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Central bank inspector outlines what’s needed to insulate financial sector from crime


As The Bahamas seeks to solidify its reputation as a jurisdiction that complies with global financial crime risk management standards, Central Bank of The Bahamas (CBOB) Inspector of Banks and Trust Companies Charles Littrell said while there has been a change in the culture toward anti-money laundering/counter the financing or terror (AML/CTF), more is needed to insulate the entire financial sector.

“Our aspect of this is particularly important because so much money laundering happens in banks and we’re the regulators of the banks. If you look for example at the securities firms that’s another obvious target. Insurance has its own issues, it tends to be less exposed to money laundering but it’s still worth paying attention to,” he said on the Guardian Radio talk show “Z Live” with host Zhivargo Laing.

“The issue with money laundering is, particularly in the wholesale end, is if someone is trying to launder say $100 million, they’re not amateurs. They’re going to pick the most vulnerable spot and the most vulnerable country to run that money through.

“So, the trick of the game from our point of view is to insulate the entirety of the Bahamian economy – all the financial institutions, and all the service providers, and make us not the weak link. We don’t have to be perfect, we just have to be better than the ones who aren’t that good.”

In April, CBOB draft guidance notes on financial crime risk management and proliferation financing were released for consultation, to help demonstrate the country’s commitment to industry and supervisory practice, and to show international observers that The Bahamas is “strongly committed to meeting and where feasible exceeding global standards for financial crime risk management”, according to the Central Bank.

The draft guidance notes highlighted that although The Bahamas has not yet experienced any direct acts of terrorism or proliferation, instances of proliferation financing are still possible due to the country’s position as an international financial center.

“It is possible, though we hope very unlikely that a foreign client of our international banking and trust sector could run money through The Bahamas that has some nefarious purpose offshore,” Littrell said.

“One of the quite hopeful things about The Bahamas over the past year or two is for a long time there was this culture of compliance with anti-money laundering, I’ve got to follow the rules because if I don’t I’ll be punished. And increasingly we’re seeing a culture of risk management, I don’t want to facilitate a financial crime because that’s dumb business. Now that’s a healthier way to approach the issue.”

Littrell was speaking ahead of the CBOB’s first national AML/CFT risk management conference scheduled for September 17-18 at Baha Mar.

“At that conference, we will have the most senior relevant politicians and bureaucrats and a half dozen leading international experts in the field and they will be making presentations and having discussions with about 400 locals, mainly Bahamians from all aspects of the financial and services industry,” he said.

“Out of that our expectation and hope is that collective conversation will set our agenda going into 2019 about how we’re going to differentiate The Bahamas as one of the world’s exemplars of how to do anti-money laundering management.”

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