Financial Crime World

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Anti-Money Laundering and Terrorism Financing in The Bahamas

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This chapter provides a comprehensive guide to anti-money laundering (AML) and terrorism financing (TF) regulations in The Bahamas, specifically for financial institutions.

Money Laundering: Understanding the Process

What is Money Laundering?

  • Money laundering is the process by which criminals conceal the origin and ownership of proceeds from their crimes.
  • It’s a complex scheme that involves transforming dirty money into clean money to avoid detection.

The Three Stages of Money Laundering

  1. Placement: Physical disposal of cash proceeds derived from illegal activity.
  2. Layering: Separation of illicit proceeds from their source through complex financial transactions.
  3. Integration: Provision of apparent legitimacy to criminally derived wealth.

Key Characteristics of Money Laundering

  • The three stages may occur separately or simultaneously, or overlap.
  • Money laundering is a continuous process that requires careful planning and execution.

Terrorism Financing: Understanding the Threat

What is Terrorism Financing?

  • Unlike money laundering, which focuses on the origin of funds, terrorism financing looks at the destination of funds, which may originate from a legitimate source.
  • Terrorism financing is the provision or collection of funds with the intention that they be used to carry out acts of terrorism.

International Cooperation Against Terrorism Financing

  • The United Nations has designated persons and entities suspected of terrorist connections.
  • Countries are required to freeze their assets and prevent them from benefiting from such assets.

Key Responsibilities for Financial Institutions in The Bahamas

Reporting Obligations under Section 44 of the Anti-Terrorism (Financial Powers) Act (ATA)

  • Financial institutions in The Bahamas have a reporting obligation under section 44 of the ATA.
  • This requires them to report any suspicious transactions or activities that may be related to terrorism financing.

Role of the National Investigation and Intelligence Fusion Unit (NIRF)

  • The NIRF Coordinator is responsible for maintaining a list of designated entities.
  • They circulate this list to financial institutions and request information on whether any designated entity has funds in The Bahamas.

Role of the Financial Intelligence Unit (FIU)

  • The FIU shall furnish the Attorney General with information required to facilitate an application under section 45 of the ATA where anyone designated on the list has funds in The Bahamas.