Hon. Sir William Allen
Minister of Finance
The Bahamas Parliament last week approved amendments to a number of financial services acts and regulations, to deal with issues of practical implementation and in an effort to remove certain “irritants” identified by the industry.
During the debate phase, it was reported in Parliament that Government is in the process of completing “guidance notes” for the financial institutions in the implementation of new legislation and regulations. Specifically, it is the intention to facilitate understanding of the new legislation by the securities, banking and insurance industries by issuing an outline that will guide operations in respect of the new laws.
Addressing criticism that the Bahamas Government acted too quickly in passing its legislative package last year, Minister of Finance Sir William Allen indicated that *”…no one in the main stream of the banking system has said that, as far as I am aware. They have been mostly grateful for the speed with which we moved in the circumstances and for our success in achieving the QJ and QI status for The Bahamas”.* This speed was seen as a function of the requirement to keep the nation’s banking system viable and intact, and to make it sustainable. Sir William indicated that he had no doubt remaining “irritants” would work themselves out of the system in due course.
The Minister further noted that the industry has been grateful for actions taken to remove The Bahamas from the FATF’s list of non-cooperative territories. The Bahamas, in fact, had benchmarked its legislation against FATF requirements and international best practices and standards.
Minister Allen further commented that the various initiatives by the supranationals had proved to be a mixed blessing, resulting in an increase in employment in the financial services sector. *”No operating bank or major institution has signalled to us that they have to reconsider their position in The Bahamas”*, continued the Minister, while *”large international reputable institutions are now seeking to be licensed in The Bahamas”.*
Parliamentarians were told that the identification of more secure, stable and sustainable business for offshore centres generally was a consequence of the initiatives, with prospects high for *”good business and good life for OFCs within the confines of the legislative arrangements and the regulatory regimes established.”* With particular regard to The Bahamas, Minister Allen indicated that this would be *”a more comfortable jurisdiction now for those institutions that were uncomfortable being in a jurisdiction stigmatized.”*
The amended Financial Transactions Reporting Act defines cash to include travellers’ cheques, bearer shares and postal and money orders, and clarifies 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 $10,000. Other amendments increase the number of countries and territories deemed to have adequate counter-money laundering rules. While noting that the improved legislation will ensure that cash deposited into bank accounts without a “paper trail” will lead to an identifiable person, the Minister noted that the government would not allow members of the public to come under undue scrutiny for legitimate financial transactions.
Other legislative amendments extend provisions relating to international cooperation, as previously included in the Central Bank Act and Banks & Trust Companies Act, to other legislation, but include confidentiality safeguards.
The package of financial services legislation passed by The Bahamas last year responded primarily to the international financial initiative by the FATF. Measures were also adopted to deal with issues raised by the Financial Stability Forum, but Sir William confirmed that The Bahamas has not signed on to any OECD initiative. *”We have not addressed the OECD issue to date,”* he said.