A wide ranging programme of legislative and administrative changes is underway at the present time, designed to upgrade anti-money-laundering processes. This includes the amendment and/or enactment of relevant legislation and the introduction of new administrative steps to strengthen and enhance the supervision of the financial services sector. The Bahamas Government recognises the value of consistency and quality legislation to address issues rather than “quick-fix” solutions.

To date legislative amendments have been enacted and entered into force as follows:

– amendment to the Money Laundering (Proceeds of Crime) Act, strengthening the requirement for the reporting by financial institutions and others of suspicious transactions to include the necessary reporting of unusual transactions;

– the enactment of a new Evidence (Proceedings in Other Jurisdictions) Act, replacing the Foreign Tribunals Evidence Act, 1856. The new Act places The Bahamas in a position to live up to its obligations under International Conventions to which it is party, permitting evidence to be obtained in The Bahamas for use in proceedings in other jurisdictions in respect of matters pending before a Court or in respect of matters where proceedings are contemplated before that Court and for which investigations have commenced.

Currently under review by Bahamian legal counsel retained by the financial services sector in consultation with The Bahamas Government, and by legal experts in financial services retained in the United States and Great Britain by the Government, are the following pieces of legislation:

– new Financial Intelligence Unit Act, 2000
– new Criminal Justice (International Cooperation) Act, 2000
– Central Bank of The Bahamas (Amendment) Act, 2000
– Banks and Trust Companies Regulation (Amendment) Act, 2000
– Banks (Amendment) Act, 2000
– new Proceeds of Crime Act, 2000
– new International Business Companies Act, 2000
– new Financial Service Providers Act, 2000
– new Financial Transactions Reporting Act, 2000
– Mutual Legal Assistance (Amendment) Act, 2000

It is proposed to introduce this important legislative programme in Parliament during October-November, 2000 and, in fact, this commenced October 18 with the introduction of the Financial Intelligence Unit Bill and the Criminal Justice (International Co-operation) Bill.

When adopted and brought into force these additional pieces of legislation, together with legislative and administrative action already taken, and the new administrative and supervisory processes presently being introduced by the Central Bank, will bring The Bahamas’ financial services sector into full compliance with international standards and practices.

Of particular importance is the impact which the legislation will have in reducing opportunities for anonymous use and/or abuse of Bahamian entities for unauthorised purposes either within The Bahamas or internationally.

The new International Business Companies Act (IBC), by the elimination of bearer shares and the reporting requirements, will positively impact concerns with regard to transparency, including in relation to investments in mutual funds. The elimination of a prohibition against IBCs conducting business in The Bahamas and the removal of artificial tax exemptions in the existing Act will also address charges of ring fencing made by the OECD.

It is expected that the adoption of the proposed amendments to the Central Bank Act and the Banks and Trust Companies Regulation Act and the implementation of the new regulatory and supervisory regime by The Central Bank will result in improved supervision, including an appropriate level of on-site inspection of banks, full cooperation on cross-border supervision of banks, and enhanced cooperation between the Central Bank and overseas regulatory authorities.

(As extracted from the Prime Minister’s Report to the House of Assembly on his Official European Travel, October 18)