The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

Bahamian financial institutions must demonstrate that compliance systems are not only in place but actively working to ensure this jurisdiction received a strong grade from the upcoming Financial Action Task Force (FATF) assessment of its anti-fnancial crime defences.

Ryan Pinder KC, the attorney general, speaking at the Society of Trust and Estate Practitioners (STEP) Bahamas conference, said evaluators will visit both government agencies and private sector institutions as part of the upcoming fifth-round mutual evaluation.

“When the FATF assessors come in October, they will be visiting the private sector. They will be visiting your institutions and testing whether you actually know what is going on; whether you understand the requirements and how to implement them,” said Mr Pinder.

He warned that the review will focus heavily on how institutions and authorities apply anti-money laundering and counter-terrorism financing rules in practice. “This is not the opportunity to say the Government is not doing its job. This is not the opportunity to say the regulators are too hard on you or that you let things slide,” Mr Pinder said.

“Your answer needs to be: We understand the requirements, we have implemented them, and here are the documents showing we are doing the right thing and working hand0in-hand with policymakers and regulators.”

Mr Pinder said the assessment will go beyond reviewing legislation and instead test how effectively the rules are implemented across the financial system. “The fifth round of mutual evaluation goes beyond technical compliance. It looks at effectiveness,” said Mr Pinder.

“It looks at how you implement the requirements in law. How are you doing it as an industry? Are you meeting your obligations?” The review will also examine whether law enforcement agencies and the courts are effectively pursuing financial crime cases.

“When the police and the Financial Crimes Unit conduct investigations and bring charges for financial crimes, are they also bringing money laundering charges where appropriate? These are the types of things that will be examined,” said Mr Pinder.

He said authorities are now ramping up preparations ahead of the review, including expanding the Attorney General’s Office compliance capacity.

“In the Office of the Attorney General, we have doubled the size of our compliance team over the last year in preparation for this. I now have a compliance team of about 12 attorneys focused on this and the fifth round of the mutual evaluation,” said Mr Pinder.

He added that the Bahamas enters the process from a strong technical compliance position. “Everybody in this room should know where we stand, because you should be trumpeting it from the sky,” said Mr Pinder.

“We are 40 for 40 on the FATF recommendations, compliant or largely compliant. We were the sixth country in the world, the second in this hemisphere, and we were again front of the class.”

Mr Pinder added that The Bahamas became the first country globally to achieve compliance with FATF standards covering virtual asset service providers.

“We were the first country in the world to be compliant under the virtual asset service provider provisions of the FATF recommendations,” said Mr Pinder. “We achieved that in the middle of the FTX crash.”

Despite that progress, he stressed that both government and industry must demonstrate strong implementation of anti-money laundering rules during the upcoming review.

“We are preparing for that. We will have a lot of industry consultation, and we will have very direct engagement between industry and government to help with the messaging and preparation,” said Mr Pinder.

“The goal is to go in and help institutions make sure they are ready, and that they have the right governance and compliance frameworks in place. Preparation is always a success.”