Nassau, The Bahamas …With the introduction to Parliament last week of the Financial Intelligence Unit Bill and the Criminal Justice (International Co-operation) Bill, The Bahamas has brought increased focus on its ongoing program of legislative and regulatory reform, addressing a range of issues which have been the subject of comment by international agencies such as FATF and FSF.
The program has included a series of consultations and meetings with heads of banking institutions operating in The Bahamas as well as with officials in Canada, the U.S., Western Europe and the U.K.
Prime Minister Hubert Ingraham said additional administrative, regulatory and supervisory changes will ensure The Bahamas remains a "major player" in the international financial services sector – and specifically will accelerate the process of removal from the FATF's blacklist.
FATF has recognized the substantial progress that has been made by The Bahamas in addressing many of the regulatory and administrative issues that have been the subject of its review.
FATF announced that a decision would be made early next year as to whether The Bahamas – along with several other countries – would be removed from the blacklist following a series of concrete measures taken by each to address specific concerns identified by the international organization.
Bahamas Financial Services Board (BFSB) Chairman Ian Fair has indicated that industry leaders remain optimistic that The Bahamas will "exit" the list once all new legislative initiatives are implemented and will, thereafter, continue to build on its strengths as a leading financial center.
Prime Minister Ingraham has insisted on a process which is fair, transparent and capable of producing a common international standard for all cooperating onshore and offshore financial centers.
However in reporting to the Bahamian Parliament on the meetings Prime Minister Ingraham said, " I expressed serious reservation with a process that permitted member states of the OECD, many of whom are direct competitors in the delivery of financial services internationally,to stand in judgement of financial centers like The Bahamas while not meeting the same standard, or committing to meet the standard demanded of offshore centers under threat of sanction."
The banking system in The Bahamas will have to come into compliance with new international regulations and requirements, but the Prime Minister noted that no reputable financial institution in the country should experience any difficulty meeting these new requirements.
When the legislative agenda and new administrative and supervisory processes presently being introduced by the Central Bank of The Bahamas are adopted, the Bahamas' financial services sector will be in full compliance with international standards and practices.
The legislative agenda over the next several weeks includes:
- a Central Bank of The Bahamas (Amendment) Act, 2000
- a Banks and Trust Companies Regulation (Amendment) Act, 2000
- a Banks (Amendment) Act, 2000
- a new Proceeds of Crime Act, 2000
- a new International Business Companies Act, 2000
- a new Financial Service Providers Act, 2000
- a new Financial Transactions Reporting Act, 2000
- a Mutual Legal Assistance (Amendment) Act, 2000
To date legislative amendments have been enacted and entered into force as follows:
- an amendment to the Money Laundering (Proceeds of Crime) Act, strengthening the requirement for the reporting by financial institutions and others of suspicious transactions to include the necessary reporting of unusual transactions,
- the enactment of a new Evidence (Proceedings in Other Jurisdictions) Act, replacing the Foreign Tribunals Evidence Act, 1856. The new Act places The Bahamas in a position to live up to its obligations under International Conventions to which it is party, permitting evidence to be obtained in The Bahamas for use in proceedings in other jurisdictions in respect of matters pending before a Court or in respect of matters where proceedings are contemplated before that Court and for which investigations have commenced.
The Bahamas has also executed an agreement with the IMF to conduct an independent assessment of its financial services sector. It is expected that member states of the OECD will also submit their financial services sectors to similar independent assessment by the IMF. " We welcome this development," said Barry Malcolm, Executive Director of the BFSB. " We believe the IMF assessment and the implementation of resulting recommendations will remove any question of the compliance of our regulatory and supervision regimes with emerging international best practices and standards.
" It will also address the concern that we have been subject to review and unfavourable listing by a process managed by select members of the most developed countries in the world …countries whose financial services sectors are in direct competition with The Bahamas."
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