In The Bahamas, as in the region, there is a determined effort to maintain the integrity of financial services industries. *”The Bahamas is serious about combating money laundering,”*says its Attorney General, who took over the role of Chairman of the Caribbean Financial Action Task Force (CFATF), during meetings held in The Bahamas last week.
He continued, *”Money laundering represents a threat to the viability, the competitiveness as well as the integrity of our financial services sector.”* The Hon. Alfred Sears, who also serves as the Bahamas Minister of Education, succeeds Mr. Bonaparte Gautreaux Pineyro of the Dominican Republic as Chairman of the regional group.
Addressing a CFATF Ministerial meeting, Minister Sears said that The Bahamas has instituted fundamental reforms to its financial system over the past two years, particularly with regard to international standards and practices on the regulation and supervision of its financial sector.
According to the new Chairman, there is a high cost of implementing international standards against money laundering which makes it even more imperative that there is equality of treatment by all, including FATF member countries. He said, *”The Bahamas has demonstrated its resolve in fighting money laundering. It has regulated the gatekeepers, and these same gatekeepers are not fully regulated in Europe among FATF member states.” *The new evolving standards of due diligence, according to the Minister, should be applied uniformly throughout the world.
Several member CFATF countries have seen a restructuring of the financial services industry, including The Bahamas. Legislation enacted here included provisions for enhanced cooperation with external regulatory bodies; upgrade of the supervisory and regulatory regime for banks; strengthening of KYC requirements; reporting of suspicious transactions; and establishment of a financial intelligence unit. In addition to the necessary expenditure for creating the enhanced legislative and regulatory regime, considerable resources are being spent, still, on the Compliance Commission, the Inspector of Financial and Corporate Services Providers, the Inspector of Banks and Trust Companies, the International Legal Cooperation Unit, and the Financial Intelligence Unit.
The Bahamas is committed to upholding international best practices, and to be a leader in the fight against money laundering in the region, according to Minister Sears. *”The Bahamas takes pride in the fact that it is a well-regulated financial centre, committed to the highest standards in the provision of financial services, and is serious about the integrity of its financial services sector,”* said the new Chairman of the CFATF.
The Executive Director of the CFATF, Calvin Wilson, supported this view, indicating that The Bahamas can be considered one of the leaders in the region in terms of its anti-money laundering infrastructure. He said, *”There is a lot The Bahamas can offer the rest of the region and, indeed, they have already begun to do so.”*
A CFATF team assessed The Bahamas in July and presented a favourable report to the 8th Ministerial Meeting held during the CFATF Plenary in The Bahamas. The team had met with all stakeholders in the industry, viewing first hand the extent of the implementation of the new regulatory regime.
**CFATF & FATF Recommendations**
Minister Sears is the 6th Chairman of the CFATF since its inception in 1990, when selected Caribbean Basin states agreed to implement common counter-measures to address the problem of criminal money laundering.
Nineteen recommendations constituting this common approach and having specific relevance to the region were formulated at that time, in Aruba. They are complementary to the Forty Recommendations of the Financial Action Task Force established by the Group of Seven at the 1989 Paris G7 Summit. In 1992, CFATF members signed the Kingston Declaration, which endorsed and affirmed their commitment to implement the FATF and Aruba Recommendations, the OAS Model Regulations, and the 1988 U.N. Convention.
FATF and CFATF Recommendations are considered to constitute the *”international standards”* for anti-money laundering.
The FATF is collaborating with the IMF and the World Bank on an important initiative in the international fight against money laundering. After having endorsed the FATF 40 Recommendations, the IMF, World Bank and the FATF have developed in recent months a common methodology to assess the countries in the world in compliance with the FATF Recommendations. To this end, this methodology will be used by the FATF, the IMF and the World Bank.
The FATF expects to complete a current review of its 40 Recommendations during the first half of 2003. At the conclusion of this review, it will issue updated Recommendations.
As Chairman of the CFATF, Minister Sears says he looks forward to the opportunity to participate in the evolving global standards in the fight against money laundering, and to sensitise the multi-lateral fora on the specific concerns of the countries in this region. * “We also want to contribute in a very meaningful way to the methodologies used to assess the anti-money laundering work and integrity systems of our respective economies within our region,”* he said.