Bahamian Financial Services Secrecy Laws Will Be Modified - 1 Nov 2000

The Prime Minister of The Bahamas, the Rt. Hon. Hubert A. Ingraham, is introducing legislation in the House of Assembly which will bring major changes in the financial services of the country. These are in response to the recent "blacklisting" of The Bahamas by three international groups because the leading countries of the world feel that the country has been too lax in its banking supervision. For those countries not complying with international regulations, the consequences of sanctions would be harmful to the financial industry. These proposed laws will be in addition to action already taken and will bring The Bahamas into full compliance with international standards.

The Prime Minister has recently returned from an extended visit to many European countries. This followed a previous visit to the United States and Canada to assure these countries that The Bahamas will comply with their requirements. He felt that because of the seriousness of these actions, he should personally discuss with world leaders and financial organizations the necessary changes to bring The Bahamas into favorable status again. The Bahamas has retained experts from abroad to give legal financial advice and with their assistance will introduce new legislation and amendments to current laws. The main impact of these changes will reduce the opportunities for anonymous use of our financial services and the use of Bahamas' financial services for unauthorized purposes. This legislation will be debated when Parliament meets again at the end of October.

The international financial services sector contributes significantly to the economy, employing 15 percent of the labour force and contributing 15 percent of the Gross Domestic Product of the country.

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Changes of Laws Will Take Bahamas off Blacklist

The Bahamas was named one of 15 countries in the world that were not cooperating in the efforts of the industrial nations against money laundering. The United States issued a Financial Advisory to banks and other financial institutions dealing with the Bahamas listing the problems but adding that they should not curtail legitimate business involving The Bahamas. The Bahamian government has stated that it remains determined in its stand against money-laundering, drug trafficking and related crimes. The weaknesses in the system relate to regulation and supervision of financial services including legal and accounting firms. The Bahamas will be taking all necessary steps required to be removed from the list.

The Prime Minister met with leaders in the United States and Canada and the Minister of Finance met with British representatives to determine what legislation will have to be enacted to satisfy the demands of the leading industrial nations of the world so that the Bahamas will no longer be on the "blacklist." The government will introduce appropriate legislation to amend the Money-Laundering (Proceeds of Crime) Act to respond to the identified weaknesses in the system. "It is in our best interest, and we will fully comply with international best standards and practices," the Prime Minister, the Rt. Hon. Hubert Ingraham stated.

The government has already passed a two measures which will begin the process of complying with the requirements. The legislation will increase the reporting of suspicious and unusual financial transactions.

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Bahamas Named As Uncooperative (1 August 2000 Abaconian)

The Bahamas has been named on a list of 15 countries as uncooperative in the fight against money laundering. The G-7 countries, the most industrialized countries in the world, have listed the 15 in an effort to force these countries to change their bank secrecy laws to stop the practice of anonymous bank accounts and to accommodate the wishes of these larger countries. The G-7 nations include the United States, Canada, Great Britain, France, Italy and Japan. These countries will put pressure of these small countries to bring about the changes they demand. These could include suggesting that the International Monetary Fund consider this list when deciding whether to extend loans or even making compliance a condition for IMF loans. The United States has already sounded warnings to banks and other financial institutions to use caution when doing business with banks with the blacklisted countries. This might also involve embargoes on financial transactions with the Bahamas and other listed countries.

The Bahamas immediately issued a release which states that it is determined in its stance against money laundering, drug trafficking, corruption and criminality in all forms. But these recent problems stem from weaknesses in the regulatory supervision of financial institutions. The Bahamas is particularly concerned about this recent initiative as the financial services sector is a critical part of our economy. It represents 15 percent of the gross domestic product of this country and employs 10 percent of the labour force. How the suggested new banking rules will affect this segment of our economy will depend on what these larger countries will require the Bahamas to do in order to comply.

His Excellency Joshua Sears, presented the position of the Bahamas in his remarks to President Bill Clinton when he presented his letter of credence naming him the new Bahamian Ambassador to the United States. He assured the president that the Bahamas is committed to reducing or eliminating the abuse of the financial services sector by money launderers. The Bahamas was in the process of adopting strong anti-money laundering measures which would apply to money from other major crimes such as arms-dealing, prostitution, kidnapping and terrorism. The Bahamas is accepting technical help from the United States in applying administrative procedures to satisfy the demands of the G-7 countries. The Cayman Islands, another of the blacklisted countries, is hurriedly passing legislation which will take them off the list. The closing of Parliament in Nassau has been delayed to allow time to pass new legislation to satisfy the demands placed on the country.