Last week the United States Department of State (DOS) released its 2007 International Narcotics Control Strategy Report (INCSR) in Washington. Under the US Foreign Assistance Act, the DOS is required to release the annual INCSR to the U.S. Congress, describing the efforts of specific countries to combat all aspects of the international drug trade for the previous year. Volume I of the INCSR covers drug and chemical control activities, while Volume II covers money laundering and financial crimes. In the country reports of the INCSR, the DOS spoke to Bahamas developments in each of these areas.
In previous years, the INCSR has praised The Bahamas for working closely with the United States Government (USG) in a bid to stop the flow of illegal drugs through its territory, and this year was no exception. Volume I of the Report states, “In 2006, the Drug Enforcement Unit (DEU) of the Royal Bahamas Police Force (RBPF) cooperated closely with the U.S. and foreign law enforcement agencies on drug investigations, and continued to participate as an active partner in “Operation Bahamas and Turks and Caicos” (OPBAT)–a multi-agency international drug interdiction effort established in 1982.” In Volume II, the Report states that the Government of The Bahamas has enacted substantial reforms to reduce its vulnerability to money laundering and terrorist financing.
In describing the need for the report, the US Embassy in Nassau has pointed out that money laundering finances and facilitates all sorts of illicit activity, from terrorism to narcotics trafficking to white collar crime. In this connection, it is important that the US Government carefully monitors illicit money laundering.
**Country Designations**
Since 2004, INCSR’s money laundering component has assigned countries and jurisdictions to one of three different categories — Jurisdictions of Primary Concern, Jurisdictions of Concern, and Other Jurisdictions Monitored. The designations are based on quantitative criteria and there are no official sanctions or actions taken against countries based on their designations.
“Jurisdictions of Primary Concern” are those countries or jurisdictions that have been identified pursuant to the INSCR reporting requirements as being “major money laundering countries.” The criteria for determining whether a country or jurisdiction should be included in this category do not include a judgment of the country’s anti-money laundering laws or enforcement. It is important to note that the criteria also do not take into account the country or jurisdiction’s legal framework to combat money laundering; its role in the terrorist financing problem; or the degree of its cooperation in the international fight against money laundering, including terrorist financing.
The 2007 Report includes The Bahamas in the list of countries or jurisdictions identified as being of primary concern. The list also includes the United States itself, Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom and some of its Overseas Territories & Crown Dependencies (Cayman Islands, Guernsey, Isle of Man and Jersey).
In this connection, the US Embassy here in Nassau has stated that a government can have comprehensive anti-money laundering laws on its books and conduct aggressive anti-money laundering enforcement efforts but still be classified a “Primary Concern” jurisdiction because of its prominence as an international financial centre. In some cases, the classification may simply or largely be a function of the size of the jurisdiction’s economy or financial sector.
**Bahamas Legislative Regime Highlighted**
In addition to providing details on the extensive anti-money laundering legislation introduced in 2000, the Bahamas Report of the INCSR also spoke to the 2004 Anti-Terrorism Act (ATA), enacted to implement the provisions of the UN International Convention for the Suppression of the Financing of Terrorism. Formally criminalizing terrorism and making it a predicate crime for money laundering, the law also provides for the seizure and confiscation of terrorist assets, reporting of suspicious transactions related to terrorist financing, and strengthening of existing mechanisms for international cooperation.