07/04/22

The Bahamas Takes A Step Closer to Compliance with all 40 FATF Recommendations.

Press release from the Bahamas Financial Services Board on Thursday, April 7, 2022.

Today, The Bahamas is compliant or largely compliant in 38 of the 40 FATF Recommendations. As part of its continuing modernization of the country’s international regulatory obligations, the Bahamas Attorney General and Minister of Legal Affairs, Senator The Honourable Ryan Pinder,  introduced amendments to underlying pieces of legislation to ensure compliance with FATF standards to promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and the financing of proliferation, and other related threats to the integrity of the international financial system.

Attorney General Pinder noted during parliamentary debate on the amendments that all of the underlying pieces of legislation were passed to ensure compliance with the anti-money laundering and counter terrorist financing obligations of the Financial Action Task Force (FATF).  The most recent changes were made to The Anti-Terrorism Act, 2018, The Proceeds Of Crime Act, 2018 and The  Register of Beneficial Ownership Act 2018. These amendments considerably strengthen mechanisms for enforcement.

Amendments to The Anti-Terrorism Act, 2018

The Anti-Terrorism Act, 2018 was enacted to implement FATF requirements regarding The Bahamas’ regime for combatting terrorist acts, terrorist financing and proliferation financing; interactions with the United Nations; international cooperation; and enforcement tools. The amendment being proposed empowers The Financial Intelligence Unit (FIU) to impose an administrative penalty on any Financial Institution who contravenes of the Act. This will require  financial institutions to report any property used for commission of offences under the Act. In the original legislation no criminal nor administrative penalty was assigned to this obligation. The amendment will assist the FIU in enforcing compliance with the provisions.

Amendments To The Proceeds Of Crime Act, 2018

The Proceeds of Crime Act, 2018 (POCA) was one of three pieces of primary legislation passed to bolster The Bahamas anti money laundering regime. The amendments to the Act seek to clarify ambiguities, better align with international anti-money laundering standards.  And provides that any document obtained under a production order, is admissible in court.

Register of Beneficial Ownership Amendments

The Bahamian Register of Beneficial Ownership Act 2018 (ROBO) was passed to, “provide for the Competent Authority to establish and maintain an electronic database of beneficial ownership details for all corporate and legal entities registered in The Bahamas and to permit search of the database of every corporate and legal entity registered or resident in The Bahamas by a designated person upon the request of specified authorities designated in the” act.

ROBO provided for the development of a beneficial ownership secured search system (BOSSs). The implementation of the BOSSs brought The Bahamas into compliance with several recommendations and related requirements of the Financial Action Task Force (FATF). The full implementation of the BOSSs was a critical component in terms of the European Union (EU) Anti-Money Laundering Blacklist (AML Blacklist).

The recent amendments to this Act will assist in tightening the provisions and reflect requirements to further comply with international best practices regarding transparency of beneficial information of companies and other legal entities registered and incorporated in our country. The amendments  define law enforcement authority and Supervisory Authority as this was not included in the original legislation. It further imposes a duty on legal entities and registered agents to ensure that the information provided or recorded in the Bill is accurate.

The Bahamas Gaming Board and the Ministry of Finance have been added to the list of agencies that can  request a search of the secure search system. Requests for searches by the Ministry of Finance must only be made in carrying out its duties under the International Tax Cooperation Act and the Automatic Exchange of Financial Account Information Act and are not permitted to undertake fishing expeditions.  An administrative penalty regime has been added to this legislation as well  bolstering enforcement tools and aiming to deter non-compliance.

Next Steps

The Office of The Bahamas Attorney General will be submitting a re-rating of the final 2 of the 40 Recommendations to the CFATF – one addressing Not for Profits, and another addressing the effective regulation and supervision/monitoring of virtual asset services providers, working with the Securities Commission of The Bahamas on the latter.   The intent of these latest changes is to ensure compliance with all 40 of the FATF Recommendations.

References:

Legislation passed to further strengthen AML/CFT regime - The Nassau Guardian