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Real estate, gaming, money transmission highest AML/CFT risks, says report

The Central Bank of The Bahamas (CBOB) and Group of Financial Services Regulators’ (GFSR) Bahamas Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Report for 2019 to 2020 reveals that The Bahamas’ real estate, gaming and money transmission sectors have the highest AML/CFT risks of those sectors regulated by the CBOB and GFSR.

According to the report, for the real estate and gaming sectors the risks straddle domestic and international clients. With regard to the money transmission business, the CBOB said it would take steps to intensify its supervision of the industry. In terms of banking, the report found the sector to be a low AML/CFT risk.

Despite the findings that risks in those sectors are high, the report revealed that there is no material evidence to suggest high levels of illegal activity.

“The Bahamian authorities have in recent years considered money laundering and terrorist financing risks throughout the Bahamian economy,” the report states.

“From this process, the authorities have accumulated sufficient information to increase their focus on areas where the risks are higher and reduce focus on areas where risks are low or insignificant.

“In the domestic banking context, the major AML/CFT risks are likely to reside in real estate, gaming, and money transmission and the risks in the first two of these segments are shared between domestic and international clients.

“Aside from above cited exceptions, the Central Bank’s view is that domestic money laundering risks in the banking sector are quantitatively small and in character (except small-ticket self-laundering) are qualitatively low risk. This leads to the conclusion that the Central Bank, in conjunction with other Bahamian authorities, should focus its AML/CFT efforts on the relatively few areas of the domestic banking system that may present material risk, while concentrating most of our efforts upon the much larger international financial sector.”

According to information in the report by Compliance Commission of The Bahamas (CC) Inspector Andrew Strachan, there has been a focus on ensuring that designated non-financial businesses and professions (DNFBPs) such as lawyers, real estate agents and dealers in precious metals and stones (DPMS) understand their own reporting obligations.

Strachan stated that the Compliance Commission has had to cite and issue fines against numerous firms for non-compliance.

“The CC received $1,000 from a law firm on November 8th, 2019, representing a penalty applied for failure to supply information as required by the CC,” Strachan said.

“The CC also penalized another law firm in the amount of $5,000 for failure to supply information.

“For the period of 2018-2020, the CC sent letters to 74 law firms, 15 DPMS and 43 real estate brokers and land developers for failing to produce information, i.e. risk questionnaire.”

The report notes that all of the firms are now compliant.

This is the second edition of the AML/CFT report. The first edition was launched in 2019.

“The report aims to amalgamate the various AML/CFT work conducted by regulatory bodies and public/private agencies, highlighting the increased inter-agency cooperation and industry participation within The Bahamas regarding financial crime risk management,” the document explains.

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Chester Robards

Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian. Education: Florida International University, BS in Journalism

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