahamas has drafted several pieces of legislation which will allow them to achieve full compliance with currently outstanding core and key recommendations,” the CFATF report said.

“Based on this review, the Bahamas has a high level of compliance with the core and key recommendations, with 11 achieving a level of full compliance. The remaining outstanding core and key recommendations have relatively high levels of compliance.”

Several of the outstanding issues relate to the Bahamian credit union/cooperative society sector, which is being transferred to the Central Bank of the Bahamas’ supervision. The CFATF report said amendments to the Central Bank Act would permit the sharing of information for credit unions with other Bahamian regulators, and their international counterparts.

“The Code of Practice for Accountants did not satisfy the requirement for the director of societies to include responsibility for ensuring that licensees and registrants comply with the Financial Transactions Reporting Act in order to facilitate enforcement action for non-compliance with anti-money laundering/anti-terror finance requirements,” the CFATF said.

Another outstanding issue identified in the report was the ability of the Director of Societies to compel the production of information to meet a valid international information request. These weaknesses are being addressed via changes to the Central Bank Act and Cooperative Credit Unions Bill.

Other highlights contained in the CFATF report included an increase in suspicious transaction reports (STRs) filed with the Financial Intelligence Unit (FIU), with the 196 submitted to end-August 2013 “surpassing the total number for 2012”.

The report suggested this was the product of increased training by the FIU. “Between November 2012 and August 2013, the FIU trained approximately 875 persons,” the CFATF said.

“These persons comprised employees from seven trust companies, two law firms, one casino, six investment management companies, one insurance company and one bank.”