Us Report 'Won't Impact Financial Crime List Escape'


Emmanuel Komolafe


Tribune Business Editor


A withering US report will "not significantly impact" The Bahamas' efforts to escape a list of nations with deficiencies in their anti-financial crime defences, a risk management specialist said yesterday.

Emmanuel Komolafe, pictured, acknowledged that the timing of the US government's International Narcotics Control Strategy Report (INCSR) was "not perfect" given that The Bahamas is now readying for a visit that will determine whether it is finally removed from the Financial Action Task Force's (FATF) enhanced monitoring list.

The Trump administration's report, which must be presented to the US Congress every year, highlighted alleged weaknesses that have also been identified by the FATF, the global standard setter in the fight against money laundering and counter-terror financing (AML/CFT).

In particular, the US report said there had been a 67 percent drop in money laundering prosecutions and convictions in 2019, while it suggested that the number of suspicious transactions reports (STRs) submitted to the Financial Intelligence Unit (FIU) by banks and other financial institutions was not enough for an industry with $400bn in client assets under administration.

Mr Komolafe, arguing that the FATF process for assessing a country's compliance with its "40 recommendations" or global standards was "more tedious and comprehensive" than that used for the US report, argued that the latter document was unlikely to influence a "site visit" to The Bahamas before mid-May 2020.

That visit, by an FATF-appointed team, will determine whether The Bahamas has adequately implemented an 18-month plan of legislative and regulatory reforms, and shown enough political will to sustain them, to secure its removal from the Paris-based body's ongoing surveillance.

"The FATF is the global standard setting body. I would think their report and assessment carries more weight than this," Mr Komolafe told Tribune Business in comparison to the US report.

"The Bahamas has been on this enhanced monitoring programme by the FATF since October 2018. We've been through quite a bit, and the INCSR acknowledged all the work done by the Bahamas to overhaul its legislation to combat anti-money laundering and terror financing, and the digitisation of the Attorney General's Office and Financial Intelligence Unit (FIU).

"We've done quite a bit, and both the FATF, the CFATF and the US recognise all this. From the FATF perspective, the process and way they go about assessing countries and determining if they take them off an adverse listing is quite robust. The timing of the [US] report may not be perfect, but in terms of affecting the FATF decision I don't think it will be significant and impactful."

The US report argued that "certain regulators" in The Bahamas, which it did not name, had failed to "acknowledge" the money laundering risks posed by "online gaming" and money transmission businesses.

However, Mr Komolafe said the opposite was true when it came to the latter sector, as this had long been placed under the Central Bank of The Bahamas' oversight and made subject to a robust Know Your Customer (KYC) due diligence regime once the risks were identified.

"The same risk here in The Bahamas is the same as in the US and across the globe," he added. "Each country has put in controls to mitigate the risk and I don't think The Bahamas is the exception in that regard. As a responsible international financial centre, The Bahamas has sought to comply with international standards, which are primarily those of the FATF and its 40 recommendations."

Mr Komolafe also took issue with the US report using assets under management as a benchmark to determine the number of STRs submitted to the Financial Intelligence Unit (FIU) is too low for the financial sector's size, arguing that other indicators - such as client and institution numbers - needed be analysed, too.

"We have to put it into context," he told Tribune Business. "We cannot look at it in isolation. We also have to look at the number of entities, the number of clients. There doesn't have to be a direct correlation between assets under administration and the number of STRs. In the absence of data that speaks to the number of clients and institutions, I don't know if it's wide enough review.

"There's been attrition in the sector, and a reduction in the number of entities. There are no statistics on this, but there may also have been a reduction in the number of clients as well. If you are just pulling assets under management and looking at that in relation to STRs it may not tell the full story."


Well_mudda_take_sic 11 months, 4 weeks ago


As I've said over and over again for years now: The likes of Dirk Simmons and all of the former and existing senior regulators now on the 'payroll' of Sebas Bastian present a clear and unequivocal existential threat to the survival of both our offshore and onshore banking sectors. And the same goes for that other numbers boss, Craig Flowers.

And to think someone like Alfred Sears, who is a de facto business partner of these low-life thugs and their racketeering criminal enterprises, has the temerity to lecture us on what government needs to do to appease the likes of the FATF, IMF, OECD et al. And even Worse still, Minnis and his crony senior officials within the FNM party are only too happy to accept funding for their political campaign and other endeavours from Sebas Bastian and Craig Flowers. What a flaming joke!


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