{"id":468,"date":"2024-07-06T16:14:28","date_gmt":"2024-07-06T16:14:28","guid":{"rendered":"https:\/\/cedsto3.dreamhosters.com\/mbh\/enhancements-to-the-bahamas-anti-money-laundering-regime\/"},"modified":"2024-07-07T13:43:25","modified_gmt":"2024-07-07T13:43:25","slug":"enhancements-to-the-bahamas-anti-money-laundering-regime","status":"publish","type":"post","link":"https:\/\/cedsto3.dreamhosters.com\/mbh\/enhancements-to-the-bahamas-anti-money-laundering-regime\/","title":{"rendered":"Enhancements to The Bahamas\u2019 Anti-Money Laundering Regime"},"content":{"rendered":"\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-av_section-76fcdba7f378bcd724711bb4229931c1\">\n.avia-section.av-av_section-76fcdba7f378bcd724711bb4229931c1{\nbackground-color:#3d3d3d;\nbackground-image:url(https:\/\/cedsto3.dreamhosters.com\/mbh\/wp-content\/uploads\/2024\/07\/page-resource-bg.jpg);\nbackground-repeat:no-repeat;\nbackground-position:50% 0%;\nbackground-attachment:scroll;\n}\n<\/style>\n<div id='av_section_1'  class='avia-section av-av_section-76fcdba7f378bcd724711bb4229931c1 main_color avia-section-no-padding avia-no-border-styling  avia-builder-el-0  el_before_av_section  avia-builder-el-first  avia-full-stretch avia-bg-style-scroll av-minimum-height av-minimum-height-60 av-height-percent  container_wrap fullsize'  data-section-bg-repeat='stretch' data-av_minimum_height_pc='60' data-av_min_height_opt='percent'><div class='container av-section-cont-open' ><main  role=\"main\" itemprop=\"mainContentOfPage\"  class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-468'><div class='entry-content-wrapper clearfix'>\n<div class='flex_column_table av-av_three_fifth-b1ac823ad80d104edd5272d6a6b85521 sc-av_three_fifth av-equal-height-column-flextable'><div  class='flex_column av-av_three_fifth-b1ac823ad80d104edd5272d6a6b85521 av_three_fifth  avia-builder-el-1  el_before_av_two_fifth  avia-builder-el-first  first flex_column_table_cell av-equal-height-column av-align-bottom  '     ><style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-lybls4j2-d1a4dc2273b20caf20f7b653c756be62\">\n#top .av-special-heading.av-lybls4j2-d1a4dc2273b20caf20f7b653c756be62{\npadding-bottom:10px;\ncolor:#ffffff;\nfont-size:42px;\n}\nbody .av-special-heading.av-lybls4j2-d1a4dc2273b20caf20f7b653c756be62 .av-special-heading-tag .heading-char{\nfont-size:25px;\n}\n#top #wrap_all .av-special-heading.av-lybls4j2-d1a4dc2273b20caf20f7b653c756be62 .av-special-heading-tag{\nfont-size:42px;\n}\n.av-special-heading.av-lybls4j2-d1a4dc2273b20caf20f7b653c756be62 .special-heading-inner-border{\nborder-color:#ffffff;\n}\n.av-special-heading.av-lybls4j2-d1a4dc2273b20caf20f7b653c756be62 .av-subheading{\nfont-size:15px;\n}\n\n@media only screen and (min-width: 480px) and (max-width: 767px){ \n#top #wrap_all .av-special-heading.av-lybls4j2-d1a4dc2273b20caf20f7b653c756be62 .av-special-heading-tag{\nfont-size:0.8em;\n}\n}\n\n@media only screen and (max-width: 479px){ \n#top #wrap_all .av-special-heading.av-lybls4j2-d1a4dc2273b20caf20f7b653c756be62 .av-special-heading-tag{\nfont-size:0.8em;\n}\n}\n<\/style>\n<div  class='av-special-heading av-lybls4j2-d1a4dc2273b20caf20f7b653c756be62 av-special-heading-h1 custom-color-heading blockquote modern-quote  avia-builder-el-2  avia-builder-el-no-sibling  av-inherit-size'><h1 class='av-special-heading-tag'  itemprop=\"headline\"  >Enhancements to The Bahamas\u2019 Anti-Money Laundering Regime<\/h1><div class=\"special-heading-border\"><div class=\"special-heading-inner-border\"><\/div><\/div><\/div><\/div><div class='av-flex-placeholder'><\/div><div  class='flex_column av-av_two_fifth-ae2cd6b1f49e83f5dbcce51aa112b1d0 av_two_fifth  avia-builder-el-3  el_after_av_three_fifth  avia-builder-el-last  flex_column_table_cell av-equal-height-column av-align-bottom  '     ><\/div><\/div><!--close column table wrapper. Autoclose: 1 --><\/div><\/div><\/main><!-- close content main element --><\/div><\/div><div id='av_section_2'  class='avia-section av-av_section-7af9a1a620ce4f39c9b9e05e20762bd9 main_color avia-section-default avia-no-border-styling  avia-builder-el-4  el_after_av_section  el_before_av_section  avia-bg-style-scroll container_wrap fullsize'  ><div class='container av-section-cont-open' ><div class='template-page content  av-content-full alpha units'><div class='post-entry post-entry-type-page post-entry-468'><div class='entry-content-wrapper clearfix'>\n<div class='flex_column_table av-av_four_fifth-8a58639afa400a410e48c8abf84368e2 sc-av_four_fifth