EU lists Bahamas as having weak anti-money laundering, terrorist financing regimes

EU lists Bahamas as having weak anti-money laundering, terrorist financing regimes
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AG to address matter with EU Commissioners


NASSAU, BAHAMAS – Another black eye for the country’s financial services sector on Wednesday, following a scathing review by the European Union College of Commissioners which listed The Bahamas among high-risk countries for Anti-Money Laundering and Counter Terrorism Financing (AML/CFT) deficiencies.

Apparently, the international body believes that The Bahamas has some work to do in regards to cracking down on the regulatory framework to ensure that money laundering and terrorism financing is eliminated

The Attorney General’s (AG) office responded to the listing via a press statement issued on Wednesday afternoon.

The AG’s statement suggested that the listing is allegedly based on a perception that the listed countries pose a “threat” to the EU’s financial system.

The statement also suggested that the country was listed, “based on the FATF’s listing of The Bahamas and its placement of The Bahamas into an Action Plan.”

The Bahamas was placed on the action plan back in October 2018.

But, the AG’s office asserted that the country made significant progress in adhering to the requests outlined in the action plan.

“Since the implementation of the FATF Action Plan, The Bahamas has been re-evaluated as being Compliant or Largely Compliant with 30 of the FATF’s 40 Recommendations,” the statement noted.

Based on the improvements made, the AG’s office said that the listing by the EU Commissioners is “not a proportionate response.”

“The principle of proportionality is a fundamental tenet of EU law and the common law. It simply imports that the punishment should fit the offence,” the statement outlined.

“To list a country, such as The Bahamas, that has made outstanding progress, in just over one year, in addressing the AML/CFT deficiencies identified in May 2017, together with wholly non- compliant, war-torn or even rogue states is disproportionate, and inflicts harm and punishment on a people with no regard for their important reforms and improvements in their AML/CFT framework.

“Such a ‘one size fits all’ approach is unworthy of established democracies, and is an affront to their own legal principles.

The AG’s office said the listing is not a proportionate response and government will seek to encourage the EU commissioners to reverse their decision.

“We will seek all ways to ameliorate and, if possible, encourage the EU Commissioners to reverse their decision,” the statement concluded.

The European Commission’s press statement released on Wednesday said the aim of the list is to protect the EU financial system by better preventing money laundering and terrorist financing risks.

“As a result of the listing, banks and other entities covered by EU anti-money laundering rules will be required to apply increased checks (due diligence) on financial operations involving customers and financial institutions from these high-risk third countries to better identify any suspicious money flows,” the EU said.

Last December, parliament passed a package of financial sector reform bills aimed at meeting more stringent requirements of international financial regulatory bodies.

The bills included: the Penal Code (Amendment) Bill, the Removal of Preferential Exemptions Bill, the Commercial Entities (Substance Requirements) Bill, the Register of Beneficial Ownership Bill, and the Non-Profit Organizations Bill.