In its Compliance North America feature this week, *Complinet* features the annual Anti-Money Laundering Seminar hosted last week by the Bahamas Association of Compliance Officers (BACO).

Complinet is the market-leading publisher of information and supplier of compliance and human resources solutions to the financial services sector. The release is duplicated below:

**Bahamas Compliance Officers Serious About Combatting Money Laundering**

The commitment of regulators and practitioners in the Bahamas in combating money laundering was clearly demonstrated at the recent Bahamas Association of Compliance Officers (BACO) annual AML Seminar. Legislation to fight against money laundering and address the shortcomings identified by the Financial Action Task Force, resulted in the Bahamas’ removal from the list of Non-Cooperative Countries and Territories in 2001 and served as the main focus of this one-day event.

The conference began with Cheryl Bazard, Regional Director of Compliance at FirstCaribbean International Bank summarising relevant AML Legislation. She discussed the need for documentation when determining whether a transaction meets the requirements for being reported as a suspicious transaction. She suggested creating and maintaining an internal form to document why a transaction was or was not reported. In addition to this practical tip, she described attributes that a Money Laundering Reporting Officer (MLRO) should possess as well as the tasks they should undertake. She also discussed “red flags,” suspicious transactions, “kyc” and verification of customers, record retention and risk ratings.

Rowena Bethal, Legal Counsel of the Ministry of Finance and a Commissioner of the Compliance Commission of The Bahamas – the entity responsible for the AML supervision of entities not otherwise regulated by either the Central Bank or the Securities Commission – spoke on the risk-based approach to “kyc.” After outlining some of the 2003 changes to the Financial Transaction Reporting Act (FTRA) and Financial Transactions Reporting Regulations (FTRR) and the need for on-going monitoring, training and internal procedures, she shed light on the types of activities the Commission considers low risk and high risk.

Bethal identified the following as **high risk indicators:**

· Intermediary arrangements where the real or beneficial owner of the funds is not the facility holder

· Financial service intermediaries that are not subject to prudential regulation

· Non-Bahamian residents

· Large cash transactions

· Persons resident in or maintaining trading operations in locations that are: known to have significant established organized crime environments, known drug producing/transshipment locations, experiencing political instability or with a history of political instability, designated by their relevant national authorities as high intensity financial crime areas or such similar designation

· Where the facility begins to display unusual patterns of activities which are not consistent with the stated purpose supplied by the facility holder

· Structuring of transactions

· Life Insurance Sector: single premium annuities where the premium exceeds the annual threshold of $2,500 and products where premiums that exceed annual threshold paid over the counter and easily refunded.

In the **low risk** category she identified:

· Facility holders identified as exempt in Regulation 5A (licensed financial institutions, central and local government agencies, publicly traded companies, regulated investment funds, etc)

· Bahamian residents whose accounts are serviced solely by salary deductions or financing arrangements via a prudentially regulated Bahamian financial institution

· Mortgages provided by Co-operative Societies.

The afternoon session of the conference began with a panel discussion of how the Bahamian money laundering laws and regulations affect and apply to the real estate, insurance and cooperative societies sectors. The panel consisted of David Morley from the Bahamas Real Estate Association, Calvin Thompson from the Teachers and Salaried Cooperative Workers Union, and Dr. Roger Brown, Registrar of Insurance Companies.

Kenra Francis from the Office of the Attorney General closed the seminar by discussing initiatives The Bahamas has undertaken to facilitate cooperation with other jurisdictions. She discussed Legal Mutual Assistance Treaties with the UK and Canada, and the Tax Information Exchange Agreement between the Bahamas and the US.

The successful conference was a clear demonstration of the continuing efforts to combat money laundering in The Bahamas and address global concerns.

April 28