The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas must achieve “perfection” and “40 out of 40” total compliance with anti-financial crime standards given the double standards often employed against it, the Attorney General said yesterday.

Ryan Pinder, addressing the Senate on a package of financial services law reforms, said this nation will be “in a class of only two countries in this hemisphere” should it be rated as ‘compliant’ or ‘largely compliant’ with all 40 recommendations issued by the Financial Action Task Force (FATF), the global standard setter in combating anti-money laundering and terror financing.

The Bahamas was found either largely or fully compliant with 38 of the FATF standards in a December 27, 2021, report by the latter’s regional affiliate, with the two outstanding areas being the regulation of non-profit entities and oversight of digital assets providers.

Mr Pinder said The Bahamas hopes to apply to be re-rated in both these areas in May 2022, adding that while compliance with 38 of the 40 standards was “an important achievement” it was “more important that we be 40 from 40”.

This was brought home to him during a meeting with the European Commission’s representative to The Bahamas, when she asked why it took three to six days to open a bank account in Brussels but 30 to 60 days in this nation and the wider Caribbean.

“I explained that, one, there’s double if not triple standards in this matter,” Mr Pinder said, noting that even though The Bahamas was near-perfection with its FATF compliance it was still considered “high risk” by many institutions because the EU had come out with its own standards.

Pointing out to the EU representative that the 27-nation bloc bore significant responsibility for the bank account opening difficulties faced by The Bahamas and Caribbean, Mr Pinder said: “I explained we must achieve 40 for 40 compliance even though the vast majority of the world does not, and I think there are only three-four countries in the world that do.”

The Bahamas, he added, must achieve “excellence and perfection in this regard because it filters down to our people, and filters down to them having a normal life in the financial environment here and around the world. Even though the vast majority of Bahamians do not understand the connection, those in charge like myself understand we must do this for the betterment of daily life and ease of doing business”.

Non-profits will be rated according to the risk they pose, with larger entities that engage in cross-border transactions, have foreign donors and support charitable activities outside The Bahamas facing greater scrutiny than the likes of churches that receive smaller amounts and deal strictly in Bahamian dollars.

“Achieving compliant and largely compliant ratings for all 40 recommendations would put The Bahamas in a class of only two countries in this hemisphere,” Mr Pinder said. “It will demonstrate The Bahamas is committed to excellence in financial services and Fintech, and will position The Bahamas for growth of good business in growing elements of the international financial services industry.”

The Caribbean Financial Action Task Force’s (CFATF) late 2021 assessment referred to the Digital Assets and Registered Exchanges (DARE) Act, and said: “The Securities Commission has not established guidelines in relation to the DARE Act which will assist all virtual asset service providers in applying national measures to combat money laundering and terrorist financing, and, in particular, in detecting and reporting suspicious transactions.”

The Securities Commission has moved to address this via the publication of the necessary rules now out for consultation. However, the CFATF also raised concerns about its ability to identify unregistered persons operating in contravention of the DARE Act. “The Bahamas submitted the Securities Commission has established robust processes by which the Commission is able to identify unregistered persons engaged in activities regulated under DARE,” the report said.

“These processes include: The ability of the public to file complaints with the Securities Commission and the Securities Commission following up with investigations; the Securities Commission’s own surveillance and enforcement programme identifying potential unregistered persons and investigating them; and in cases where it is determined that unregistered persons may be carrying out registrable activity, public notices are issued, and a criminal complaint is filed with the police. However, procedures to reflect these measures were not provided.”