Financial Crime World

The Bahamas Takes Steps to Prevent Financial Crimes Amid Concerns Over Tax Haven Status

The Bahamas, a Caribbean nation with a thriving financial sector, has taken significant steps to strengthen its anti-money laundering and counter-terrorist financing (AML-CTF) framework following its addition to the Financial Action Task Force’s (FATF) grey list in 2018. The country’s economy, which relies heavily on tourism and offshore services, faces concerns over its reputation as a tax haven.

Economic Growth and Challenges

According to the World Bank, real GDP growth is expected to reach 4.3 percent in 2023 and two percent in 2024. However, the country’s financial sector has seen a decline in asset holdings within the banking sector, attributed to decreased economic activity.

AML-CTF Framework Strengthening

In response to concerns over its AML-CTF framework, The Bahamas made substantial changes to the Beneficial Property Registration Act in September 2020. The Caribbean Financial Action Task Force (CFATF) subsequently found 18 non-full and 20 largely compliant recommendations during its mutual evaluation report in November 2021.

Progress and Challenges

The country’s commitment to AML regulations was reaffirmed with its removal from the EU money laundering jurisdictions list in January 2022. Despite this progress, The Bahamas remains vulnerable to money laundering threats due to a lack of official records of beneficial ownership and no obligation for resident-paying agents to disclose payments to non-residents.

Recent Developments

A recent report by the CFATF found that The Bahamas had made notable progress in rectifying technical compliance deficiencies and was re-evaluated on 13 out of the 40 FATF Recommendations. The country continues its dedication to transparency, amending specific sections of legislation with the aim of achieving substantial compliance with all 40 FATF recommendations.

AML-CTF Framework Overview

The Bahamas’ AML-CTF framework is designed to prevent money laundering by domestic and foreign nationals through the country’s financial institutions. Key provisions include:

  • Proceeds of Crime Act
  • Financial Intelligence Unit Act
  • Financial Transactions Reporting Act (FTRA)
  • Financial Intelligence Regulations
  • Anti-Terrorism Act

AI-Driven AML Solutions

To effectively address the risks associated with financial crimes, enterprises subject to AML regulations in The Bahamas can benefit from AI-driven AML solutions offered by companies such as Sanction Scanner. These advanced solutions enable organizations to meet their AML obligations efficiently and stay at the forefront of AML compliance efforts.

Conclusion

With its reputation as a tax haven still under scrutiny, The Bahamas must continue to prioritize financial crime prevention measures to ensure the integrity of its financial sector and maintain its position as an attractive destination for international investors.