By NATARIO McKENZIE
Tribune Business Reporter
Bank of the Bahamas’ (BOB) decision to accept deposits from legalised web shop operators despite the resistance of its counterparts only raises more questions over its governance, the Opposition’s deputy leader said yesterday.
K P Turnquest said: “The fact that the Bank of the Bahamas has agreed to accept these funds while others have not only raises more questions over the management and supervision of this entity.
“It cannot go unnoticed that as the majority shareholder of this bank, the decision must have been heavily influenced by - and in the interest of - the governing side, and we thus can take no particular comfort in that action by Bank of the Bahamas. We must look to the actions of the other independent banks for clues as to the industry stance on the matter.”
Mr Turnquest added: “Commonwealth Bank’s decision not to accept deposits from domestic web shop gaming points out the continuing concern arising from this industry for reputable financial institutions.
“Indeed, even today, as licenses are being contemplated, proof of source of funds seems to have been put aside in an effort to establish a starting point for the industry. This, though, raises some significant issues for these financial institutions, as they have no reasonable basis from which to establish the source of these funds, even if as purported it has all been derived from online gaming, which is only verifiable on a prospective basis with proper oversight from the Gaming Board.’
Mr Turnquest added that it seemed questionable for the Government to suggest legitimising web shop industry funds through “the mere payment of a penalty or fine”, adding: ”There must be more to it than that.
“In this regard, it must be a particularly tight rope for the Government to explain to the Central Bank, OECD and other international agencies how money gained from a previously unregulated environment can be made clean overnight by legislation alone.
“In fact, the public still awaits a formal report from the Attorney General on her trip to the OECD in Paris last year, even though it may now be a moot point.
The requirements surrounding anti-money laundering and proceeds of crime reporting are very strict, and do not provide exceptions for previously unregulated legacy firms and the introduction of money from unverified sources,” the FNM deputy leader added.
“I fully appreciate the current situation, and that having regard to the Government’s decision to fly in the face of the Bahamian public and legalise this activity, the revenue thus earned must be brought into the formal banking sector.
“How that is accomplished without questioning the legitimacy of the jurisdiction and the global Know Your Customer rules and regulations, and the other requirements of a fully compliant financial jurisdiction, is a question for the Government.”
Bank of the Bahamas has confirmed it received “clearance” from its US correspondent bank to accept deposits from a legalised web shop gaming industry, thus clearing a major obstacle to achieving a key Government policy objective.
Paul McWeeney, the BISX-listed institution’s managing director, confirmed in an interview with Tribune Business last week that JP Morgan Chase, one of the world’s largest financial institutions, had given its approval for Bank of the Bahamas to accept web shop industry funds.