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Anti-Money Laundering & Counter-Terrorist Financing Measures

July 2017

This report provides a summary of the AML/CFT measures in place in The Bahamas as at December, 2015. It also assesses the level of compliance with the Financial Action Task Force (FATF) 40 Recommendations and the level of effectiveness of The Bahamas’ AML/CFT system, and provides recommendations on how the system could be strengthened.

Key Findings

• The Bahamas is still completing its Money Laundering/Terrorist Financing National Risk Assessment (NRA) and has yet to develop documented national AML/CFT policies. Nevertheless, there is a reasonable understanding of ML/TF risks among competent authorities on account of the NRA exercise.
• The Financial Intelligence Unit (FIU) is a well-structured and resourced unit and the financial intelligence disseminated by the FIU is generally of good quality. However, no money laundering convictions have occurred for the last four years and only one money laundering case has been brought before the courts as at December, 2015.
• The Bahamas has assessed its Terrorist Financing risks as low. There have been no TF investigations, prosecutions, confiscations or convictions. The legislative framework for targeted financing sanctions (TFS) and proliferation financing is deficient.
• Financial Institutions (FIs) and designated non-financial businesses and professions (DNFBPs) are overall well aware of their regulatory AML/CFT obligations and apply quite strong customer due diligence (CDD) procedures as well as other mitigating measures in a highly rule-based manner. However, a large number of unverified facilities in the domestic banking sector still exist.
• FIs that are not part of a large international group did not demonstrate sufficient awareness of their specific inherent ML/TF risks. They had not performed an institutional ML/TF risk assessment to define the specific risks with regard to their operations, environment, products etc.
• The number of suspicious transactions reports (STRs) filed by financial institutions is limited, given the size of the financial sector and the diversity of activities. More emphasis should be put on guidance reporting and on the feedback provided to the reported STRs.
• The FIs and DNFBPs supervisory regimes are comprehensive and well developed. Supervisory powers are in general adequate and co-ordination among supervisory regulators works well. However, the application of sanctions is too limited. A risk-based approach for the credit unions and the securities industry should be implemented.
• A variety of legal persons can be created in The Bahamas. The Registrar General maintains the national companies register. Beneficiary ownership (BO) information is required to be maintained by FIs and registered agents. No sanctions have been imposed on legal persons.
• The Bahamas has a well-functioning system for international co-operation which provides constructive mutual legal assistance (MLA) and extradition. International co-operation is facilitated through agreements, memoranda of understanding (MOUs) and asset-sharing protocols. The time to respond to requests can be improved.