On Monday, November 27, the Bahamas Government tabled three bills in the House of Assembly, as part of a wide ranging programme of legislative and administrative changes currently underway, and designed in part 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.

The Bills presented on Monday were:

– The Dangerous Drugs Bill
– The Financial Transactions Reporting Bill
– The Proceeds of Crime Bill

The Dangerous Drugs Act 2000 will regulate the importation, exportation, manufacture, sale and use of dangerous drugs; the Financial Transactions Act, 2000 will impose certain obligations on financial institutions in relation to the conduct of financial transactions and for connected purposes; and the Proceeds of Crime Act, 2000 will empower the police, customs and the courts in relation to money laundering, search, seizure and confiscation of proceeds of crime and for connected purposes.

In presenting the additional pieces of financial services legislation, Prime Minister H.A. Ingraham commented that provisions of the Bills have “far reaching consequences for society and those who participate in illegal activities” and that it is the intention of the Government that all be “vigorously enforced”.

Debate on the three Bills is expected to commence on Monday, December 4th. Prime Minister Ingraham has indicated that the Government does not intend to pass any of the new slate of bills until all are tabled and House of Assembly members have had an opportunity to debate them and to see “how the bills connect one with the other”.

Previously introduced on Tuesday, November 7 were:

– The Central Bank of The Bahamas Bill
– Banks and Trust Companies Regulation Bill

Adoption of the proposed amendments to these two Acts 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. The new Central Bank Act will repeal and replace the existing Act, ensuring that legislation governing the Central Bank is in line with global financial regulatory requirements. The new Banks and Trust Companies Regulation Act will make fresh provisions relating to the operation of banks and trust companies.

And on October 18, the Government introduced

– The Financial Intelligence Unit Bill
– Criminal Justice (International Co-operation) Bill

As in other cases, these pieces of legislation were “benchmarked” to ensure compliance with acceptable practices in multiple jurisdictions. For example, American, Canadian and Swiss banks — and all other foreign banks operating in The Bahamas — are not expected to have difficulty with provisions and powers of the Financial Intelligence Unit, as they all operate in jurisdictions with similar procedures and powers given to the equivalent agencies. The proposed Criminal Justice (International Co-operation) Act, 2000 addresses criminal matters only, dealing with mutual service of process, mutual provision of evidence, co-operation powers for the transfer of prisoners to give evidence in The Bahamas or abroad, and offences at sea.

The remaining package of new and amended legislation, all slated to be presented before the end of the year, includes:

– Banks (Amendment) Act, 2000
– International Business Companies Act, 2000
– Financial Service Providers Act, 2000
– Mutual Legal Assistance (Amendment) Act, 2000
– Trustee Act, 2000

The new package of industry legislation is being reviewed 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.

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.

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

– amendment to the Money Laundering (Proceeds of Crime) Act, 2000 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, 2000 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.