The Tribune

By KHRISNA VIRGIL

Deputy Chief Reporter

kvirgil@tribunemedia.net

A UNITED States report on money laundering and financial crimes has pinpointed an alleged black market for “smuggled cigarettes and guns” coupled with money laundering trends, including the purchase of real estate among other things in The Bahamas.

The 2017 report further highlighted that drug traffickers and other criminal organisations take advantage of the large number of international business corporations and off shore banks registered in the Bahamas to launder money despite the existence of transaction reporting requirements.

Given the deficiencies prevalent in the financial services sector, the US report called on the government to place a greater emphasis on enforcing and implementing an anti-money laundering regime.

“The major sources of laundered proceeds are drug trafficking, firearms trafficking, gaming, and human smuggling,” the Bureau for International and Narcotics Law Enforcement Affairs Money Laundering and Financial Crimes March 2017 report read.

“There is a black market for smuggled cigarettes and guns. Money laundering trends include the purchase of real estate, large vehicles, boats, and jewellery, as well as the processing of money through a complex web of legitimate businesses and IBCs registered in the offshore financial sector.

“Drug traffickers and other criminal organisations take advantage of the large number of IBCs and offshore banks registered in The Bahamas to launder money, despite CDD and transaction reporting requirements.

“According to a 2013 report by the IMF, the Bahamas is a ‘major offshore financial centre.’ The offshore sector consists mostly of branches or subsidiaries of global financial institutions. The IMF report notes that, while oversight of the financial system has improved, the Bahamas is still recognised as a significant tax haven. For example, The Bahamas does not disclose in a public registry information about trusts and foundations, maintain official records of company beneficial ownership, require that company accounts be placed on public record, or require resident paying agents to tell the domestic tax authorities about payments to non-residents.”

The report continued: “Casino gaming is legal for tourists and The Bahamas has four large casinos, including a casino in Bimini that draws in customers from the United States via a ferry service to and from Miami. The $3.5 billion Chinese Export-Import Bank-funded Baha Mar Casino and Resort on New Providence Island did not open as scheduled in 2015 or in 2016. When completed, it will be the largest casino in the Caribbean.”

The government should continue to provide resources and training to its law enforcement, judicial, and prosecutorial bodies in order to investigate and prosecute money laundering, the report said.

“The Bahamas should further enhance its anti-money laundering regime by criminalising bulk cash smuggling; continuing implementation of the National Strategy on the Prevention of Money Laundering; establishing a currency transaction reporting system; and implementing a system to collect and analyse information on the cross-border transportation of currency.

“It also should ensure beneficial ownership information of all entities licensed in its offshore financial centre is available upon the request of law enforcement authorities and kept up to date,” the report said.

This comes after another US report highlighted the Bahamas government’s “intimidation of non-governmental organisations” and efforts by the government and authorities to inhibit “free speech through criminal libel laws” as problems for The Bahamas in its latest human rights report.

That human rights report also referenced alleged cases of immigration officials soliciting bribes from migrants and alleged beatings of migrants and prisoners in custody.

The Ministry of Foreign Affairs and Immigration has said the report had “inaccurate” and in some cases “incomplete” information.