Financial Crime World

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Bahamas Takes Bold Steps to Combat Financing of Terrorism

Nassau, Bahamas - The Securities Commission of The Bahamas, Compliance Commission, Gaming Board, and Central Bank of The Bahamas have taken significant strides to strengthen their regulations and enforcement mechanisms to combat the financing of terrorism.

Regulatory Overhaul

In a major overhaul, the regulatory bodies conducted risk assessments of licensees and registrants to ensure that their programs captured all emerging and current risks. They also developed and implemented risk-based supervisory programs to monitor compliance with United Nations Security Council Resolutions (UNSCRs) on Terrorism and Proliferation of Weapons of Mass Destruction.

Enhanced Engagement

The authorities have also ramped up engagement with financial institutions and designated non-financial businesses and professions, conducting over 30 briefings and training programs in 2018 and 2019. These sessions covered topics such as AML/CFP obligations, sanctions lists, procedures, policies, legislations, and IOEAMA Orders.

Strengthened Enforcement Regimes

To further strengthen their efforts, the regulators collaborated to revise their enforcement regimes in line with Section 57 of the Financial Transactions Reporting Act (FTRA) 2018. This has enabled them to implement a coordinated penalty framework that can effectively deter violations and breaches of AML/CFP legal and supervisory requirements.

Guidance Notes

The Bahamas has also developed two guidance notes on proliferation, proliferation financing, and financial crime:

  • “Guidance Note on the Sound Management of Risks Related to Financial Crime in The Bahamas”
  • “Guidance Note on Proliferation and Proliferation Financing”

Enforcement Framework Enhanced

In 2018, the Proceeds of Crime Act (POCA) was revised to introduce new measures aimed at combating money laundering and terrorist financing. The Act introduced an administrative penalty regime that strengthened the regulatory toolkit to enforce compliance with AML provisions.

The Financial Transaction Reporting Act (FTRA) 2018 also provides for an administrative penalty regime, which has been implemented by the Group of Financial Service Regulators to enforce compliance with AML/CFT requirements.

CFATF Re-Rating Application

In November 2018, The Bahamas submitted a re-rating application to the Caribbean Financial Action Task Force (CFATF) following a comprehensive review of its technical compliance with FATF Recommendations. As a result, The Bahamas was able to address many of the deficiencies identified and boost its rating to:

  • 30 Compliant and Largely Compliant ratings
  • 10 Partially Compliant ratings

Registrar General’s Department Enhancements

The Registrar General’s Department has also undergone enhancements to its oversight mandate. In August 2019, the Companies (Amendment) Act was passed by Parliament, which requires all Bahamian companies to declare in their annual public filings whether any shareholder is a nominee shareholder and maintain a Declaration of Trust on file stating who is the beneficial owner or controller of the company.

The amendments also strengthen the Registrar General’s enforcement tools by introducing sanctions for non-compliance with required statutory documentation filings and annual fees.