The European Commission’s “high-risk third countries” list was based on outdated information, the Office of the Prime Minister (OPM) said in a statement yesterday.
“The Bahamas poses no threat to the EU financial system and regrets this action by the EU, especially in light of it being based on out-of-date information,” the statement said.
Last week, The Bahamas was added to a European Commission list due to “strategic deficiencies” in its anti-money laundering (AML) and counter-terrorist financing (CTF) 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.
The OPM cited progress made in the past year in satisfying FATF requirements for compliance.
“The Bahamas was placed on the FATF watch list in October 2018, when it only satisfied 17 of the required 40 FATF criteria. By year-end, The Bahamas was essentially compliant with 30 of the 40 requirements, a record similar to the United States,” it added.
The statement continued, “The Justice and Consumers Unit failed to consider the progress made by The Bahamas since May of 2017, based on the FATF criteria. As stated by the unit, work prepared by the FATF is used to consider additions to this list, and old criteria for The Bahamas [were] considered.
“The Bahamas was informed that the unit was advised that The Bahamas does not have any law that criminalizes money laundering or terrorism financing. This is not accurate.
“The Justice and Consumers Unit notes failures to prosecute all types of money laundering, but does not consider the increase in money laundering prosecutions and convictions in The Bahamas.”
OPM also insisted that the list is not a blacklist.
“This is not a ‘blacklist’, but if agreed to by EU members at a subsequent meeting, it would require financial institutions to engage in ‘enhanced customer due diligence’ for financial transactions to and from The Bahamas,” it said.
The statement also said Prime Minister Dr. Hubert Minnis’ trip to Brussels in January was unrelated to the matter, noting that he and Attorney General Carl Bethel met with the head of the Taxation and Customs Union, which works on a list of “non-cooperative tax jurisdictions for tax purposes”.
“Failure to meet requirements by the Taxation and Customs Union within the EU may lead this body to recommend to the EU of Finance Ministers that The Bahamas be placed on a ‘blacklist’ of countries that are ‘non-cooperative for tax purposes’,” the statement said.
“A ‘blacklist’ is expected to be produced over the next few months, however The Bahamas believes it has met requirements expressed by the Taxation and Customs Union and has provided requested clarification over the last several weeks as a result of a healthy dialogue and exchange.”