The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The prime minister yesterday slammed the “flawed process” that resulted in the European Union (EU) branding The Bahamas as a “high risk” jurisdiction for financial crimes.

Dr Hubert Minnis’ office, in a statement, argued that there were “several deficiencies” in the approach taken by the 28-nation bloc to including this nation on a list of 23 countries deemed to have major weaknesses in their anti-money laundering and counter-terrorism financing defences.

In particular, it said the EU’s decision was based on outdated and inaccurate information, while adding that The Bahamas was never given an opportunity to respond to a process that appeared to violate the group’s own “methodology”.

Backing last week’s response by Carl Bethel QC, the attorney general, the Prime Minster’s Office said the EU only informed The Bahamas that it might be included on the “high risk” list on January 21 - just 23 days before this was confirmed.

Saying that it “regrets this decision”, the government statement said the EU used “old criteria” and failed to account for the Bahamas’ progress in addressing concerns identified by the Financial Action Task Force (FATF), the global standard-setter in the fight against money laundering and terror financing (AML/CFT).

The Bahamas is currently being monitored by the FATF as it addresses weaknesses in its anti-financial crime defences, and this process was cited as the key reason for the EU’s decision to include this nation on its “high risk” list.

The Prime Minister’s Office, disclosing that the move was driven by the EU’s Justice and Consumers Unit, which deals with financial crime, said: “The Bahamas was informed that the unit was advised that The Bahamas does not have any law that criminalises money laundering or terrorism financing. This is not accurate.”

The same EU unit was also critical of The Bahamas’ failure “to prosecute all types of money laundering, but does not consider the increase in money laundering prosecutions and convictions”.

Suggesting that the EU had failed to conduct an in-depth review of the impact of its actions, the Prime Minister’s Office added that The Bahamas was not given adequate warning of the EU’s intentions.

“Listing The Bahamas together with wholly non-compliant, war-torn states is disproportionate and inflicts harm and punishment on The Bahamas without consideration for reforms and improvements in the AML/CFT framework,” Dr Minnis’s office said.

“The Bahamas poses no threat to the EU financial system, and regrets this action by the EU, especially in light of it being based on out-of-date information. The Bahamas stands ready to meet its international obligations and has shown a willingness and ability to work constructively in this regard.”

The Prime Minister’s office emphasised that The Bahamas’ inclusion was not a “blacklisting”, but it could result in increased scrutiny of financial transactions involving this nation if approved by EU members in 30 days’ time.

It also pointed out that The Bahamas’ inclusion on the EU’s “high risk” list is separate and apart from the same bloc’s offensive against countries found “uncooperative” in the fight against tax evasion, for which this nation passed further legal reforms last week.

Besides The Bahamas, the other countries on the EU list are Afghanistan; American Samoa; Botswana; Democratic People’s Republic of Korea (North Korea); Ethiopia; Ghana; Guam; Iran; Iraq; Libya; Nigeria; Pakistan; Panama; Puerto Rico; Samoa; Saudi Arabia; Sri Lanka; Syria; Trinidad and Tobago; Tunisia; the US Virgin Islands; Yemen.

This is not company that The Bahamas, with its status as an IFC and international business centre, should want to keep given that many of the others are either war-torn, rogue states, suffer from corruption and other ills, or have little economic track record to speak of.