The Bahamas has a long-standing commitment to be a responsible member of the international community. This commitment extends to having a responsible financial services centre, and complying with international standards for the conduct of business that are applicable to all financial centres.
It has created an industry that is well equipped to compete and succeed in the increasingly regulated environment in which financial services now operate. The Government of The Bahamas has taken measures to:
- protect the reputation of The Bahamas as both a responsible and reputable international financial centreprevent the use of the banking system for criminal purposes;
- prevent de-stabilization of the domestic economy while promoting legitimate economic activity;
- anticipate and implement effective counter measures to new/emerging trends in money laundering, terrorism financing and related activities; and
- assist relevant authorities in other countries in fighting money laundering and terrorism financing through the timely sharing of information.
Anti-Money Laundering/Countering of Terrorist Financing
The Bahamas operates in a globally integrated market for financial services. As a result the country’s counter-money laundering legislation meets global best practices and standards.
The continuous review of the AML/CFT laws, policies and practices of The Bahamas forms the cornerstone of the jurisdiction’s commitment to uphold international standards and to protect the fine reputation of the country’s financial services sector. The Bahamas is a member of the Caribbean Financial Action Task Force (“CFATF”) a FATF-style regional body comprised of thirty member states from the Caribbean Basin. The CFATF conducts peer reviews of its members’ AML/CFT laws, policies and procedures and assesses the extent to which countries comply with the Financial Action Task Force’s 40 + 9 Recommendations for preventing money laundering and countering the financing of terrorism. The jurisdiction’s efforts to continually assess and strengthen its AML/CFT framework are on-going.
The Ministry of Finance is the designated Competent Authority under the various Tax Information Exchange Agreements (TIEAs) to which The Bahamas is a signatory.
The Bahamas’ status in international agencies such as the United Nations, the Commonwealth, OAS and CARICOM allows it to keep pace with international standards. In addition it continues to signal a willingness to operate within negotiated parameters for the global delivery of financial services with its entry into the EU Economic Partnership Agreement and by progressing its accession to the WTO.
The International Legal Cooperation Unit (ILCU) in the Attorney General’s office is responsible for dealing with all requests for legal assistance from foreign jurisdictions. Several pieces of legislation allow ICLU to deal with requests, including the Mutual Legal Assistance (Criminal Matters) Act; the Criminal Justice (International Cooperation) Act; the Proceeds of Crime Act (which replaced the Money Laundering Act; the Financial Transaction Reporting Act; and the International Obligations (Economic and Ancillary Measures) Act.
Primary Regulatory Agencies
Central Bank of The Bahamas
With more than 270 banks and trust companies operating in The Bahamas, and the banking industry itself the cornerstone of the country’s financial services industry, the Central Bank plays a lead role among the country’s regulatory agencies and enjoys full autonomy. Its stature within The Bahamas is reinforced by its longstanding presence in the jurisdiction; The Bahamas in fact has been regulating banks and trust companies in The Bahamas since 1965.
The Central Bank fills the traditional roles as issuer of legal tender, banker to both domestic banks and the government, and regulator and supervisor of the banking sector. As supervisor of banks, the Central Bank promotes the soundness of banks and trust companies through the effective application of international regulatory and supervisory standards. It is a member of various regional and international agencies, including the Association of Banks of the Americas (ASBA); Offshore Group of Banking Supervisors (OGBS); Caribbean Group of Banking Supervisor (CGBS); and also serves on the Financial Expert (Mutual Evaluations) Committee of the Caribbean Financial Action Task Force (CFATF). The OGBS has worked closely with the Basel Committee on the supervision of cross border banking, as well as with the Financial Action Task Force (FATF) on anti-money laundering initiatives.
Continued vigilance is required to secure an effective regulatory environment. Legislative initiatives have been designed to provide products relevant to the international market place, to enhance the regulatory oversight and supervision of the financial service sector, and to further its counter money laundering regime. These initiatives include a focus on risk management and continually updated AML / Counter Terrorism Financing guidelines following the publication of revised FATF 40 plus 9 special recommendations. In all, the Bank’s overall policy objective is the promotion of a stable economic environment conducive to high levels of domestic production, employment and growth.
Securities Commission of The Bahamas
The Securities Commission (SCB) was established in 1995. As part of its endeavour to keep abreast in an ever-changing global regulatory environment, and to ensure a Bahamian contribution toward improving the efficiency and conduct of international markets, the SCB is a member of the International Organization of Securities Commissions (IOSCO) – Signatory A Status under its MMoU – and the Council of Securities Regulators (COSRA). The SCB’s mission is to effectively oversee and regulate the activities of the securities and capital markets, and to protect investors, while strengthening public and institutional confidence in the integrity of those markets.
The principal areas of focus are the securities industry, including the oversight of broker dealing and securities investment advisory services, and investment fund management and administration.
Insurance Commission of The Bahamas
The Insurance Commission of The Bahamas is responsible for the prudential regulation of all insurance activity in or through The Bahamas. It is concerned with the ongoing monitoring and control of insurers, agents, brokers, salesman, underwriting managers and external insurers.
Its mandate is to undertake all of the due diligence necessary to guarantee that companies which come to The Bahamas are reputable, high quality businesses and its supervisory regime also is geared to ensure that it safeguards the interests of the policy holders involved. The ICB has developed a risk-based supervisory methodology, and a principles-based approach which allows flexibility.
The Bahamas is a member of the International Association of Insurance Supervisors (IAIS) which is recognised as the standard setting body for insurance regulators. It also is a member of the Group of Offshore Insurance Supervisors (OGIS) and a member of the Caribbean Association of Insurance Supervisors. Organisations such as these instill a consistent and frequent exchange of regulatory information that helps the Regulator to craft and hone world-class legislation.