A whole raft of new laws geared towards enhancing the Bahamas' anti-money laundering and financial supervisory legislation have been under discussion this autumn, and this week it was the turn of the Banks and Trust Companies Regulation Act 2000, which has been debated in the House of Assembly.
The Banks and Trust Companies Regulation Act 2000 makes fresh provisions for the regulation of banking business and trust business within the Bahamas. It follows legislation for the establishment of a new Financial Intelligence Unit and for a new Criminal Justice (International Cooperation) Act.
Finance Minister Sir William said the present Banks and Trust Companies Act does not make adequate provision for penalties and fines. Under the proposed new law, persons who carry on trust and banking business without the proper licences would be liable to a fine up to U$100,000 and six months imprisonment.
Moreover, the Governor of the Central Bank would be given the power to appoint an Inspector of banks and trust companies to review the practice of companies and to conduct on-site examinations and off-site supervisions. What is particularly significant in all of this is that outside inspectors from foreign jurisdictions will be allowed to come in and inspect the accounts of branch banks to ensure that adequate risk management systems are in place and to ensure that branches are in reliable (and trustworthy) hands.
The new law seeks to introduce a new era in cross-border supervision but does retain some elements of banking confidentiality. Principally, information or documents procured or produced by foreign inspectors cannot be given out without the prior written permission of the Bahamian Inspector.
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