Bahamas Central Bank Outlines Guidance for Financial Institutions to Assess Money Laundering, Terrorist Financing Risks
Strengthening Anti-Money Laundering Efforts in The Bahamas
The Central Bank of the Bahamas has released new guidance notes for supervised financial institutions (SFIs) to complete risk assessments on money laundering, terrorist financing, and proliferation financing. This move aims to strengthen the country’s anti-money laundering efforts and ensure compliance with international standards.
Key Requirements for Risk Assessments
According to the guidance notes, SFIs are required to conduct comprehensive risk assessments that identify potential vulnerabilities to money laundering, terrorist financing, and proliferation financing risks within their organizations. The assessments must also evaluate the effectiveness of existing controls and determine if additional measures are needed to mitigate residual risks.
The Central Bank expects SFIs to follow a structured approach when conducting risk assessments, including:
- Identifying Inherent Risks: Identifying the inherent risks associated with various business activities
- Assessing Controls: Assessing the effectiveness of existing controls in mitigating these risks
- Developing Corrective Action Plans: Developing corrective action plans where necessary
- Evaluating Residual Risks: Evaluating residual risks and determining if additional measures are required
Regular Review and Update of Risk Assessments
Moreover, SFIs are expected to regularly review and update their risk assessments to ensure they remain effective and aligned with changing business needs.
Guidance Notes in Conjunction with Existing Regulations
The Central Bank has emphasized that the guidance notes should be used in conjunction with existing regulations and guidelines on anti-money laundering and counter-terrorism financing. This move is seen as a step towards strengthening the country’s financial system and reducing the risks associated with money laundering, terrorist financing, and proliferation financing.