BAHAMAS: Financial Intelligence ‘put away in corner and forgotten about’ says Deputy Prime Minister.

As published on tribune242.com, Friday 26th April, 2019.


A KEY agency in The Bahamas’ battle against financial crime had been “put away in a corner and forgotten about”, the deputy prime minister argued yesterday.

K P Turnquest, speaking at a money laundering reporting officers (MLRO) forum staged by the Financial Intelligence Unit (FIU), said the latter was now being “beefed up” with the “technical tools” and training necessary to ensure it properly fulfills its mandate.

The FIU, which is responsible for analysing all suspicious transactions reports (STRs) submitted by Bahamas-based financial institutions to determine whether the police need to investigate for possible financial crime and terrorism financing, has been cited as a weakness by international regulatory bodies.

The Financial Action Task Force (FATF), the global standard setter on anti-money laundering and counter-terror financing, said The Bahamas needed to “increase the quality of the FIU’s products to assist law enforcement authorities” when placing this nation on its monitoring list last year.

With further reviews of The Bahamas’ progress upcoming in June and September, and its inclusion on the FATF list having sparked advisories by the US, UK and European Union (the latter subsequently withdrawn), Mr Turnquest said the Government was working feverishly to address all external concerns.

“One of the criticisms we’ve had is that we’ve not had enough prosecutions according to whatever statistics the FATF seems to be looking at, and we’ve not been able to demonstrate that we have in fact had prosecutions for money laundering activity and we’ve had effective investigations that were fully vetted and closed with some action being taken.

“There are some prosecutions that have happened, and some administrative penalties/remedies instituted. Some have been administratively disposed of because there was no substance behind it...”

Describing the FIU, and related money laundering and terror financing prosecutions as “one of the big weaknesses identified in the evaluation”, Mr Turnquest added: “We are obviously beefing up the FIU. It had been, unfortunately, one of those agencies that was put away in a corner and forgotten about.”

He confirmed that the FIU is implementing a new software system to track all STRs from the time they are reported to whether they are referred to the police for investigation, the outcome of the investigation, and any subsequent prosecutions or if no offence was detected.

The deputy prime minister added that the Government was also seeking to strengthen the FIU’s links and exposure to its counterparts in the Caribbean and internationally, adding: “We’re doing everything we can to ensure our jurisdiction is not used for nefarious purposes.”

Mr Turnquest, meanwhile, said a further $10m was likely to be allocated in the 2019-2020 Budget to help payout CLICO (Bahamas) former pensioners, annuity holders and life insurance policyholders who had let their coverage lapse. This is in addition to the $10m made available this fiscal year, from which two payments have already been made, with the deputy prime minister describing the insolvent insurer’s liquidation as “a long-term issue” now under its third administration and involving “a significant amount of money”.

“We will continue to do this until we wind this whole thing down,” Mr Turnquest said. “We’re doing as best we can to liquidate this as quickly as we can in as much as our finances allow us to do.”

Mr Turnquest said the Government was “watching the pennies as we go to ensure we don’t have a runaway train” as the 2018-2019 fiscal year comes to an end.

He added that it will “exercise as much discipline and restraint as we can” in the upcoming Budget to contain the civil service wage bill without jeopardising the provision of essential public services.

Again giving a “100 percent assurance” that there will be no VAT increase this year, Mr Turnquest added that there was “no intent” on the Government’s part to introduce new taxes such as a corporate or income tax.

He added that the Ministry of Finance was keeping abreast of global tax developments “to make sure we don’t get left behind and have a diminished tax base that can no longer support in terms of services to the public”.

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