The system used by the European Commission to blacklist The Bahamas for a weak anti-money laundering and counter-terrorism financing regime was “flawed”, Prime Minister Dr. Hubert Minnis said.
The Bahamas was blacklisted by the commission on February 13, along with Saudi Arabia, Nigeria, Panama, several United States territories and other jurisdictions.
However, the European Union (EU) rejected the commission’s blacklist on February 28 because it “was not established in a transparent and resilient process that actively incentivizes affected countries to take decisive action while also respecting their right to be heard”.
When contacted about the EU’s decision to reject the blacklist, Minnis told The Nassau Guardian, “The unanimous rejection reinforces what we have been saying all along, as it relates to this advisory list: that the approach and process used to name The Bahamas was flawed.”
He added: “The blacklist proposal was the first time that the EU attempted to create its own independent list of high-risk jurisdictions for anti-money laundering and counter-terrorism financing.
“The process was not transparent, nor was it credible, and it was highly criticized by many countries, including the United States.
“While the credibility of the process was damaged this go-around, the setback will force the EU College of Commissioners to go back to the drawing board to create a different approach.”
While the commission noted that The Bahamas had “strategic deficiencies” in its anti-money laundering (AML) and countering the financing of terrorism (CFT) legislation, the government has maintained that the blacklist was not justified.
Last Thursday, Attorney General Carl Bethel revealed that there were 19 money laundering convictions last year and roughly $2.7 million in “dirty money” confiscated by the government in the last year and a half.
In a recent interview, Minnis said, “The advisory also failed to take into consideration the increase in money laundering prosecutions and convictions in The Bahamas, and it erroneously concluded that The Bahamas does not have any law that criminalizes money laundering or terrorism financing. That is not the case.
“The assessment used to identify The Bahamas was insufficient, given the consequences of such a list, and the process was flawed, as confirmed by the outright rejection of the list.”
If the blacklisting had been upheld by the EU, it would have posed potential harm to The Bahamas and its financial services industry through reputational damage.
It also stood 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.
Noting that EU member states are “valuable trading partners” to The Bahamas, Minnis said the government intends to “weigh all the factors involved with this EU blacklist process as well as others”.
“We will balance our responses and actions accordingly, and we will continue to do what is necessary to maintain the standing of The Bahamas as a respected international financial center (IFC) that operates under fairly established international best practices,” he said.
The prime minister said the government is “definitely encouraged” by the rejection of the blacklisting and remains “committed” to taking progressive steps in the best interest of the Bahamian economy.