The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An ex-attorney general yesterday urged The Bahamas to "urgently remediate" what diplomats confirmed as this nation's blacklisting by an "intransigent" European Union (EU).

Acknowledging that The Bahamas was "a bit of a victim of circumstance" after COVID-19 prevented the Financial Action Task Force (FATF) from conducting an on-site visit as the last step in exiting its monitoring list, John Delaney told Tribune Business that the EU move could impact financial transactions involving individuals and clients with connections to this nation.

Apart from the likely increased scrutiny that banks in the EU's 27 nations will apply to Bahamas-linked money movements, the now-Delaney Partners law firm chief said the blacklisting could also impact already-pressured correspondent relationships that local institutions have with their overseas counterparts and damage this nation's reputation.

"It makes it more difficult for us to trade in that space globally. I hope it's something that is remediated urgently," Mr Delaney told this newspaper, adding that the EU's move was also likely designed to blunt The Bahamas' competitiveness in international financial services.

"I think that there is a legitimate case to be concerned as it relates to fair play as to whether the standards being applied to The Bahamas are evenly applied in the EU, and outside of the EU to other states that have good relations with the EU," he added.

"What's particularly concerning about this is the apparent subjectivity in the adherence to the level playing field, so one cannot help but fear there's unfairness and the decision-making might be skewed by matters of trade and competition, meaning to lessen the competitiveness of jurisdictions such as The Bahamas. Clearly it has the effect of making us less competitive by damaging the brand's reputation."

The EU yesterday confirmed The Bahamas' inclusion on a list of nations deemed to have deficiencies in their anti-financial crime defences, which makes it "high risk". A key reason for The Bahamas' inclusion was its presence on the FATF's monitoring list, which this nation had hoped to escape prior to yesterday until COVID-19 intervened to delay that body's on-site visit and inspection.

The Bahamas' embassy to the EU, in a statement yesterday, said it had "exhausted all diplomatic channels" in trying to persuade an "intransigent" 27-nation bloc not to proceed in naming this nation. It added that the EU is applying standards more stringent than the FATF, the recognised global authority on anti-money laundering and counter terror financing, for The Bahamas to escape its list.

"The EU Commission in identifying 'high risk' third countries employs a two-prong methodology which is firstly premised on countries identified by the FATF and, secondly, countries will be assessed autonomously by the EU," the Bahamian embassy said.

"Taking into account the employed methodology, The Bahamas by extension was predisposed to its inscription on the list of 'high-risk third countries' as a result of the FATF listing. The EU, in its identification process of 'high-risk third countries', has also stipulated the format for consideration to be given for a country to be delisted.

"Firstly, a country initially identified by the FATF and having taken the necessary corrective measures is delisted by the FATF. Secondly, the EU will undertake an assessment and confirmation of the information from the FATF, and thirdly, countries assessed autonomously by the EU will undergo three stages of analysis which will include information from the FATF and other sources for delisting to occur."

The EU will not consider The Bahamas for de-listing until removed from the FATF process. "As a nation, The Bahamas must prepare for a strengthened and coordinated EU approach to preventing money laundering and terrorism financing," the embassy added.