AG: Prosecutions rise 40-fold over money laundering

Attorney General Carl Bethel.

Attorney General Carl Bethel.


Tribune Business Editor


The Bahamas will have resolved "99.9 percent" of the remaining weaknesses in its anti-financial crime defences by year-end, with money laundering prosecutions having increased 40-fold.

Carl Bethel QC, the Attorney General, yesterday told Tribune Business that this nation "was well on the way" to addressing the "strategic deficiencies" that resulted in the Financial Action Task Force (FATF) grouping it with war-torn countries such as Syria and Yemen.

While the world's anti-money laundering standard setter has given The Bahamas until September 2019 to complete the requirements set out in its so-called "action plan", Mr Bethel expressed confidence that this nation will meet all compliance targets by April next year.

He added that The Bahamas had already made progress in the seven areas identified by the FATF as needing improvement, with money laundering prosecutions over the 14 months to end-September 2018 having risen to 40 from just one in the prior period.

Mr Bethel, referring to statistics issued in a statement from the Attorney General's Office, said 19 of these cases had resulted in convictions, thereby meeting the FATF's demand that The Bahamas prove it is "investigating and prosecuting all types of money laundering".

He revealed that some of the Paris-based body's latest demands, such as the requirement to "ensure timely access to adequate, accurate and current basic and beneficial ownership information", went beyond its own standards for combating money laundering and terrorism financing.

But, rather than become "flustered" by this, Mr Bethel said The Bahamas had recognised it was already on track to comply as a result of legislation to create a Beneficial Ownership Registry, which is due to be passed before year-end to meet the requirements of the Organisation for Economic Co-Operation and Development's (OECD) Base Erosion and Profit Shifting (BEPS) initiative.

The Attorney General also admitted that The Bahamas' inclusion on the FATF's 11-strong list of nations with "strategic deficiencies" was not unexpected, adding that it was considered "the most likely outcome" to its Caribbean affiliate's 2015 review of this nation.

That review, published in 2017, highlighted several deficiencies in this nation's execution and implementation of its anti-money laundering and counter terror financing regime - a number of which were cited by the FATF as areas targeted for improvement by the "Action Plan" agreed with The Bahamas.

Mr Bethel, noting that the Minnis administration had inherited the situation from its predecessor, said many of the 2015 weaknesses had already been addressed through legislative and other reforms. He added that the "extraordinary progress" made by The Bahamas to-date had been recognised, although this nation rarely received any public praise.

"We were aware that this could have been the likely outcome; that we would have these compliance issues on the technical, implementation points," Mr Bethel told Tribune Business of The Bahamas' inclusion on the FATF list. "We were aware going into this that was the most likely outcome.

"We have thoroughly reformed the legal regime, thoroughly improved the tools at the disposal of the financial sector to prevent abuse of its functions, and it's now merely a question of implementation and documenting that implementation. We're well on the way to being fully compliant.

"In terms of the FATF stuff, they have agreed on a timeframe of September 19. It's our intent to fully address everything by April of next year. We think we are well on the way to completing 99.9 percent of the Action Plan between now and end of the year. Our hard target is April of next year to be fully on stream."

Mr Bethel said there would be "more good news in short order to bring to the Bahamian people on compliance with the FATF", although he did not specify which actions he was referring to.

As reported by Tribune Business, the FATF statement last week identified seven areas that The Bahamas must address. They are:

t then listed the seven weaknesses that The Bahamas must address. They are:

  • Developing and implementing a comprehensive electronic case management system for international cooperation.

  • Demonstrating risk-based supervision of non-bank financial institutions.

  • Ensuring the timely access to adequate, accurate and current basic and beneficial ownership information.

  • Increasing the quality of the Financial Intelligence Unit's (FIU) products to assist law enforcement authorities in the pursuit of money laundering/terror financing investigations, including "complex" cases.

  • Demonstrating that authorities are investigating and prosecuting all types of money laundering, including "complex" money laundering cases; stand-alone money laundering; and cases involving proceeds of foreign offences.

  • Demonstrating that confiscation proceedings are initiated and concluded for all types of money laundering cases.

  • Addressing gaps in the terrorism financing and proliferation financing frameworks, and demonstrating implementation.

The Attorney General's Office, in its statement issued yesterday, said it had made "noteworthy progress" on money laundering investigations, prosecutions and convictions. It added that some 40 prosecutions took place between July 2017 and September 2018, resulting in 19 convictions, compared to just one case for an unspecified "previous period".

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 Bahamas during the four years prior to its 2015 assessment.

While one conviction was obtained subsequent to its report through a fraud case, the CFATF said this was "inadequate" given the size of the Bahamian financial services industry, and found that the Royal Bahamas Police Force (RBPF) "lacks the capacity to effectively pursue" money laundering offenders due to inadequate skills, training and resources.

Mr Bethel, though, yesterday hailed the "success" of money laundering prosecutions under the current administration, and said the "tracking" of these cases had been "a matter of some concern".

He added that both the FIU and his Office's international co-operation unit were moving swiftly to address the FATF's electronic case management concerns, with the necessary software and reporting template due to be "installed on all relevant computers" at the latter's offices next week.

The Attorney General said his Office's case management system would be able to capture statistics and "document progress every step of the way", enabling The Bahamas to provide regular reports to the FATF and others on how it was improving.

The FIU, too, had chosen the software solution best able to assist it, and was now said to be waiting on the Ministry of Finance to complete its own processes so installation could take place.

"We think we will between now and the end of December all the software and case management systems will be installed," Mr Bethel said. "It will be well on the way to being resolved. That only leaves the BEPS matter, and that will be resolved also before the end of December."

