The Bahamas Attorney General and Minister of Legal Affairs said The Bahamas’ determination to root out any dirty money is not only based on its international commitment to do so, but also the Government’s positive belief that financial services professionals in The Bahamas and the financial services sector have a legitimate role to play in the international financial community.
Speaking to private wealth managers and intermediaries who were in The Bahamas for the Bahamas Financial Services Board’s (BFSB) annual Bahamas Briefings Sessions, the Hon. Claire Hepburn said “It is as important for us as a government as it is for you as private wealth managers, to ensure that we are seen as prudentially regulated and free of the twin vices of money laundering and terrorist financing.”
She added, “The Government of The Bahamas of course is also committed to ensuring that its legislatively imposed regulatory environment does not go so far that it stifles legitimate business, or that it places your business at a competitive disadvantage as against other financial centres. We recognize that in order for you to be competitive, and internationally and domestically compliant, you need to be regulated, but not over regulated. We also recognize that a necessary component of this regulatory environment is an effective, competent and independent judiciary equipped with the necessary resources to adjudicate, when called upon to do so, cases which impact the financial services industry, and to interpret our financial services legislation.”
Since 2000, in response to initiatives by various multinational agencies, there has been constant review of legislation to ensure The Bahamas remains compliant with international standards and best practices. As a result, several of the pieces of legislation, which were enacted in 2000, have now been amended and additional laws enacted to criminalize money laundering (based on the expanded definition of ML) and terrorism financing.
The Minister said the basic objectives of the Government’s strategy have been to:
- protect the reputation of The Bahamas as both a responsible and reputable international financial centre
- prevent the use of the banking system for criminal purposes;
- prevent de-stabilization of the domestic economy while promoting legitimate economic activity;
- anticipate and implement effective counter measures to new/emerging trends in money laundering, terrorism financing and related activities; and
- assist relevant authorities in other countries in fighting money laundering and terrorism financing through appropriate and timely sharing of information.
Minister Hepburn indicated that another significant initiative in 2000 was the establishment of the International Legal Cooperation Unit (ILCU) in the Attorney General’s office which is responsible for dealing with all requests for legal assistance from foreign jurisdictions. She outlined several pieces of legislation that allow the ILCU to deal with requests:
The Mutual Legal Assistance (Criminal Matters) Act 1988 governs requests for legal assistance in criminal matters from the United States of America, Canada and the United Kingdom, all of whom have entered into Mutual Legal Assistance Treaties (MLATS) with The Bahamas.
The Criminal Justice (International Cooperation) Act allows the Attorney-General to render assistance to courts or tribunals exercising criminal jurisdiction, prosecuting authorities, or any other authority which carries out such functions in countries that do not have a Mutual Legal Assistance Treaty with The Bahamas.
The Proceeds of Crime Act criminalizes the concealment of the sources and ownership of ill-gotten gains, provides for its forfeiture and for international cooperation in the prevention of money laundering. The Supreme Court of The Bahamas is empowered by the Act to make restraint orders and forfeiture orders in respect of the proceeds of crime, which may have been found within The Bahamas. As a result, financial institutions are now required to strictly apply their KYC provisions, in order to ensure that undesirable persons do not have access to the country’s financial services sector.
Financial Transaction Reporting Act imposes obligations on banking officials and other financial operators, to make reports of suspicious transactions to a special investigative body set up for the purpose of receiving such reports, the Financial Intelligence Unit. As a statutory body, the FIU is empowered to conduct its own investigations and to take certain actions as a result, including the pro-tem freezing of accounts to enable it to complete its investigation.
The International Obligations (Economic and Ancillary Measures) Act allows The Bahamas to give effect in domestic law to economic sanctions such as those required by the Security Council. For example, an order pursuant to this Act was executed in 2001, which resulted in the freezing of US$32 million in The Bahamas, though the money was later released as no suspected links to terrorism were found. This example illustrates the fact that The Bahamas has put in place the legal infrastructure that allows it to respond to its international obligations, but in a way that does not prejudice the rule of law.
“The enactment of this legislation shows that the Government of The Bahamas is committed to meeting its international cooperation obligations,” said the Minister, “and has insisted that judicial requests for assistance, processed through the Office of the Attorney General, and regulatory requests processed through the respective regulatory agencies in The Bahamas, are processed expeditiously, within the framework of regulatory requirements, due process considerations and institutional capacity.”