Bahamas Tightens KYC Requirements to Enhance Anti-Money Laundering Framework

Government Moves to Protect Financial Institutions Against Money Laundering and Terrorism Financing Risks

The Financial Transactions Reporting Act has been amended in the Bahamas to strengthen Know Your Customer (KYC) requirements, a move aimed at bolstering the country’s anti-money laundering and combating the financing of terrorism (AML/CFT) framework. This amendment is part of ongoing efforts to ensure financial institutions operate with transparency and accountability.

Key Situations Requiring Customer Verification

• New Clients: Financial institutions must verify the identity of customers before establishing a facility or adding them to an existing one.
• Existing Clients: All clients in existence on January 1st, 2001 must have their identities verified.
• Third-Party Transactions: The identity of third-party individuals whose transactions exceed $15,000 through an intermediary’s account must be verified.
• Cash Transactions: Customers other than those operating through their own accounts must have their identities verified before conducting cash transactions exceeding $15,000.

Additional Requirements for Facility Holders

Facility holders, defined as individuals with whom a client-type relationship exists and for whom a professional service is being rendered, are also subject to these requirements. Exemptions apply in certain circumstances where financial institutions may rely on verifications carried out by other institutions involved in the transaction.

Record-Keeping Requirements

To comply with the new regulations, financial institutions must maintain records of transactions, verification processes, and wire transfers for a minimum period of five years. These records should include details such as:

• Transaction amounts
• Currencies
• Dates
• Parties involved
• Facility information