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Bahamas To Send Message: Banks 'Cannot Launder Cash'

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Central Bank wants to tell the world that the Bahamas' international banking sector "cannot launder cash", with virtually all institutions having ceased taking such deposits.

The regulator, unveiling the results of an anti-money laundering/counter terror financing survey that drew responses from 80 licensees, said the sector's non-acceptance of cash was an "important signal" of how seriously the Bahamas and its institutions take their regulatory obligations.

"Only six of 72 international SFIs (supervised financial institutions) reported accepting cash deposits," the regulator said of the survey findings. "Upon follow-up, the Central Bank discovered that four of the six had already ceased taking cash deposits, and the other two were reconsidering their position.

"The Central Bank intends to take additional steps to clarify that the Bahamian international banking and trust sectors do not accept cash. This is perhaps an obvious but important signal that this sector not only does not launder cash, it cannot launder cash."

Such a message assumes additional importance ahead of the Bahamas' June assessment by the Financial Action Task Force (FATF), the global standard-setting body on anti-financial crime measures.

The FATF will be assessing whether the Bahamas has satisfactorily addressed the deficiencies in its anti-money laundering/counter terror financing (AML/CFT) regime that were identified last year by its sister body, the Caribbean Financial Action Task Force (CFATF).

Elsewhere, the Central Bank said the survey showed the impact of recent international regulatory initiatives on the financial services industry's client base, with portfolios increasingly featuring Latin American customers amid a "substantial decline" in tax avoidance business.

"Generally, the results indicate that the international sector's historic focus upon European clients is shifting to a focus upon North and Latin American and other regional clients," the Central Bank said.

"This reflects the substantial decline of the Bahamas as a jurisdiction for tax avoidance, and its growing importance as a preferred western hemisphere centre for private wealth preservation. A substantial Swiss and British base of business, however, has remained with the Bahamas, on a tax-compliant basis.

"It is clear that, by and large, Bahamian international banking and trust clients are not conducting their main operating accounts in the Bahamas. Instead, they are using this jurisdiction as a repository of wealth."

The Central Bank, meanwhile, said the survey showed that "at least a minority of the industry needs to improve its performance" when assessing whether their institution's policies and procedures comply with Bahamian anti-financial crime laws and regulations.

"This is a point of clarity to be communicated to SFIs. SFIs cannot rely solely or primarily upon regulators for such assessments," the Central Bank added: "The Central Bank intends to look more closely at the quality and depth of board reviews on AML/CFT risk.

"We consider that a quarterly board review is reasonable in many cases. The Central Bank will expect to see evidence, however, that in addition to regular reviews, Boards are conducting at least an annual, in-depth review of their SFI's AML/CFT risks, controls and realized outcomes."

The Central Bank survey found that licensees deemed almost 15 per cent of their accounts to be 'high risk', while the figure for the domestic commercial banking industry is just 1 per cent. Around 2.9 per cent of international financial institution accounts were related to politically exposed persons or PEPS, meaning persons who are either government ministers, senior civil servants and their friends and families.

In total, across the domestic and international banking sectors, some 12,392 accounts containing a collective $67.032 million were flagged by institutions as 'high risk'. This compares to 472,756 non-risky accounts containing $111.147 million, although the latter figure does not include a dollar value for the domestic commercial banks.

Comments

Economist 11 months ago

What Mr. Rolle is saying is that he, and the Central Bank, are incapable of policing the banks so they have stopped all cash transactions.

The effect has been that if Daddy wants to put $500.00 cash on his adult sons account, that day, he can't.

The bank says that the money has to be wire transferred. And, if you don't have the account is set up, internally in the bank (don't think that the statement has the way that it has been set up, because it does not) then you can't transfer the money.

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bogart 11 months ago

'The regulator Bahsmas Central Bank) unveiling the results of an anti-moneylaundering/ counter terror financing survey that drew responses from 80 licensees..'....... Well arent there some 250 banks??? How were these questions phrased? Are there any assocoations ties between these banks and other entities?? Always the wiifm question?.. Well frankly ifthe Bahamian authority were to do a survey on 80 prisoners in FoxHill prison I am certain they would all give favourable responses. Given a number of questions that can be raised on the regulator itself etc. the full survey and questions must be published!!

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bogart 11 months ago

Some different agency should be set up to monitor these banks. The regulator who monitors them for these same areas of concern is doing the survey. Many and possibly all these banks certainly run to the fullest law abiding standards but some independent agency shoild be doing the survey. Already with many concerns lf money laundering in local banks, the employee of CoB laindering some 600k, the BPL banker alleged incident, the local banker on contract allegedly placing some 61,000 in different accounts, the other main street banker allegedly suing his employer over some issue etc. A Financial Conduct Authority similar to the UK is also needed for the Bahamas where there is some recource for customers who have problems with banks and challengong bankscwho have best lawyers.

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Socrates 11 months ago

well i dont know if its just cash. i took money (bank check) frm one of my bank accounts to put in a different bank here where i have an account, and despite already proving to 1st bank where the money came from, and despite having a bank check from that bank to deposit in my next bank, guess what, 2nd bank wanted to know 'whats the source of this money'. so its more than cash they are dealing with.

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sheeprunner12 11 months ago

Based on other Tribune stories (COB teller jailed for 15 years; bank teller stole 49K from GGHanna) ....... Is this how many Bahamians expect to realize their "dream" these days????? ...... by conning, stealing, gambling and dealing???? ............. This is a bad sign of where our country is right now........ But the political con-men are still out on Bail???????

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Porcupine 11 months ago

The elimination of cash is about CONTROL. Those who refuse to see it are willfully blind. Bankers are merely pawns in the bigger picture and plan. Bankers are just smart enough to run the machines, held there by their salaries. Again, Upton Sinclair, "It is difficult to get a man to understand something, when his salary depends upon him not understanding it." These banking regulations do nothing except force the tax evaders into new borders, Manly the US and Britain. This is all well-documented, but considered a conspiracy theory by those who spend a bit too much time watching TV, on facebook and social media. There is a real cost to being distracted by the suits and ties.

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