By NATARIO McKENZIE
Tribune Business Reporter
The Central Bank has sponsored interactions between the Gaming Board and commercial bank compliance officers to highlight the level of anti-money laundering monitoring and controls that exist in web shops, its governor says.
John Rolle told Tribune Business: “Our focus is more on getting the banks to look at the due diligence process around the clients they provide services to.
“We have also sponsored interactions between gaming industry regulators and the compliance community in the commercial banks to encourage conversations, so people could understand the sort of monitoring and controls that exist around those operations. Those are the sort of things that will feed into how financial institutions make decisions on who they provide services to.”
Mr Rolle acknowledged, though, that the Central Bank cannot give directives on the businesses that banks should conduct business with -effectively admitting it cannot force the banks to take on web shops as clients
The Canadian-owned banks have argued that their worldwide policies prevent them from accepting gaming-related deposits, especially the online variety.
CIBC FirstCaribbean, Royal Bank of Canada (RBC) and Scotiabank are all adopting this stance, with an RBC (Bahamas) position paper warning that conducting business with web shops would run afoul of its parent bank’s global policies and US federal law.
Two Bahamian-owned institutions, Commonwealth Bank and Fidelity Bank (Bahamas), are also refusing to deal with the web shop gaming industry, viewing it as too ‘high risk’.
Such fears will have been heightened in an environment where Bahamian institutions, and their counterparts in the Caribbean, are struggling to maintain correspondent relations with developed country banks due to risk-related concerns. Accepting web shop deposits could be just the excuse a correspondent needs to terminate business.
Bank of the Bahamas is the only institution to state publicly that it is doing business with web shops, having received clearance from its own US correspondent bank, JP Morgan Chase, to accept deposits from the newly-legalised sector.
Mr Rolle said of web shop gaming: “The activities are legal. What is important is that you continue to strengthen the supervision of the operation. They have very automated monitoring for the customer transactions, and that is important generally as far as the way the Bahamas approaches money laundering and trying to separate criminal from non-criminal transactions.
“These operations are subject to that same level of monitoring. Those operations, from what I have been told, are supposed to allow regulators that kind of view of their operations. From our perspective, what’s also important is understanding how we can see those activities become more seamlessly integrated in the rest of the economy so that they do not attract unwanted attention or criticism.”