Bahamas And US To Work Together On Money Laundering

Naturally concerned at the effect of both the FATF report and the US advisory on the Bahama's financial industry, the Bahamas government appears to have elected to co-operate with the US in seeking to remedy "without delay" money laundering deficiencies, according to a statement from the Cabinet Office at the end of last week. The government said it would accept "a generous offer" of technical assistance from the US Treasury Department with the ultimate aim of complying with identified international standards and thereby a removal from the FATF blacklist and US advisory list.

The statement from the Cabinet said 'the Bahamas is resolute and determined in its stance against money laundering, drug trafficking, corruption, and criminality in all its forms. This advisory requires that enhanced scrutiny be given to suspicious transactions emanating from financial institutions in The Bahamas. The government of The Bahamas regards the blacklisting of The Bahamas by the FATF and the issuance of the advisory by the United States as serious and harmful to our status as a financial centre.'

The advisory issued against the Bahamas said that, among other things, the set-up for countering money laundering suffered from a number of problems, notably that the Bahamas' supervisory system does not include rules for the reporting of suspicious transactions by financial institutions; banks in the Bahamas are not required to verify the identity of bank customers for whom Bahamian lawyers or certain other intermediaries open accounts and that the Bahamas remains committed to strict banking secrecy, outside of a limited suspicious transaction reporting and international co-operation regime. The US has emphasised, however, that the issuance of the advisory, plus the need for greater scrutiny, 'does not mean that the US financial institutions should curtail legitimate business involving the Bahamas'.

The Bahamas has undoubtedly taken a bit of a battering of late from all corners - first the FATF report, then the OECD list of "harmful tax havens" and now the issuance of the US advisory. In fear of sanctions which would have a profound effect on its financial services industry, what else can the Bahamas government do but to say it is "working diligently" to correct all identified deficiencies? Indeed, a number of legislative steps to address failures in the Bahama's laws and anti-money laundering system will be introduced in the House of Assembly next month. The government reiterated its co-operative stance, saying it is 'taking urgent steps toward having The Bahamas’ name removed from the FATF blacklist and the US advisory and is currently consulting widely to determine the most appropriate course of action to achieve that end.'