Financial Crime World

Bahamas Removes Financial Hurdles to Strengthen Anti-Money Laundering Efforts

The Bahamas has made significant strides in its fight against financial crime by removing itself from the Financial Action Task Force’s (FATF) Grey List of “Jurisdictions under Increased Monitoring” after a series of reforms aimed at strengthening its anti-money laundering and combating the financing of terrorism (AML/CFT) regime.

International Recognition

The country’s efforts have been commended by international financial regulators, including the FATF and the Caribbean Financial Action Task Force (CFATF). The Bahamas’ AML/CFT/CPF regime has undergone a major overhaul since 2018, with key reforms including the passage of several laws and regulations aimed at improving transparency and accountability in the financial sector.

Key Players

The country’s GFSR, comprising the Securities Commission of The Bahamas, Insurance Commission of The Bahamas, Gaming Board of The Bahamas, and Financial Intelligence Unit (FIU), has played a crucial role in identifying and understanding the ML/TF/PF risks faced by its licensees and registrants. Through risk assessments, on-site and off-site examinations, and effective communication with financial institutions, the GFSR has ensured that these entities understand their AML/CFT/CPF obligations and take necessary measures to assess, manage, and mitigate related risks.

CFATF Recognition

The Bahamas’ efforts have also been recognized by the CFATF, which conducted a Mutual Evaluation Report (MER) of the country’s compliance with FATF 40 Recommendations in December 2015. The MER was published in July 2017, highlighting several deficiencies in the country’s AML/CFT/CPF regime.

Reforms Implemented

To address these shortcomings, the Bahamas implemented significant reforms between 2018 and 2020, including:

  • Passage of laws such as:
    • Financial Transaction Reporting Act (FTRA) 2018
    • Proceeds of Crime Act (POCA) 2018
    • Register of Beneficial Ownership Act 2018
  • Strengthening of regulatory regime by issuing revised AML/CFT/CPF guidelines to supervised financial institutions
  • Development and implementation of risk-based supervisory frameworks

Results

As a result of these efforts, the Bahamas was removed from the FATF’s Grey List on December 18, 2020. This significant achievement has boosted investor confidence in the country’s financial sector and reinforced its commitment to maintaining a sound and stable financial marketplace.

Key Reforms

  • Passage of financial sector legislation
  • Strengthening of regulatory regime
  • Development and implementation of risk-based supervisory frameworks
  • Increased transparency and accountability in the financial sector

Source:

  • The Bahamas, 2018 AML/CFT Report
  • Bahamas Makes Significant Strides in Fight Against Financial Crime: Update on The Bahamas’ National Identified Risk Framework (2020)
  • CFATF Mutual Evaluation Report of The Bahamas (2017)