Out of all the jurisdictions blacklisted as 'harmful' tax havens by the OECD and 'unco-operative' in the global fight against money laundering by the FATF, the Bahamas has introduced the most comprehensive new legislation into its financial services sector. But this is still not enough for the multilaterals, as the FATF has identified a crucial element the Bahamas government has omitted in its extensive legislative programme.
The Bahamas Journal has reported this week that the FATF has called upon the Bahamas government to correct legislative deficiences it has discovered in the country's securities market, namely the Securities Act, the Mutual Funds Act and the Insurance Act. This has come as a real setback to the Bahamas which is so close to coming off the blacklist, but if the jurisdiction refuses it could risk staying on the blacklist of 15 jurisdictions which it has so long fought to be free of.
The newspaper quotes a leading source in the Bahamas' securities industry, who says: 'It is like a moving target, every time we think we are home free, they keep changing the rules. The government acted with too much haste enacting those other laws.'
The FATF says provisions in the Securities Act, the Mutual Funds Act and the Insurance Act still allow for secrecy and need to be amended to ensure for cooperation in investigating suspected money laundering activities.
Executive Secretary of the FATF, Patrick Moulette, said: 'The FATF's policy is that anti-money laundering measures should apply not only to banks but also to non-bank financial institutions like remittance businesses, insurance companies and securities businesses.'
Perversely, the FATF, in its recent progress review meeting, voted the Bahamas as one of seven jurisdictions most likely to be removed from the blacklist in the near future - now the jurisdiction is in the frustrating position of being so close yet so far away from freedom.
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