**Edward Smith, Acting Director
Bahamas Financial Intelligence Unit**
**The Bahamas and Australia Agree To Co-operate In The Fight Against Money Laundering**
The Bahamas and Australia have signed a Memorandum of Understanding under which the two countries will exchange financial intelligence to combat money laundering and terrorism financing.
Acting Director of the Bahamas FIU Edward Smith says the agreement was necessary to allow AUSTRAC to comply fully with its responsibilities as a member of The Egmont Group, in relation to its cooperation with The Bahamas. (The Egmont Group is comprised of 84 Financial Intelligence Units, from various countries around the world, responsible for receiving, analysing and disseminating financial information reported pursuant to their respective anti-money laundering and anti-terrorist financing regimes.)
At the time of signing, the Australian Minister of Justice and Customs, Senator Chris Ellison, said this would *”further boost global cooperation in the ongoing battle against money laundering and the financing of terrorism.”* Minister Ellison also recognised The Bahamas as an important strategic partner for AUSTRAC, being its first link to the Caribbean region.
The Bahamas FIU was established in December 2000, reflecting the jurisdiction’s resolve to maintain its own responsible, independent path against the backdrop of evolving standards for international financial centres.
Under the terms of the Financial Intelligence Unit Act (FIUA), the FIU in The Bahamas may enter into written agreements or arrangements with foreign FIUs as the Director may consider necessary or desirable for the discharge or performance of its functions.
The agreement signed between the Financial Intelligence Unit (FIU) of the Bahamas and AUSTRAC, its counterpart in Australia, is the third of similar MOUs which The Bahamas has negotiated with agencies of other countries responsible for information exchange in connection with the global effort to combat money laundering and the financing of terrorism.
Earlier agreements have been signed with Belgium and Guatemala. The Acting Director reports that The Bahamas is also negotiating agreements with other national FIUs where such are considered necessary for those Units to establish the collaborative arrangements mandated by the Egmont Group. It is to be noted that the Financial Intelligence Unit Act in The Bahamas already provides the FIU with the ability to cooperate with other units under specifically defined terms relating to predicate offences for money laundering and any serious offence under Bahamian law.
The Government of The Bahamas has placed a great deal of support behind the country’s FIU to ensure it is effective in carrying out its mandate. Particularly, The Bahamas FIU has statutory footing, providing it with clout lacking in many other jurisdictions.
The Bahamas FIU operates as an autonomous body under the Office of the Attorney General, and has the administrative power to issue an injunction to stop anyone from completing a transaction for a period of up to three days upon receipt of a suspicious transaction report (STR), if it considers such an action to be necessary or appropriate. Upon receipt of a request from the Commissioner of Police or a foreign FIU, a bank account may be frozen for up to five days by the FIU, if it relates to an offence under The Bahamas Proceeds of Crime Act 2000 (POCA), which covers drug trafficking, money laundering and other indictable crimes.
The importance of exchanging information for financial intelligence purposes at FIU levels cannot be underestimated, according to Acting Director Smith. Countering money laundering activities and effectively stopping the flow of illegal proceeds depend to a large extent on timeliness of action. The autonomy of operations enjoyed by FIUs facilitates the process of restraint and confiscation. In essence, says Acting Director Smith, FIUs working together promote the ability to wage this war “at the front”.
*”The collaboration with sister FIUs has worked extremely well,”* the Acting Director points out. *”We have concrete examples where we have been able to provide valuable assistance. Similarly, cooperation received from our FIU colleagues has helped us here in The Bahamas.”* He notes a case in 2003 in which the unit was instrumental in recovering and returning some $1/2 million to a local financial services institution as a direct result of cooperation with another FIU in pursuing a case of fraud.
The Bahamas FIU is represented on the Outreach Working Group of the Egmont Group, through which it has been active in on-site inspections and certifications for a number of new financial intelligence units in the region. In this connection, it has sponsored FIUs in Barbados, Anguilla, Antigua and Barbuda, Dominica and St. Vincent and the Grenadines. Currently, The Bahamas is in the process of sponsoring units in Belize, Grenada, St. Kitts & Nevis and Trinidad & Tobago.
Operating with a full time staff of 14, the FIU in The Bahamas has seen requests from foreign FIUs steadily increase since its formation. In 2003 there were 67 requests compared to the 49 and 22 requests received in 2002 and 2001, respectively. In terms of Suspicious Transactions Reports (STRs), 176 were received in 2003, compared with 160 in 2002 and 246 in 2001. Mr. Smith says the level of requests made by The Bahamas to other jurisdictions is approximately one third of incoming requests.
Like other statutory FIUs, the FIU in The Bahamas is empowered to require the production of information it considers necessary for its functions. Failure to disclose this information is punishable by a fine of $50,000, or a prison term or both. Bound by its own laws, penalties for tipping off a suspected party or leaking information are severe, including imprisonment and/or a fine of up to $50,000.