These included recommendations to commence a review of the overall regulatory framework; to expedite the promulgation of appropriate regulations and guidelines; to document the internal systems and procedures in the regulatory agencies; to expand the scope of the on-site examination process; to permit the domestic regulators to exchange information on an entirely reciprocal basis; and to enact legislation relating to the financing of terrorism.
The Government appointed a Commission in May 2002, under the chairmanship of the Governor of the Central Bank of The Bahamas, to examine the current structure and to make recommendations for possible reform.
The Secretary to the Commission, Mr. Hillary Deveaux, was formally appointed Acting Executive Director effective December 1, 2002.
Subsequent to the mission, the Basel Committee published a paper, in January 2003, in which it defined “shell” banks as “banks that have no physical presence (i.e., meaningful mind and management) in the country where they are incorporated and licensed, and are not affiliated to any financial services group that is subject to effective consolidated supervision.” A number of the managed banks in The Bahamas exhibit the key features identified in this definition.
The Terrorism Bill was tabled in Parliament on June 25, 2003, and was still being debated when this report was finalized. The mission has been unable to review the provisions, but notes the authorities’ intention that the legislation should address relevant issues raised in this report.
The government subsequently passed three e-commerce enabling Acts in April 2003: The Electronic Communications and Transactions Act, the Computer Misuse Act, and the Data Protection (privacy of Personal Information) Act. With the exception of the Data Protection (POPI) Act, these Acts came into force on June 16, 2003.
The date for hearing of this matter has been set for February 2004.
The funds are exempt from section 3(1) of the Mutual Funds Act 1995, which, among other things, requires a mutual fund to hold a license issued either by the SCB or by a Mutual Fund Administrator that itself holds an unrestricted mutual fund administrator’s license. All funds presently categorized as “exempt” will be regulated under the Investment Funds Act 2003, which has been passed in both Houses of Parliament and is awaiting an appointed date notice for enforcement.
As discussed later, in order to minimize regulatory overlap, the regulators have executed an MOU which recognizes a primary regulator that has responsibility for AML supervision of its licensees. In the case of the financial and corporate service providers and the insurance sector, the Compliance Commission supervises AML compliance on behalf of both the Registrar of Insurance and the Inspector of Financial and Corporate Service Providers.
This group comprises the central bank, the Securities Commission, the Inspector of Financial Services, the Registrar of Insurance and the Compliance Commission.
The assessment was undertaken by Messrs. Tanya Smith (Office for the Comptroller of Currency) and Laurent Ettori (French Commission Bancaire).
This assessment was undertaken by Mr. Richard Britton (consultant, MFD, formerly UK Securities and Investment Board).
The assessment was undertaken by Mr. Richard Chalmers (mission chief, MFD); Ms. Joy Smallwood (LEG); Messrs. Richard Britton, Christopher Cooke, Laurent Ettori, and Ms. Tanya Smith (all consultants, MFD). The independent law enforcement expert for the AML/CFT assessment was Mr. Russell Ursula of the Caribbean Financial Action Task Force (CFATF) Secretariat.
The Terrorism Bill was tabled in Parliament on June 25, 2003.
The Egmont Group defines a FIU as: “a central, national agency responsible for receiving (and, as permitted, requesting), analyzing, and disseminating to the competent authorities disclosures of financial information (i) concerning suspected proceeds of crime, or (ii) required by national legislation or regulation, in order to counter money laundering.” See www.fatf-gafi.org “Other Initiatives.”