By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
The Central Bank’s governor yesterday voiced optimism that The Bahamas will within three years possess a complete property database to help counter real estate-based money laundering.
John Rolle told an anti-financial crime conference organised by the Central Bank and other financial services regulators that a “world leading” data-driven approach which captures all properties in The Bahamas is an important anti-financial crime defence.
He said: “As for real estate, the Bahamian public sector’s challenge is that we have many data sources of cross-border and luxury real estate purchases, but they have not yet been fully integrated into a unified source.
“Data is directly available to the Central Bank through, for example, our exchange control approval process for foreign purchases of real estate, but this data doesn’t reveal any worrisome trends in terms of the exchange control vetting process.”
“At this point, however, we lack a comprehensive database of all properties in The Bahamas,” Mr Rolle added. “The Department of Inland Revenue and Ministry of Finance have commenced a major project to remedy this data shortage and, as a benefit of this work, we expect a that full registry of Bahamian property ownership will facilitate a universal approach to preventing real estate-based money laundering in The Bahamas.
“In the interim the Central Bank will work with several other agencies to better co-ordinate real estate relevant data. I am hopeful that within three years The Bahamas can demonstrate that it has a world leading and fully data-driven approach to preventing real estate-based money laundering.”
The Central Bank, from a study of 2018 deposit flow trends in the Bahamian commercial banking sector, has concluded that real estate is one of three industries that pose the greatest threat to the financial system’s integrity due to their vulnerability to exploitation by money launderers and financial criminals
This finding was based on the real estate industry’s sheer size, given that it touches attorneys, developers and real estate brokers and agents. Between the three, they accounted for $3.589bn of the $6.17bn in Bahamian dollar deposit inflows analysed in the study.
“Attorneys and legal firms are by some distance the largest segment among the 17 under consideration, with close to half the deposit inflows. This reflects the legal industry’s engagement in real estate settlements,” the Central Bank added.
“Real estate-related deposits comprise more than half the deposit flow across the 17 sectors. The real estate industry, broadly defined, is big enough to constitute at least a potential threat. That threat could arise from either Bahamian dollar or foreign currency flows, but evidently not from cash-based transactions.”
Mr Rolle yesterday acknowledged that The Bahamas faces an uneven playing field when trying to compete as a small country in international financial services. As to this nation’s efforts to combat money laundering and terrorism financing, he said: “We have made very large strides in this area, but the fact that we have had to make very large strides shows that we started from a weaker position. Our current position is really good, and in two to three years should be world leading.”
Mr Rolle noted that this nation must be able to encourage opinion makers such as the Financial Action Tack Force to give this nation fair credit for steps taken towards anti-money launder and counter terrorism financing.
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