AG pushes back at latest EU blacklisting
The Bahamas was blacklisted by the European Commission yesterday due to “strategic deficiencies” in its anti-money laundering (AML) and counter-terrorist financing (CFT) legislation.
The commission said in its press release that it conducted an in-depth analysis that “assessed the level of existing threat, the legal framework and controls put in place to prevent money laundering and terrorist financing risks and their effective implementation”, and that it also considered the work of the Financial Action Task Force (FATF) in determining the list.
Attorney General Carl Bethel said yesterday in a statement that the commission’s decision to blacklist The Bahamas was not justified.
He said The Bahamas was listed as a result of its placement on a FATF action plan last year, but that the progress The Bahamas has made since the implementation of the plan was not adequately considered by the Commission.
Bethel said, “In the circumstances where The Bahamas has, since the implementation of the FATF action plan in October, 2018, been re-evaluated as being compliant or largely compliant with 30 of the FATF’s 40 recommendations (up from compliance in only 18, in 2017), it is the view of The Bahamas that the listing by the College of Commissioners of the European Union (EU) is not a proportionate response.”
He added, “To list a country, such as The Bahamas, that has made outstanding progress, in just over one year, in addressing the AML/CFT deficiencies identified in May 2017, together with wholly noncompliant, war-torn or even rogue states is disproportionate, and inflicts harm and punishment on a people with no regard for their important reforms and improvements in their AML/CFT framework. Such a ‘one size fits all’ approach is unworthy of established democracies, and is an affront to their own legal principles.”
The blacklisting not only poses potential harm to The Bahamas and its financial services industry through reputational damage, but it also stands to complicate financial relations with the EU, as European banks would be required to perform additional due diligence on financial operations involving entities from The Bahamas.
The European Commission statement said, “Banks and other entities covered by EU anti-money laundering rules will be required to apply increased checks (due diligence) on financial operations involving customers and financial institutions from these high-risk third countries to better identify any suspicious money flows.”
The U.S. Treasury also issued a statement yesterday criticizing the methodology used by the European Commission after four U.S. territories were included on the list.
“The European Commission produced a list that diverges from the FATF list without reasonable support,” the statement said.
The U.S. said it does not expect U.S. financial institutions “to take the European Commission’s list into account in their AML/CFT policies and procedures”.
Prime Minister Dr. Hubert Minnis travelled to Brussels in January to meet with high-ranking officials of the European Commission.
“The bilateral meeting was very constructive and provided The Bahamas with a significant opportunity to ensure the commission fully understands the scope of the efforts we are taking to adhere to global standards,” the prime minister said.
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