..conforming to international best practices and standards

Following his return from meetings with G-7 representatives in Europe, the Prime Minister in October launched a wide ranging programme of legislative and administrative changes, designed to bring The Bahamas’ financial services sector into full compliance with international standards and practices

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

This initiative by the Government of The Bahamas has included 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. Each piece of legislation was “benchmarked” to ensure compliance with acceptable practices in multiple jurisdictions and, further, to ensure that The Bahamas maintains its competitive edge. 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 new Financial Intelligence Unit, as they all operate in jurisdictions with similar procedures and powers given to the equivalent agencies.

Prime Minister H.A. Ingraham has commented that provisions of the new legislation 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”.

New legislation includes:

-Banks and Trust Companies Regulation Act, 2000

(enhances the role of the Central Bank’s Governor; expands the licensing criteria for banks and trust companies; provides enhanced supervisory powers for the Inspector of Banks and Trust Companies; provides for cross-border supervision by foreign regulators; and increases the number of expressed exceptions to the statutory duty of bank confidentiality)

-Central Bank of The Bahamas Act, 2000

(provides for 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; provides extensive information gathering powers for the Central Bank; and provides additional expressed exceptions to the duty of confidentiality upon the Central Bank)

-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)

-Dangerous Drugs Act, 2000

(regulates the importation, exportation, manufacture, sale and use of dangerous drugs)

-Financial & Corporate Service Providers Act, 2000

(provides for the annual licensing of persons to carry on the business of financial and corporate services in or from within The Bahamas; and for the appointment of an Inspector of Financial and Corporate Managers with responsibility for ensuring the proper administration of the Act)

-Financial Intelligence Unit Act

(provides for the establishment of a Financial Intelligence Unit in The Bahamas; the FIU’s function would be to receive, anlayse, obtain and disseminate information relating to the proceeds of an offence; all disclosures of information required to be made under the Proceeds of Crime Act, 2000 will be made to the FIU)

-Financial Transactions Reporting Act, 2000

(concerned with money laundering and designed to identify those who abuse the financial system; imposes certain obligations on financial institutions, broadly defined, in relation to the conduct of financial transactions and for connected purposes, including the verification of the identity of persons with whom they transact business)

-International Business Companies Act, 2000

(revises existing legislation to tighten regulations for IBCs; removes legal clauses allowing anonymous ownership; alters policies that permit ring fencing)

-Proceeds of Crime Act, 2000

(empowers the police, customs and the courts in relation to money laundering, search, seizure and confiscation of proceeds of crime and for connected purposes)

As planned, the Prime Minister’s presented the nine pieces of new legislation separately, but moved for passage only after all had been tabled and members had an opportunity to debate them and to see “how the bills connect one with the other”.
The House of Assembly passed all nine bills on Wednesday, December 13, with the legislation then read for the first time in the Senate on Thursday, December 14. Plans are for the bills to be debated in the Senate on December 20. Following debate and passage there, all new Acts will be presented to the Governor General for signing and subsequent enactment. It is the
Government’s intention to have this process completed before the end of the year.

Earlier legislative amendments enacted and entered into force included:

-Money Laundering (Proceeds of Crime) Act, 2000

(strengthens the requirement for the reporting by financial institutions and others of suspicious transactions by including the necessary reporting of unusual transactions)

-Evidence (Proceedings in Other Jurisdictions) Act, 2000

(replaces the Foreign Tribunals Evidence Act, 1856; places The Bahamas in a position to live up to its obligations under International Conventions to which it is party; permits 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)