Financial Crime World

Bahamas Financial Regulators Strengthen Cooperation on Anti-Money Laundering

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The Inspector of Financial and Corporate Services and the Insurance Commission have signed a landmark agreement to enhance regulatory cooperation on anti-money laundering (AML) supervision in The Bahamas.

Enhanced Regulatory Cooperation

Under this arrangement, the Compliance Commission will work closely with both regulators to ensure that financial institutions and corporate service providers comply with AML requirements. The Commission will also administer AML on-site examinations for these sectors.

Key Responsibilities

  • The Insurance Commission will continue to supervise insurance companies’ AML compliance.
  • Regulatory bodies will remain responsible for administering all other regulatory requirements, except for AML supervision, which is the responsibility of the Inspector of Financial and Corporate Services and the Compliance Commission.

Importance of Cooperation

This strengthened cooperation is crucial in preventing money laundering and terrorist financing, as well as ensuring that financial institutions operate transparently and fairly.

Focus on Financial and Corporate Service Providers

Financial and corporate service providers (FCSPs) play a vital role in facilitating financial transactions. As such, they are subject to the AML laws of The Bahamas, where services rendered involve:

  • Facilitating the entry or placement, movement, or removal of funds into, within, or out of the financial system.

The Compliance Commission supervises FCSPs for AML purposes, ensuring that they comply with requirements under:

  • Financial Transactions Reporting Act (FTRA)
  • Proceeds of Crime Act
  • Other relevant regulations

Supervisory Framework

The Compliance Commission has a two-fold function:

  1. Maintaining a general review of financial institutions to ensure compliance with AML laws.
  2. Conducting on-site examinations when deemed necessary.

The Commission can also appoint an auditor to conduct such examinations at the expense of the FCSP firm.

Powers and Responsibilities

  • The Commission is empowered to:
    • Enter into contracts
    • Require production of records and information
    • Demand transaction records from financial institutions

Conclusion

This strengthened cooperation between regulatory bodies will enhance the effectiveness of AML supervision in The Bahamas, ultimately contributing to a safer and more secure financial system.