Bahamas: PM Returns From Europe Bent On Making Country A "Major Player In The Financial Services Sector"

Mandy Robinson, Tax-news.com, London

18 October 2000

After an "arduous and challenging" month-long mission to Europe, Prime Minister Hubert A Ingraham and his delegation returned to the Bahamas at the weekend. At a press conference held upon his arrival, Mr Ingraham described the purpose of the official visit as encompassing 'discussions with the major groupings in the European capitals about the new financial architecture being developed by the developed world, and to see the extent to which the Bahamas can come into full compliance with that new architecture,' with the result that the Bahamas must be prepared to adopt many legislative changes before shaking off the OECD and FATF.

The good news is that the Bahamas has already made some headway in transforming some of the country's legislation, in particular the Mutual Assistance and Anti-Money Laundering Acts, but Prime Minister Ingraham said there was some way to go before the Bahamas can fulfill its role within the new world economic "architecture". He stated determinedly: 'we are going to be major players in the financial service sector in the future.'

Mr Ingraham announced further plans for laws dealing with anti-money laundering measures. He said a bill would be proposed this week for the setting up of a Financial Intelligence Unit before mid-November this year, which will send out the strong message that the Bahamas intends to cooperate fully with all international financial intelligence units and/or policing organisations in the fight against money laundering.

The Financial Intelligence Unit (FIU), which will be headed by former Deputy Commissioner of Police Wilton Strachan, will have the authority to request a bank to hold the money of an account holder suspected of criminal activity for up to 72 hours while it goes to court for an order to confiscate money or block transactions.'

In addition to legislative changes, the government will introduce changes to the administrative, regulatory and supervisory agencies for the Bahamas' financial services sector.

The prime minister also plans to propose a bill to facilitate international co-operation by the Bahamas in criminal matters. 'Thereafter,' he explained, 'we shall put forward bills that will deal with The Central Bank Act, the Bank and Trust Companies Act, a new Proceeds of Crime Act, and a new act that will deal with regulating the providers of financial services.'

The prime minister argued that no financial institution in the country worth its salt should experience any difficulty meeting the new requirements. The Prime Minister noted that domestic regulators of international banking institutions will undertake on-site inspections in the Bahamas to ensure that their banks operating there 'are compliant with their laws and are being conducted in accordance with their laws.'

During his trip to Europe, Mr Ingraham met with government officials, the heads of banking institutions operating in The Bahamas, and the leaders of the OECD and FATF. He reported that the meetings were all very successful and that his delegation had accomplished its goal of promoting the Bahamas' integrity as a major financial centre by addressing the issues the OECD and FATF had laid out in their reports. He commented: 'they were satisfied that they were dealing with a credible government which was not itself involved in any untoward activity and which itself was seeking to assure that its rules and practices in the financial sector come into compliance with the new evolving world order.'

At the press conference, Mr Ingraham underlined the dire need to embrace the legislative and regulatory changes. If the amendments are not undertaken, he said, the Bahamas will face sanctions from the more powerful and developed countries. 'These are very serious matters with which the Bahamas and other countries will have to come to terms.' He said that there are some jurisdictions which are not making a great effort to come into compliance and which would face sanctions if they did not act immediately. But the prime minister is confident the Bahamas is doing all it possibly can to seek a hasty exit from the blacklist.

'We believe we can meet whatever standards there are in the world because we are no facilitators of criminal conduct. And if we have institutions in the Bahamas that are doing so and if there are businesses that are doing so, we will be on the side of trying to catch and find them out and deal with them.'

Mr Ingraham is, however, aware that there is a possibility that the Bahamas may have to remain on the blacklist longer than it would have hoped. He said: 'we know what the procedure is and the requirements are, and once we are able to comply with all of the requirements we could be removed from the list ... [but] there is no certainty that you will be removed once you comply with each and every requirement, because those who placed you on the blacklist, will also say to themselves and to you, that they would like to see whether or not you mean what you say and that you are not just simply doing this today and tomorrow go back into another habit ... there is no certainty as to precisely when you will be removed from a list.'

Indeed, the FATF announced on 6 October that the Bahamas was one of seven jurisdictions, out of the total of fifteen, to have made "very encouraging" steps in its efforts to be removed from the blacklist - but the FATF said it has no plans to amend the list until early next year.

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