The Tribune

Bahamian compliance officers were yesterday challenged to minimise financial services industry risk and protecting the jurisdiction's reputation.

Nearly 150 executives were given this charge when they attended the Bahamas Association of Compliance Officers (BACO) annual money laundering reporting officers (MLRO) day, held at the British Colonial Hilton.

"As money laundering reporting officers our job is to ensure compliance with local laws and regulations through thorough control standards, processes and programmes," said BACO's president, Cheryl Bazard.

She took participants through the regulatory environment, reviewed their responsibilities and offered practical assistance during her presentation, "Ethics, Duty and Your Liability in a Sea of Change - Do You Really Know Your Risk?"

"The chief officer and MLRO (money laundering reporting officer) should be independent and free from influences that may affect his/her ability to perform your duties objectively," Mrs Bazard said. "The ethics comes in when issues arise which could present risk to earnings or capital arising from violations, or non-compliance with laws, prescribed business practices or ethical standards."

Under those circumstances, Mrs Bazard said it is the MLRO's job to ask tough questions and make difficult calls - even if it comes down to choosing between their reputation/character or one's job.

"[MLROs] must be fully conversant with the business affairs and activities of the financial institution, and be able to respond to inquiries from the Inspector of Bank and Trust Companies about all aspects of the financial institution's operations," she said. "Any reported suspicion that a person is engaged in money laundering must be considered in the light of all other relevant information."

The MLRO must also report suspicions - or reasonable grounds to suspect a person is engaged in money laundering - to the Financial Intelligence Unit (FIU), any regulatory agency or the police.

"The money laundering reporting officer will be expected to act honestly and reasonably, and to make his or her determination in good faith when making a decision to file a suspicious transaction report," said Mrs Bazard, the principal of the law firm, Bazard & Company. "No MLRO is expected to be infallible in validating reports of suspicions or deciding whether or not to make a disclosure."

She added that decisions proven to have been wrong do not amount to non-compliance, money laundering or terrorism financing, providing that the reasons for non-disclosure are justified, fully documented and retained with the original suspicious report.