The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas is aiming to be “40 out of 40” and achieve near-total compliance with global anti-financial crime standards this year, the attorney general said yesterday.

Senator Ryan Pinder told Tribune Business the jurisdiction was aiming to “take the last strides” to meet the Financial Action Task Force’s (FATF) so-called ‘40 recommendations’ after its regional affiliate found The Bahamas was either largely or fully compliant with 38 of the standards in a December 27, 2021, report.

The Caribbean Financial Action Task Force’s (CFATF) assessment meant The Bahamas “can boast” of “one of the highest compliance ratings on the region” when it came to meeting global anti-money laundering and counter terror financing standards, Mr Pinder told the opening of the legal year, adding that it was “something we should all be proud of”.

In a subsequent interview with this newspaper, he said the Government was hoping to achieve compliance with all 40 at some point in 2022. “We hope to make the last strides to become ‘largely compliant’ or ‘fully compliant’ in the full 40 recommendations this year,” he said. “We are leaders in the region in compliance with the full 40 FATF recommendations.

“There’s a lot of moving parts and a lot of multinational bodies that impose obligations on you. We have an entire division at the Attorney General’s Office dealing with that, and that’s all they work on. We think we are well on our way to meeting those obligations. We are looking to put in place what needs to be in place to be 40 out of 40, and are working day in, day out to get there.”

Mr Pinder said he understood The Bahamas may be reviewed again by the likes of the CFATF as early as the 2022 first quarter end, adding that the Government was working closely with financial services regulators and the private sector to implement a framework that “satisfies” it and the parent FATF.

The CFATF report, which has been seen by Tribune Business, reveals that one of the two areas where The Bahamas is deemed to be only “partially compliant” - and, indeed, where it was downgraded in the latest assessment, was a category that it hopes will be a major growth driver - digital assets.

Justifying its actions, the CFATF 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 CFATF, which is the Caribbean affiliate of the global standard-setter on anti-money laundering and counter terror financing, also raised concerns about the Securities Commission’s 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.”

Christina Rolle, the Securities Commission’s executive director, last night said the regulator was “well on our way” to addressing the concerns highlighted by the CFATF. “We need to do a risk assessment in the virtual assets space,” she told Tribune Business. “We’re currently doing that assessment and expect to conclude that by March this year.”

Ms Rolle said the regulator typically issued anti-money laundering and counter terror financing guidelines for all sectors that it supervised, such as the securities industry and investment funds, and added: “We have to do the same thing for DARE. We’re in the final stages of drafting those rules, and expect to issue them for public consultation by the end of this month.”

The only other area where the Bahamas was rated “partially compliant” relates to its regulation of non-profit (NPO) entities such as charities. “There was no evidence to demonstrate work with NPOs to develop and refine best practices to address terrorist financing risk and vulnerabilities,” the CFATF report said.

“Also, whilst there is an obligation to maintain financial records under Section 9 of the NPO Act, there was no specific mechanism to encourage NPOs to conduct transactions via regulated financial channels wherever feasible.”

The report added: “There is no evidence that the registrar utilises a risk-based approach to supervision or monitoring. The Bahamas indicated that upon completion of the risk assessment of the remaining NPOs (only 152 out of 685 had been risk assessed at the time of submission), those NPOs deemed high risk for will comprise the sub-set of NPOs for vigorous oversight in accordance with the FATF recommendations. No documentation to this effect was provided.”