Addressing participants at a recent Anti-Money Laundering Seminar, Ernst & Young’s Corporate Manager Lorraine D. Burrows shared some basic “Know Your Customer” principles.

Pointing out that KYC constitutes an integral part of the due diligence compliance process, Ms. Burrows said, *”It is the pivotal requirement for qualified intermediaries with United States individuals as clients or clients holding United States investments. When used properly, kyc is one of the tools of the trade which afford our institutions an opportunity to discourage present and potential customers from engaging in such activities as money laundering, fraudulent or illegal transactions, and tax evasion through the use of our services.”*

Positioned on the cutting edge of state of the art technology, globalisation and e-commerce, industry professionals now have added responsibilities when providing the services of trust officers, directors, members, trustees, liquidators, qualified intermediaries. In addition to long established industry standards, the new kyc regime requires adherence to all statutory requirements. This demands a sound knowledge and familiarity with legislative and regulatory rules.

Also pointed out was that KYC forms should be designed to integrate a company’s internal due diligence requirements as well as the requirements depicted in the Financial Transactions Reporting Regulations Act 2000, including subsequent amendments. This should go a long way in preventing institutions from being used to conceal, disguise or aid the flow of criminally obtained funds.

Registered Office & Registered Agents Services

Dispelling any beliefs that those companies providing only registered office services or acting as registered agents are not required to comply strictly with the kyc regulations, Ms. Burrows further said, *”If we adopt this attitude and treat the kyc forms for a registered agent/registered office client with less due diligence than for a full service client, we may find ourselves in breach of our own institution’s due diligence procedures as well as in breach of the Financial Transactions Reporting Regulations.”*

Service providers were advised to know as much about this type of client as would be required for a client desiring full services, carefully monitoring for suspicious transactions — in accordance with legislation now in place and which provides mandates and guidelines relating to such. The Bahamas’ legislative and regulatory initiatives designed to combat illegal financial transactions and these must be applied.

Practitioners were encouraged to continue doing their part in preserving the offshore industry and its integrity. A reasonable prognosis for the future was defined as ” the strong will survive; the weak will not” – with strength defined primarily in terms of:

-excellence of regulatory structures

-execution of the same

-quality of delivery of services to clients, and

-a competitive response to the evolving requirements of a truly global marketplace.

*”If we all do our part, the offshore world, as we know it, will not disappear. On the contrary, in the long run, the industry will flourish. The Bahamian economy will continue to be resilient and soar like an eagle,”* concluded Ms. Burrows.

Under the theme “A Proactive Approach to Anti-money Laundering”, this Ernst & Young programme targeted financial service executives. It provided an international perspective to anti-money laundering, as well as proactive measures to assist in tackling this area of concern, and reducing the risk of fraud. Presenters included Ernst & Young service professionals from The Bahamas, United States, Switzerland and the United Kingdom, in addition to Mr. Julian Francis, Governor of the Central Bank of the Bahamas.