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Bahamas: Finance Minister Praises New Law Giving Central Bank Governor Extra Powers

Mandy Robinson, Tax-news.com, London

17 November 2000


Earlier this week Tax-news.com reported on proposals for a whole raft of new laws geared towards tightening anti-money laundering regulations within the Bahamas financial services sector and the Minister of Finance William Allen has now commented upon the legislation in an address to the House of Assembly.

In his speech Sir Allen revealed that the Central Bank's Governor will be awarded responsibilities that were previously only performed by himself as part of his role as Minister of Finance - particularly in relation to the issuing and revoking of bank licenses. Under the Banks and Trust Companies Regulations Act 2000, the governor may invalidate the licence of a bank or trust company if it is 'carrying on its business in a manner detrimental to the public interest or the interest of its depositors.'

The new law allows the Central Bank Governor and foreign inspectors to conduct on-site and off-site examinations of the accounts of bank branches or subsidiaries in the Bahamas, although information or documents procured or produced by foreign inspectors cannot be given out without the prior written permission of the Bahamian Inspector (who would be appointed by the Central Bank Governor)

The decision to invest so much power in the Governor, stressed the Minister, was researched and based upon the standards of other countries: 'We have sought to take account of what is happening in other jurisdictions, we benchmarked the legislation in relation to what several other jurisdictions were doing, in particular Canada, Switzerland and Cayman Islands. In making these adjustments to our legislation we took account of what these other jurisdictions were doing and we benchmarked ourselves against them.'

Stating that the legislation reflects international regulations and supervision standards that have developed over the last few years, the Finance Minister said: 'We believe it is in the interest of The Bahamas - if it wishes to continue as an important, international, financial centre - to operate at this level of best practices which is now emerging as the international standard.'

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