Financial Crime World

Money Laundering/ Terrorist Financing Risks in The Bahamas: Key Findings

General Awareness and Training Needs

The following key findings highlight the need for improved awareness and training among Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs) in The Bahamas:

  • Limited course of action: FIs typically conduct specific ML/TF risk assessments, but there is a lack of awareness about what to do when designated persons or entities on TFS lists are detected.
  • Understanding of TF and PF risks: DNFBPs have limited understanding of TF and PF risks, indicating a need for training on updated FATF standards and obligations.

Regulatory Environment

The Bahamas’ regulatory environment has implemented various measures to address ML/TF risks:

  • Licensing and registration requirements: Licensing and registration requirements adequately limit the possibility of criminals entering the financial sector.
  • Supervision collaboration: Financial supervisors collaborate well on AML/CFT issues, exchanging relevant information and conducting joint onsite visits.

Supervision

The following key findings highlight areas for improvement in supervision:

  • Onsite examinations: Onsite examinations by financial and DNFBP supervisors include ML/TF issues but need to be more risk-sensitive and focused on mitigating AML/CFT risks.
  • Remedial actions: Remedial actions taken by financial supervisors are often characterized by a ‘one size fits all’ approach, with a low number of sanctions imposed.

The Bahamas has implemented various measures to ensure transparency in legal persons and arrangements:

  • Entity incorporation: The Bahamas can incorporate various types of entities, but there is some level of ML/TF risk associated with inactive entities.
  • Beneficial ownership information: Basic and beneficial ownership information is maintained by the Registrar General in The Bahamas.
  • Sanctions effectiveness: While sanctions have been applied to legal persons, it is unclear whether they are effective, proportionate, and dissuasive.