Financial Crime World

Countering Terrorism Financing and Proliferation Financing in the Bahamas

Introduction

The Central Bank of the Bahamas’ Supervisory and Regulatory Guidelines outline key points related to countering terrorism financing and proliferation financing. These guidelines are essential in understanding the regulations and procedures in place to prevent and detect such activities.

Reporting Suspicious Transactions

  • Under section 49 of the Anti-Terrorism Act (ATA), financial institutions must report funds suspected to be linked or used for:
    • Terrorism
    • Terrorist acts
    • By terrorist organizations

This ensures that any suspicious transactions are reported and investigated promptly.

Designated Entities

If an individual or entity is designated as a terrorist entity by the UN Security Council, financial institutions must:

  • Freeze all funds in their name
  • Inform the Attorney-General and FIU
  • Notify the designated entity about the frozen funds

This measure prevents any potential terrorist entities from accessing funds.

Prohibition Financing

Proliferation financing under section 9 of the ATA involves providing or making available funds for:

  • Manufacturing, development, production, distribution, or supply of weapons of mass destruction
  • Use in terrorist acts

Conviction under these provisions can result in severe penalties.

Penalties for Offenses

  • Revocation of license
  • Winding up of a financial institution (SFI)
  • Forfeiture of assets

These penalties serve as deterrents to prevent any potential offenses.

Implementation of UN Security Council Resolutions (UNSCRs)

The Bahamas implements UNSCRs through Part IV of the ATA, which includes procedures for SFIs to follow when dealing with designated entities that support terrorism or proliferation of weapons of mass destruction.

Freezing Funds

Upon receiving a list of designated entities from the National Identified Risk Framework Coordinator, an SFI must:

  • Freeze all funds it holds in the name of such entities
  • Inform the Attorney-General and FIU

This measure prevents any potential terrorist entities from accessing funds.

A designated entity can initiate legal proceedings within 14 days to release frozen funds by commencing an action in the Supreme Court.

Orders by a Judge

Under section 45 of the ATA, after investigation by the Commissioner of Police, the Attorney-General may apply for an order declaring an individual or entity as a “listed entity.” Such orders can restrict cash holdings and access to certain accounts held by SFIs.

Disclosure Requirements

Financial institutions are required to disclose the existence of any property in respect of which they have reasonable grounds to suspect that it is connected with, related to, or may be used for:

  • Terrorism financing
  • Proliferation financing purposes

This ensures transparency and cooperation between financial institutions and regulatory bodies.