Financial Crime World

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Bahamas Fails to Address Money Laundering Concerns

The Bahamas has been identified as a high-risk jurisdiction for money laundering, with trade-based schemes, fraud, human trafficking, and drug trafficking being major concerns. According to the country’s National Risk Assessment, little is done in terms of prevention, detection, or enforcement of these schemes.

Trade-Based Schemes Pose Significant Threat

The Bahamas has seen an increase in trade-based schemes, which involve manipulating trade transactions to disguise the movement of money. These schemes are often used for tax evasion and money laundering, and can be difficult to detect.

  • Examples of trade-based schemes include:
    • Invoicing or shipping goods at a lower value than their true worth
    • Manipulating prices or quantities of goods in international trade
    • Using fake invoices or documents to justify transactions

Fraud Remains Most Prevalent Predicate Crime

Over 100 suspicious transaction reports were filed under fraud in The Bahamas last year, making it the most prevalent predicate crime. Fraud by false pretenses, forgery, counterfeiting, and stealing by reason of employment are common types of fraud committed in the country.

  • Types of fraud in The Bahamas include:
    • Forgery of documents or currency
    • Counterfeiting goods or services
    • Stealing by reason of employment (e.g. embezzlement)

Human Trafficking and Drug Trafficking Remain Major Concerns

The Bahamas is a major transit point for trafficked people and migrants attempting to enter the US, with people smugglers operating extensively in the country. Forced labor is also rife in the construction, agriculture, fisheries, and domestic labor sectors. Cannabis and cocaine are the most common drugs smuggled into the country.

  • Human trafficking concerns include:
    • Trafficking of people for forced labor or sex
    • Smuggling of migrants through the country
  • Drug trafficking concerns include:
    • Importation of cannabis and cocaine

Estimated $179 Million - $448 Million Laundered Annually

An estimated $179 million to $448 million is laundered every year in The Bahamas, highlighting the need for effective anti-money laundering (AML) measures.

AML Laws in The Bahamas

The Bahamas has overhauled its AML and financial crime regulatory framework in recent years. In 2017, the country conducted a national AML/CTF risk assessment, which led to significant changes in laws and regulations. The Proceeds of Crime Act empowers police, customs, and the judicial branch to investigate AML cases.

  • Key AML laws and regulations in The Bahamas include:
    • Proceeds of Crime Act
    • Anti-Money Laundering (AML) Regulations

Weaknesses Remain

Despite these efforts, weaknesses remain in The Bahamas’ AML regime. Designated non-financial businesses and professions (DNFBPs) report suspicious transactions through a paper-based system, which has a negative impact on reporting and analysis. The judicial system is also slow-moving, with many defendants waiting years for their cases to be heard.

VinciWorks Publishes Guide to AML Compliance in Latin America and the Caribbean

To support businesses operating in the region, VinciWorks has published a guide to AML compliance in Latin America and the Caribbean. The guide provides an overview of key AML challenges and issues, as well as a country-by-country assessment of AML risks and laws.

  • Click here to download the free guide: [link]