Parliamentarians yesterday debated amendments to the Register of Beneficial Ownership Act, which Deputy Prime Minister and Minister of Finance Peter Turnquest described as another weapon in The Bahamas’ arsenal, to show proof the country’s financial services industry adheres to regulations set by the international financial community.
The bill, Turnquest said, should bolster this jurisdiction’s efforts to be removed from the Financial Action Task Force’s (FATF) International Co-operation Review Group (ICRG) process, by addressing a major recommendation by the FATF with respect to ensuring that no person is able to hide their identity through the use of a Bahamian entity.
“The bill provides for the specific inclusion of the non-profit organization limited by shares (NPO) and the segregated accounts company (SAC) in the definition of entities covered by the act. While it can be argued that a SAC would have already been within the scope of the act on the basis that a SAC is either an IBC (international business company) or a Companies Act company, we felt that it was important to expressly state that SACs were included, given that the intrinsic operation of a SAC could be viewed as a vulnerability to our anti-money laundering framework with respect to the identification of beneficial owners,” Turnquest said.
“This is because the assets of an SAC are not pooled and deemed to be owned by the shareholder of the company as is usually the case. But rather, different individuals, other than the shareholders of the SAC, beneficially own the assets of the SAC in separate accounts within the SAC.”
Turnquest said additionally, the bill safeguards the financial services sector from persons attempting to use it to abate the true extent of their financial assets to the relevant authorities in their home countries, or as a shield to hide or launder illicit assets.
“The bill also fine tunes the definition of beneficial owner with respect to NPOs and partnerships (common law partnerships, limited liability partnerships and exempted limited partnerships) by defining who the beneficial owners of such entities are,” Turnquest said.
“The bill imposes a duty on the registrar general to provide beneficial ownership information in those cases where a legal entity does not have a registered agent. A compliance unit has been established in the Registrar General’s Department to monitor the provision of beneficial owner information and other compliance measures related to the Register of Beneficial Ownership registry. Two senior attorneys of the Office of the Attorney General have been assigned to this unit and a third is being retained.”
The FATF was expected this month to conduct an in-country assessment of The Bahamas’ anti-money laundering/combating the financing of terrorism (AML/CFT) regime, a final hurdle to overcome before being removed from its list of countries with strategic AML/CFT deficiencies. However, due to COVID-19-related travel restrictions, the FATF has not been able to do so.
“Removal from the FATF list has been cited by the EU as a requirement for them to not include The Bahamas in the impending EU AML/CFT List of Third Countries,” Turnquest said in starting debate on the bill.
“So, as members of this House will agree, the implications of this bill for The Bahamas are far-reaching and the implementation of the measures proposed are vital to safeguarding the integrity of the financial sector and the reputation of the jurisdiction.”