The Rt. Hon. Hubert A. Ingraham
Prime Minister of The Bahamas

In response to representation from the financial services industry, the Office of the Attorney General early in June provided to the Bahamas Financial Services Board a “Letter of Comfort”, indicating that certain provisions of the International Business Companies Act, 2000 would be amended to address issues relating to practical implementation. Specifically, the end of June deadline for compliance with the new Act by IBCs established before December 29, 2000 presented some concern to the industry, in light of the perceived need for clarification in respect to a number of issues. The Letter of Comfort provided by the Attorney General indicated that an amendment would be presented to Parliament, extending the deadline to the 31 December, 2001. Further included in the Letter was assurance that additional amendments would be presented to address other issues of concern to practitioners.

The Rt. Hon. Hubert A. Ingraham, Prime Minister of The Bahamas, today presented to the House of Assembly a bill for an Act to Amend the IBC Act, 2000 in line with provisions detailed in the Attorney General’s Letter of Comfort. The extension of the deadline for compliance will not repeal provisions relating to bearer shares, however; the deadline for the elimination of such remains as the end of June, 2001.

Also tabled in Parliament today were amendments to other pieces of financial services legislation, following extensive consultation with private sector industry leaders — including the Bahamas Financial Services Board. These included:

– An amendment to the Financial Transactions Reporting Act relating to occasional transactions and a broader definition of “cash”. Proposed additional amendments to this Act also (i) clarify that the requirement for verification applies to the establishment of a facility with a financial institution or to transactions in cash which exceed the prescribed limit of $10,000; and (ii) increase the number of countries and territories deemed to have adequate counter-money laundering rules. Further, under the proposed amendments, non-compliance with the Compliance Commission of The Bahamas would be a crime.

– The Financial Transactions Report Regulations are to be amended to address concerns relating to the opening of new banking accounts and facilities and the verification of ownership of existing accounts and facilities.

– Under the Financial Intelligence Unit Amendment Act, new provisions would allow relevant bodies in other jurisdictions to be accepted as having met the standard of performing functions similar to the Bahamian FIU without reference to a Ministerial Order.

– Financial and Corporate Service Providers Act amendments remove the requirement for registration with the Inspector of persons conducting business on their own behalf; permit the Inspector to share information with other regulatory authorities; impose a requirement of confidentiality on the disclosure of information; and distinguish for the purpose of maintenance of records certain categories of companies, including regulated mutual funds.

Those provisions presently included in the Central Bank Act, 2000 and the Bank and Trust Companies Regulations Act, 2000 relating to international cooperation will be extended to several other Acts, and will include safeguards with regard to confidentiality. These Acts include the Securities Industry Act, 1999; the Insurance Act, 1969; the External Insurance Act, 1983; the Lotteries and Gaming Act, 1969; and the Mutual Funds Act, 1995.

Debate on the amendments tabled today is expected to commence in two weeks.

Sir William Allen, Minister of Finance, confirmed last week that while the Government was looking at amending certain provisions of various Acts & Regulations to address concerns relating to the ongoing practical implementation of the new regulatory and supervisory regime, these issues *”do not go to the fundamental requirements of the anti money laundering initiatives”*. Similarly, BFSB has reiterated that the financial services industry fully supports the strengthening of the anti-money laundering regime in The Bahamas. Various presentations made to the Government on amendments to relevant legislation relate purely to execution issues or to provisions requiring clarification.

The Bahamas was recognised for its efforts to counter international money laundering when it was removed from the list of Non-Cooperating Countries and Territories (NCCTs) by the Financial Action Task Force last week.