Financial Crime World

Evaluation Report on Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Regime in The Bahamas

Money Laundering/Terrorism Financing Risks

The AML/CFT regime in The Bahamas has been evaluated by the International Cooperation Review Group (ICRG). Some key findings related to money laundering and terrorism financing risks include:

  • Financial Institutions (FIs): FIs in The Bahamas have ML/TF risks assessment procedures in place, but awareness of course of action for designated persons or entities on Terrorism Financing Sanctions lists is lacking.
  • Unverified Facilities: A large number of unverified facilities exist in the domestic banking sector.

Designated Non-Financial Business and Professions (DNFBPs)

The ICRG evaluation report highlights some concerns regarding DNFBPs:

  • Limited Understanding of Risks: DNFBPs have extensive AML/CFT policies and procedures, but understanding of ML/TF risks and other areas of risk is limited due to lack of updated national risks identified by the jurisdiction.
  • Low Awareness of Terrorism Financing and PEPs Risks

Supervision

The report notes some characteristics of an effective system in The Bahamas:

  • Licensing and Registration Requirements: The Bahamas exhibits some characteristics of an effective system, with licensing and registration requirements that limit the entry of criminals into the financial sector.
  • Risk-Based Approach: Financial supervisors use a risk-based approach for most sectors, but more emphasis should be placed on ML/TF risks.

However, challenges exist in registering lawyers, accountants, and real estate agents, and additional resources are needed to improve supervision.

The Bahamas is able to incorporate companies, partnerships, foundations, and executive entities with certain information required upon formation. Basic and beneficial ownership information is maintained by the Registrar General in The Bahamas. However, there are concerns about sanctions being effective, proportionate, and dissuasive.

General Observations

The report highlights some general observations:

  • Risk-Sensitive Onsite Examinations: Financial supervisors conduct onsite examinations that include ML/TF issues, but need to be more risk-sensitive.
  • Remedial Actions: Remedial actions taken by financial supervisors are often characterized by a ‘one size fits all’ approach.
  • Low Number of Sanctions Imposed

Overall, the report highlights areas where The Bahamas can improve its AML/CFT regime, including strengthening supervision, improving transparency of legal persons and arrangements, and enhancing remedial actions.