By YOURI KEMP
Tribune Business Reporter
The deputy prime minister yesterday said reforms to the Register of Beneficial Ownership Act give The Bahamas "another weapon in our arsenal" to combat future and present "blacklistings".
K Peter Turnquest told Parliament that the changes will enhance The Bahamas' efforts to escape the Financial Action Task Force's (FATF) enhanced scrutiny over perceived deficiencies in its anti-financial crime regime.
While COVID-19 continues to prevent FATF assessors from conducting an on-site visit to The Bahamas to determine this nation has implemented all the legislative changes to address weaknesses in its anti-money laundering/counter-terror financing regime, Mr Turnquest said the amendments debated yesterday were critical to passing this final test and exiting the oversight initiative.
And, in turn, he added that escaping the FATF programme is a major factor in The Bahamas being removed from the European Union's (EU) own "blacklist" of nations deemed to present a "high risk" of facilitating financial crime. The 27-nation EU had previously delayed implementation of its blacklist until October 2020 due to COVID's impact, but that extension has now almost expired.
"This Bill will address a major recommendation by the Financial Action Task Force (FATF) with respect to ensuring that no person is able to hide their identity through the use of a Bahamian entity," Mr Turnquest told the House, adding that there was "unanimous agreement" from the Bahamian financial sector that it would bolster The Bahamas' prospects of escaping the FATF process.
"The implications of this Bill for The Bahamas are far-reaching, and the implementation of the measures proposed vital to safeguarding the integrity of the financial sector and the reputation of the jurisdiction.
"This Bill to amend the Register of Beneficial Ownership Act that we are debating today is another weapon in our arsenal to counter the narrative that The Bahamas’ financial services industry operates outside of the regulatory bounds accepted by the international financial community," Mr Turnquest continued.
"More importantly, it is protection against the abuse of our financial services industry by persons attempting to use our financial institutions and products to avoid declaring, or to abate the true extent of, their financial assets to the relevant authorities in their home countries, or as a shield to hide or launder illicit assets.”
Mr Turnquest added that the Bill brought Non-Profit Organisations (NPOs) and Segregated Accounts Companies (SAC) under the corporate entities covered by the Act.
"While it can be argued that a SAC would have already been within the scope of the Act on the basis that a SAC is either an IBC or a Companies Act company, we felt that it was important to expressly state that SACs were included, given that the intrinsic operation of a SAC could be viewed as a vulnerability to our anti-money laundering framework with respect to the identification of beneficial owners," the deputy prime minister said.
"This is because the assets of a SAC are not pooled and deemed to be owned by the shareholder of the company, as is usually the case. But rather, different individuals other than the shareholders of the SAC beneficially own the assets of the SAC in separate accounts within the SAC."
Mr Turnquest said the Bill "also fine tunes the definition of beneficial owner with respect to NPOs and Partnerships (Common Law Partnerships, Limited Liability Partnerships and Exempted Limited Partnerships) by defining who the beneficial owners of such entities are".
"The Bill imposes a duty on the Registrar General to provide beneficial ownership information in those cases where a legal entity does not have a registered agent. A Compliance Unit has been established in the Registrar General’s Department to monitor the provision of beneficial owner information and other compliance measures related to the Register of Beneficial Ownership registry. Two senior attorneys of the Office of the Attorney General have been assigned to this unit and a third is being retained.”