NASSAU, BAHAMAS- Attorney General Ryan Pinder, during a financial services industry briefing, provided insights into the Bahamas’ National Risk Assessment and the forthcoming revisions to FATF Recommendations 24 and 25, highlighting the country’s ongoing efforts to enhance its anti-money laundering framework.
The Attorney General noted that The Financial Action Task Force (FATF) sets global AML standards embodied in the 40 Recommendations. Recommendation 1 is foundational to complying with the other 39 recommendations and mandates countries to undergo money laundering risk assessments. The finalized NRA report addresses this requirement and allows The Bahamas to comply with the critical criteria of Recommendation 1 of the FATF 40 Recommendations.
“Due to the vast volume of business conducted for international clients and The Bahamas’ openness as an international transhipment hub, the country is exposed to inherently high cross border ML risks. The more vulnerable sectors are those which are internationally oriented and cash-intensive operations. These include retail and private banks, trust companies, credit unions, money-transmission providers, corporate service providers, securities firms, casinos and gambling house operators,” said Pinder.
He noted that the Anti-Money Laundering regime in The Bahamas is implemented and overseen by 11 government agencies supported by the Ministry of Finance, Ministry of Economic Affairs and Ministry of Foreign Affairs, three self-regulatory bodies and trade organizations. The inherent risks identified are being addressed through domestic and international policy coordination; the prevention and detection of ML in The Bahamas; disruption activities, including investigation, prosecution, and the seizure of illicit assets; and the implementation of measures to ensure the ongoing improvement of the anti-money laundering regime.
Pinder also noted that The Bahamas has made tremendous progress in its AML efforts. He pointed out that in December 2020 and January 2022, The Bahamas was delisted from the Financial Action Task Force’s List for Jurisdictions Under Increased Monitoring (Grey List) and the European Union AML Blacklist respectively. He further noted that the country has strengthened and enhanced its legal, regulatory, and enforcement AML framework by enacting a suite of laws in 2018 and has improved and maintained the AML and prudential regulatory environment for financial institutions and related financial sector service providers and designated non-financial businesses and professions.
On December 22, 2022, with the publication of the Bahamas’ CFATF Follow-up report, it was announced that The Bahamas had obtained compliant or largely compliant ratings with 40 of the 40 FATF Recommendations. At that time, The Bahamas became the 2nd jurisdiction in the Caribbean and the Americas to attain such a position and only the 6th in the FATF’s Global Network of 206 jurisdictions.
“Now we start to prepare for our 5th round of mutual evaluations, this briefing and our National Risk Assessment being the first step of that process,” he noted.
The national risk assessment (NRA) process involved extensive stakeholder engagement, covering financial and non-financial service providers, and representatives from both the public and private sectors. The NRA was largely conducted by members of the Identified Risk Framework Steering Committee (the IRF Steering Committee). The IRF Steering Committee is charged with assisting in the identification of national-level vulnerabilities and threats to protect our financial system from misuse from money laundering, terrorist, and proliferation financing. It is comprised of senior representatives from government, regulatory and law enforcement agencies, and government ministries (Foreign Affairs, Finance, and Economic Affairs), and is steered by the Attorney General (AG) of The Bahamas.
This NRA process serves to enhance and deepen the awareness and understanding of The Bahamas’ ML threats and vulnerabilities and focus resources to address identified gaps in our AML regime, including laws, regulations, and guidance/codes as well as supervisory and enforcement frameworks.
“The Government of The Bahamas has conducted this risk assessment to identify current inherent money laundering risks in The Bahamas. The assessment will be updated periodically in keeping with international best practices leading up to our 5th round mutual evaluation. This briefing provides an overview of the ML risks before and after the application of any mitigation measures, which include a range of legislative, regulatory, and operational actions to prevent, detect and disrupt ML. This risk assessment also includes an assessment of the ML threats and ML inherent vulnerabilities in key economic sectors and financial products in The Bahamas,” said Pinder.
He added: “Encouragingly, the national risk assessment has found that authorities have put in place substantial preventative measures and are continuing to review and update their regulatory and supervisory regimes. To better manage cross-border ML risks, The Bahamas has entered into Mutual Legal Assistance Treaties (MLATs) and established other formal cooperation channels through legislation for both supervisory and law enforcement purposes. This framework for international cooperation is continually being strengthened to tackle new and emerging ML threats,” said Pinder.
According to Pinder, it is intended that most actions should be substantially completed by mid-year 2025 to give the country a clear 6 – 9 months to show that any amendments to laws, regulations, policies, and procedures were implemented effectively in preparation for our 5th round mutual evaluation.
