The Central Bank of the Bahamas is hosting a week-long workshop for Central Bank Lawyers under the theme *”Prevention of Money Laundering and Terrorist Financing: National and International Aspects”.*
The June 9-13 event is being co-sponsored and organised by the Bank for International Settlements (BIS) and the Center for Latin American Monetary Studies (CEMLA). BIS’s Pierre Panchaud, Assistant General Counsel, and Gregor Heinrich, Chief Representative – Office for the Americas, both addressed participants on the opening day, as did Kenneth Gilmore Coates-Spry, CEMLA’s Director General.
In his opening remarks, Central Bank of The Bahamas Governor Julian Francis pointed out national concerns over the threat that money laundering, coupled with terrorist financing, poses to the financial system and reputation. He emphasised that the nation has committed itself to ensuring that its financial services regime is not used for money laundering nor terrorist financing, and *”has taken all the appropriate measures to comply with international best practices in these areas.”*
**Legislation & Regulations**
Workshop participants were told that The Bahamas maintains a firm position in the fight against money laundering, and has had anti-money laundering legislation in place since 1987, the first international financial services centre to do so. A new and comprehensive legislative regime was put in place in 2000, complementing earlier efforts. And, currently, the Government is drafting legislation for the prevention of terrorism and terrorist financing.
Through its examination of banking institutions, The Central Bank seeks to ensure that licensees have the proper anti-money laundering systems which would enable them to prevent their institutions from being used for money laundering — and to detect and report suspicious transactions to the Financial Intelligence Unit, or law enforcement agencies, in a timely fashion.
Governor Francis made reference to the Financial Action Task Force’s international standards on the prevention of money laundering and the combating of terrorist financing — the 40 Recommendations plus 8 Special Recommendations. The FATF is currently in the process of revising these recommendations after strong objection was raised by countries that were designated as non-cooperative in the fight against money laundering in June 2000. *”The criteria used to designate countries caused affected jurisdictions to charge that there is no level playing field between FATF member countries and everyone else,”*said Mr. Francis.
An equitable approach by the IMF (which has taken on a new assessment role for OFCs) and the international standard-setting bodies – taking into account the constraints of smaller economies – would do well to remove the mistrust and suspicion that exists between the G-10 and these jurisdictions, according to Mr. Francis. It is anticipated that the IMF will have an objective voice.
*”We only ask that the international standard setting bodies apply to smaller economies, like that of The Bahamas, the same indulgence afforded to their own member countries,”* Governor Francis said.
**Caribbean Anti-Money Laundering Infrastructure**
Bahamas Attorney General and Minister of Education, the Hon. Alfred Sears, also spoke on the opening day of the Workshop. He, too, called for a level playing field and noted that as Chairman of the Caribbean Financial Action Task Force (CFATF) he has been asked to promote a United Nations Convention on Money Laundering, to ensure that fair practices apply to all member countries.
He pointed out that his mandate is to promote the convening of a global forum, which would allow UN member countries to participate in the prescribing or the creation of a global anti-money laundering standard, and the fair and equitable application and enforcement of such standards to all nations.
According to the CFATF Chairman, member countries have expended a considerable amount of resources to reform their financial services industries. In The Bahamas, e.g., some $35 million reportedly has been spent to ensure the efficient operation of the new financial regime. Considerable amounts still are being expended on the Compliance Commission, the Inspector of Financial and Corporate Service Providers, the Inspector of Banks and Trust Companies, the International Legal Cooperation Unit in the Office of the Attorney General and the Financial Intelligence Unit.
The region as a whole has incurred increased costs – in some cases coupled with loss of legitimate business — in complying with the demands of the FATF to bring their financial services sector in compliance with international standards and practices.
*”The CFATF Secretariat is being reorganised to ensure that the countries of the Caribbean Basin region benefit from the efficient and effective operation of one strong, transparent, viable and well-respected regional institution on anti-money laundering and combating the financing of terrorism issues,”*said Mr. Sears. Additionally, workshops have been scheduled to update CFATF and FATF members on developments as they relate to their synchronous goal of preventing money laundering and the financing of terrorism in the region.
*”The Caribbean Basin Region should now stand confident of its achievement and the strong robust nature of the regional anti-money laundering infrastructure which offers good examples of best practices for the rest of the world,”* concluded the Chairman.
The Bank for International Settlements is an international organisation, which fosters cooperation among central banks and other agencies in pursuit of monetary and financial stability. It operates the Financial Stability Institute (FSI) jointly with the Basel Committee on Banking Supervision. The BIS also hosts the secretariats of the Financial Stability Forum (FSF), the International Association of Deposit Insurers (IADI), and the International Association of Insurance Supervisors (IAIS).
CEMLA (Centro Estudios Monetarios Latinoamericanos) was formed to (1) promote a better understanding of monetary and banking matters in Latin America and the Caribbean, as well as the pertinent aspects of fiscal and exchange rate policies; (2) assist in improving the qualifications of central bank and other financial agencies personnel in Latin America and the Caribbean through the organisation of seminars and special training courses and the publication of surveys and research studies; (3) conduct research and systematise the results of past experience in the above fields; and (4) inform on developments in regional and international monetary and financial policy issues. It is based in Mexico.