Mr Bethel revealed that while the FATF's beneficial ownership information demands of The Bahamas went beyond the latter's own standards, this did not present any great obstacle since the Register of Beneficial Ownership Bill was being enacted to meet the OECD's separate requirements.

"We already have this information available and are compliant with existing FATF recommendations," the Attorney General added. "They've gone a little further in the Action Plan than the FATF recommendations.

"Rather than take issue with that, we will move in concert with the steps required under BEPS. We're not going to be flustered into expansion of the recommendations by the FATF in the Action Plan."

The CFATF, in its 2017 mutual evaluation of The Bahamas, gave this nation a 'largely compliant or compliant' rating in 18 of its 40 "recommendations", while posting "partially compliant" rating for in 21 "recommendations" and a "non-compliant"rating in one. The Bahamas' was also found to have 'low' effectiveness in six out of 11 anti-money laundering/counter terrorism financing categories.

"What was most important for us was what ought to have been done since 2015, which was reforming the entire regime, getting the risk assessment done, the guidance notes done and sensitising financial institutions and non-bank institutions to their obligations under the Proceeds of Crime Act and Financial Transactions Reporting Act," Mr Bethel said.

"We may have issues around the timing and way in which things are done, but our commitment to preventing abuse of our financial system continues. It transcends government. When defects and deficiencies were realised in 2015, as captured in the CFATF report in 2017, we think we've largely - if not totally - addressed them save for a few areas of implementation mentioned in this FATF process.

"This is The Bahamas. When we put our minds to it, we do what we do very well," Mr Bethel continued. "Although there's a reluctance to acknowledge it publicly, everyone acknowledges privately to our face the extraordinary progress we've made in just over a year in thoroughly reforming the legal structure, reforming the whole basis on which regulation is conducted.

"We are confident we've made significant progress, which is acknowledged but not admitted, and are well on our way to restoring the reputation of The Bahamas as a fully responsible leader in the provision of financial services."

The Attorney General's Office, in its statement, said the National Action Task Force (Task Force) dealing with anti-money laundering and counter-terror financing had moved to address the deficiencies identified in the CFATF report as soon as it was published in July 2017.

This involved completion of The Bahamas' National Risk Assessment (NRA) on money laundering and counter-terror financing dangers, and development of a National Identified Risk Framework Strategy (NIRFS) to close gaps in this nation's financial crime defences.

This led to the passage of numerous legal reforms, including the revised Proceeds of Crime and Financial Transactions Reporting Acts; the Anti-Terrorism Act and Travellers' Currency Declaration (Amendment) Act; and numerous laws and regulations to facilitate automatic tax information exchange.

Multiple regulations, guidance notes and the roll-out of risk-based supervision has also occurred, with the Insurance Commission, the Gaming Board and the Securities Commission due to released new anti-money laundering and counter-terror financing (AML/CFT) guidelines before Wednesday's month-end.

Describing the FATF list as a "monitoring list", the Attorney General's Office said: "The terms of the short 'Action Plan' adopted by the FATF Plenary in Paris this month clearly indicates that all that is required now of The Bahamas is the production of evidence to support the effective implementation of the vigorous AML/CFT and counter-identified risk legal framework, which has now been created by the legislative framework, the NRA and subsequent guidance notes."

It added that The Bahamas was aiming to be the first country assessed by a CFATF fourth round evaluation to seek a "re-rating" of its anti-money laundering and counter-terror financing legal regime.


bogart 4 years, 3 months ago

4th paragraph... "........with money laundering prosecutions over the 14 months to end-September 2018 having risen to 40 from just one (1) in the prior period."

Really...odd seeing that since 2000... LIKE 18 YEARS AGO....and before ANTI Monny laundering legislation passed to protect nation fron grey...to blacklisting ...numerous foreogn delegations....to say what tough efforts being applied...just come to find out even the govt run govt Central Bank Regulators....has thd govt run Govt Post Office Bsnk...aint evrn did knows how much depositors money they supposdd to have...an if they didnt know this they could not accurately place Bank Statutory Reserve.deposit with Central Bank if there was a run....who accountable..????...


Bonefishpete 4 years, 3 months ago

So they caught 40 tourists leaving PI without declaring their winnings to Customs?


ThisIsOurs 4 years, 3 months ago

Wonderful! That means by January we'll be able to start work on the mauve list that the OECD will release on Christmas Eve


bogart 4 years, 3 months ago

.....need to clarify my statement above... "Really... odd seeing that since 2000...LIKE 18 YEARS AGO..and before ANTI moneylaundering..." should be."....and AFTER ANTI money laundering"....... We had severe legislation all the way back for 18 years ago thanks to former PM Hubert Papa Ingraham.......just amazed that now 18 years later prosecutions increase 40 fold from 1 previous......


Well_mudda_take_sic 4 years, 3 months ago

LMAO as our AG telecasts to the OECD and FATF that it's time for them to once again move the goal posts.


TheMadHatter 4 years, 3 months ago

"...19 of these cases had resulted in convictions, thereby meeting the FATF's demand that The Bahamas prove it is "investigating and prosecuting all types of money laundering".

Nonsense. There has not been one single story in this newspaper about anyone going to jail for money laundering. We have to supply banks with blood samples from our great grandmother to open an account, meanwhile money launderers continue untouched.....if there even are any money launderers.

I was asked last month by my bank to bring in my new passport for them to photocopy because the one on file is my old passport. Really? So im not me anymore? The same man you see in here every week for 12 years? KYC means "know your customer". Do you know me? Do you know me to be a terrorist? If so, call the police. I will stand right here in the bank and wait for them.


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