The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Royal Bahamas Police Force (RBPF) "lacks the capacity to effectively pursue" money laundering offenders due to inadequate skills, training and resources.

The Caribbean Financial Action Task Force (CFATF), in its July 2017 assessment of the Bahamas' anti-money laundering and counter terror financing regime, said there had been no money laundering convictions in the four years prior, and just one case was before the courts.

It described this as "inadequate", given the Bahamian financial services industry's size, and suggested it reflected both the RBPF's inability to properly investigate complex financial crimes and the policy set out by the Attorney General's Office and director of public prosecutions.

The CFATF said the director of public prosecutions had ordered that focus be placed on 'predicate', or underlying offences, rather than the alleged money laundering itself. It also viewed the Proceeds of Crime Act, and the seizure of assets, as a "greater deterrent" than money laundering prosecutions by themselves.

"The law enforcement authority (RBPF) lacks the capacity to effectively pursue money laundering," the CFATF's just-released July 2017 report said.

"The law enforcement authority does not have on its staff roster any specialised human resources, any financial analyst, accountant, forensic accountant, attorney or certified financial investigators to properly analyse and investigate intelligence reports.

"This makes it extremely difficult to identify and investigate money laundering promptly and effectively. The authorities have indicated that these skill sets are sourced when required and legal advice is obtained from the office of the director of public prosecutions.

"While the [RBPF] indicated that they recognised that training was critical and important, they also openly admitted that there had been a lull in training at the department. The Bahamas has not displayed characteristics of an effective system."

The CFATF report said the two RBPF units responsible for dealing with money laundering were the Business and Technology Crime Squad (BTCS), and the Tracing and Forfeiture Money Laundering Squad.

While between them they have 13 officers, the report said there had been no money laundering convictions in the Bahamas during the four years prior to the assessment.

While one conviction was obtained subsequent to the report through a fraud case, the CFATF added: "Significant weaknesses in effectiveness are in the areas of ML/TF (money laundering/terror financing) confiscations, investigations, prosecutions and convictions....

"Two of the officers have some limited exposure to financial crime investigations. Additionally, there are also legislative and institutional challenges which collectively contribute to what can be considered an extremely low degree of effectiveness."

While RBPF personnel said they understood the risks and implications of money laundering for the Bahamas, the CFATF report said: "This was not manifested in investigations and prosecutions for money laundering. Focus is placed on the predicate crimes such as drug trafficking and fraud, which are considered the highest risk rather than money laundering."

Among the issues that "negated pursuing" money laundering offenders, the report found, were inadequate staffing and training within the RBPF; the fact it took three-five years to adjudicate criminal matters in the Bahamian courts; a heavy police workload; and the laundering of criminal proceeds outside the Bahamas.

"No effort is made to pursue money laundering in instances where fraud matters are terminated when the accused opts to pay the victim," the CFATF report added.

"Parallel money laundering investigations were not considered before, as the focus is on prosecution of the predicate offences only. However, parallel investigations are now being conducted by the BTCS as part of a new police initiative to combat money laundering.

"This clearly is a step in the right direction, as the BTCS is the authority that presently has the only money laundering case before the courts of the Bahamas."

The CFATF report said the Bahamas has 10 specialised prosecutors to deal with financial crime, but the director of public prosecutions preferred to use the Proceeds of Crime Act and asset forfeiture as the key weapon in combating financing crime.

"The authorities are of the view that the Proceeds of Crime Act provides a tool for the [RBPF] to obtain the proceeds of crime, and it was more prudent to proceed with forfeiture than to charge for money laundering," the CFATF report said.

"The view seems premised on the assumption that forfeiture and confiscation is a far greater deterrent than prosecution of money laundering.... The policy to focus on investigating predicate offences rather than money laundering has resulted in only one money laundering case being presently before the court. This case resulted from a major fraud offence.

"Given that The Bahamas is a substantial offshore financial centre with a large number of international business companies, this is inadequate."

The CFATF report said the RBPF's BTCS unit received in 2014 a total of 379 fraud-related complaints from victims who reported total losses of $5.1 million.

Some 45 per cent of this sum, which amounted to $2.2 million, was related to fraud - a decrease from 2013, when 56 per cent or $4.5 million related to fraud.

"Despite the significant amount related to fraud, the [RBPF] advised that approximately 60 per cent of this sum relates to fraud committed by foreign perpetrators and the proceeds laundered to other jurisdictions," the CFATF report said.

"According to the [RBPF] measures were taken to trace and seize proceeds laundered to other jurisdictions through Interpol. During the period under review, the BTCS has had numerous successes in apprehending and charging criminal offenders with domestic cases of fraud.

"For the period 2011-2013, 508 domestic criminal matters were prosecuted. However, 176 were discharged due to non-appearance of complainants; 50 were withdrawn by complainants who were compensated by the accused; 139 are pending outcome of trial; 112 matters resulted in convictions, where the convicted was fined and ordered to pay restitution."