NASSAU, BAHAMAS — Bahamian digital payment solutions provider Kanoo yesterday clarified that it did not open a bank account for the Ministry of Tourism as indicated in an Auditor General’s report into The Bahamas Travel Health Visa program.
The company said in a statement yesterday that as it relates to having a contract with the Ministry of Tourism, it received written confirmation from the Ministry of Tourism on October 31, 2020. The company said it established a Merchant Account consistent with its regulatory requirements for account opening standards.
“The monthly subscription cost of the Merchant Account with Kanoo is $69, which was our standard published rate for a Platinum subscriber on the Kanoo platform,” the company stated.
It continued: “Kanoo did not open a bank account for the Ministry of Tourism. We are licensed to offer “digital currency” accounts as a licensed Payment Service Provider (PSP) in accordance with the Payments Act, 2012 and the Payment Instruments (Oversight) Regulations, 2017.
“As a PSP, Kanoo is mandated by law and the Central Bank of The Bahamas to have a custodial non-interest-bearing bank account with a licensed commercial bank in The Bahamas for the purposes of settlement. All withdrawals from a customer’s Kanoo account are client-driven. Similar to online banking, our clients have password-protected access to their digital currency accounts.”
Auditor General’s report found that contracts for the program were not executed in accordance with the country’s financial regulations. The report tabled in Parliament on Wednesday noted that just over $34 million in gross revenue has been collected from the health visa program, which launched in November 2020.
The report stated: “We noted that the contracts for the BTHV program were not executed in accordance with the financial regulations 1975 Section 21(58), which stated that ‘all awards of contracts for supplies, works and services required by the government in excess of $250,000 shall be made by Cabinet’.”
According to the report, services relative to the program commenced initially with only a verbal agreement, with contractual agreements executed weeks or months later. The auditor general’s report noted that while the Ministry of Tourism did ultimately submit fully executed contracts with the companies involved, there was no contract officially executed with Kanoo.
According to the Ministry of Tourism, the company was brought on due to the urgent need to provide an electronic payment solution for the travel health visa.
The company was paid $456,992.83 between November 2020 and August 2021, according to the report.
The report read: “The opening of the bank account with Kanoo at the Bank of the Bahama is in violation of the Financial Administration and Audit Act, Section 24, which states ‘no person shall open an account with respect to public money with any bank without the written approval of the minster and no bank shall permit an overdraft of any such account unless such overdraft has been authorized in writing by the minister’.”
While the auditor general has asserted that only the minister of finance has the authority to open a bank account on behalf of the government, the Ministry of Tourism contended that Kanoo received written authorization from the management of the ministry to open the bank account on its behalf.
According to the Ministry of Tourism, the Promotion of Tourism Act empowers the minister of tourism to enter into contracts “as the minister may deem necessary”.
The ministry also said it “has always operated accounts into which receipts were disposed and from which disbursements were made using its long-established system of internal controls for paying vendors”.
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