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UK seeks further scrutiny of Bahamas

With the United Kingdom government adding The Bahamas to the list of foreign jurisdictions that pose a greater risk due to deficiencies in anti-money laundering regimes, UK firms will be required to undertake greater due diligence when dealing with Bahamian entities and clients, according to a HM Treasury Advisory.

The advisory notice published on October 25 advises firms to consider taking “appropriate actions to minimize the associated risks, which may include enhanced due diligence measures in high risk situations”.

It listed The Bahamas among 11 countries, including Syria, Yemen, Serbia and Botswana to take such action with.

“These jurisdictions are subject to sanctions measures at the time of publication of this notice, which require firms to take additional measures,” the advisory read, though The Bahamas is absent from the linked page which shows the financial sanctions levied against other countries.

It said that regulated businesses must apply “enhanced customer due diligence measures and enhanced ongoing monitoring in any business relationship or transaction with a person established in a high-risk third country”.

“These risk factors are stated as including whether a country is identified by a credible source, including reports published by the Financial Action Task Force (FATF), as not implementing requirements to counter money laundering and terrorist financing that are consistent with FATF recommendations,” the notice read.

“As the international anti-money laundering and counter-terrorist financing (AML/CTF) standard-setter, FATF regularly publishes statements that identify high-risk countries based on assessments of their AML/CTF regimes.”

The HM Treasury attached the FATF’s assessment of the 11 countries it listed as high-risk jurisdictions.

When contacted, Attorney General Carl Bethel, who has been a key spokesperson on FATF matters, said he was in discussions with his colleagues on the matter and was not prepared to make a statement at this time.

He was unable to offer any further clarity on the implications of the UK’s move.

Guardian Business also reached out to Deputy Prime Minister and Minister of Finance Peter Turnquest.

He deferred to the attorney general, but said the government has been made aware of the development.

“The suggestion falls in line with the comments made by the FATF, which we are in the process of addressing and we will continue to be diligent to ensure the reputation of The Bahamas is protected and that we are compliant with international standards,” he said.

Turnquest added that the public should not be overly concerned.

He said, “We have a very robust regulatory regime and we will continue to make enhancements necessary to make sure to demonstrate [this] to the international community.”

The FATF noted in an October 19 assessment that The Bahamas made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies.

It noted that The Bahamas committed to implementing its action plan to achieve developing and implementing a comprehensive electronic case management system for international cooperation; ensuring the timely access to adequate, accurate and current basic and beneficial ownership information; collecting more suspicious transaction reports, to help law enforcement in complex money laundering investigations; demonstrating that it investigates and prosecutes all types of money laundering, including complex cases, stand-alone money laundering, and cases involving proceeds of foreign offenses; and addressing the gaps in the legislation and its implementation; and demonstrating risk-based supervision of non-bank financial institutions among other steps.

The Bahamas’ inclusion on the FATF list poses reputational risk, particularly for the financial services industry, though Turnquest noted there are no penalties beyond that.

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