av-equal-height-column-flextable'>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-av_four_fifth-8a58639afa400a410e48c8abf84368e2\">\n.flex_column.av-av_four_fifth-8a58639afa400a410e48c8abf84368e2{\nbackground-color:#ffffff;\n}\n<\/style>\n<div  class='flex_column av-av_four_fifth-8a58639afa400a410e48c8abf84368e2 av_four_fifth  avia-builder-el-5  el_before_av_three_fourth  avia-builder-el-first  first flex_column_table_cell av-equal-height-column av-align-bottom  '     ><p><br \/>\n\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-av_hr-3a876428eececa9d35452247ddb053af\">\n#top .hr.hr-invisible.av-av_hr-3a876428eececa9d35452247ddb053af{\nheight:50px;\n}\n<\/style>\n<div  class='hr av-av_hr-3a876428eececa9d35452247ddb053af hr-invisible  avia-builder-el-7  el_after_av_codeblock  avia-builder-el-last '><span class='hr-inner '><span class=\"hr-inner-style\"><\/span><\/span><\/div><\/p><\/div><\/div><!--close column table wrapper. Autoclose: 1 --><div class='flex_column_table av-av_three_fourth-8a58639afa400a410e48c8abf84368e2 sc-av_three_fourth av-equal-height-column-flextable'>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-av_three_fourth-8a58639afa400a410e48c8abf84368e2\">\n.flex_column.av-av_three_fourth-8a58639afa400a410e48c8abf84368e2{\nbackground-color:#ffffff;\n}\n<\/style>\n<div  class='flex_column av-av_three_fourth-8a58639afa400a410e48c8abf84368e2 av_three_fourth  avia-builder-el-8  el_after_av_four_fifth  el_before_av_one_fourth  first flex_column_table_cell av-equal-height-column av-align-bottom  '     ><section  class='av_textblock_section av-lyblshch-536b9d7d57d302d394562fa080f80fad '   itemscope=\"itemscope\" itemtype=\"https:\/\/schema.org\/BlogPosting\" itemprop=\"blogPost\" ><div class='avia_textblock'  itemprop=\"text\" ><h3>Enhancements to The Bahamas\u2019 Anti-Money Laundering Regime: the Financial Transactions Reporting Act, 2018<\/h3>\n<p>By: Lemarque Campbell, McKinney, Bancroft &amp; Hughes<\/p>\n<h3>Introduction<\/h3>\n<p>In the Mutual Evaluation Report of July 2017, the Caribbean Financial Action Task Force (\u201cCFATF\u201d) identified substantial gaps in The Bahamas\u2019 legal and regulatory regime relating to Anti-Money Laundering\/Combating the Financing of Terrorism (\u201cAML\/CFT\u201d). The Bahamian Government has sought to improve the AML\/CFT regime in The Bahamas through the recent enactment of the Financial Transactions Reporting Act, 2018 (the \u201cFTRA\u201d). The FTRA, which came into force on 25th May, 2018, repeals and replaces the Financial Transactions Reporting Act of 2000 (the \u201c2000 Act\u201d) and provides enhanced<br \/>\nprovisions to address the gaps identified in the CFATF\u2019s Mutual Evaluation Report.<\/p>\n<p>The FTRA imposes mandatory obligations on financial institutions operating in The Bahamas to (i) verify the identity of existing and prospective customers and clients; (ii) maintain verification and transaction records for prescribed periods; and (iii) report suspicious transactions, which involve the proceeds of criminal conduct.<\/p>\n<h3>Significant Enhancements under the FTRA<\/h3>\n<p>The FTRA retains a number of provisions from the 2000 Act, but contains new and\u00a0enhanced provisions regarding (i) financial institutions\u2019 risk assessment and internal control obligations; (ii) oversight of foreign branches and subsidiaries; (iii) prohibition of conducting business with shell banks (i.e. banks which have no physical presence in the jurisdiction in which they are incorporated and licensed); (iv) establishment of anonymous facilities; (v) establishment of correspondent relationships; and (vi) sanctions and<br \/>\noffences for non-compliance with the provisions of the FTRA.<\/p>\n<h3>Obligations for Financial Institutions<\/h3>\n<p>The following provides a non-exhaustive list of the notable obligations for financial institutions operating in The Bahamas under the FTRA:<\/p>\n<p style=\"padding-left: 30px;\">1) Risk Assessment: Every financial institution must (i) take appropriate measures to identify, assess and understand its identified risk in relation to its facility holders; and (ii) develop and implement a comprehensive risk management system, which incorporates continuous identification, measurement, monitoring and controlling of identified risks. Additionally, every financial institution should ensure that the outcomes of its risk assessments are documented in writing, kept up-to-date and made available to relevant regulatory bodies upon request.<\/p>\n<p style=\"padding-left: 30px;\">2) Customer Due Diligence: Every financial institution must undertake customer due diligence, identification and verification measures when opening client accounts or establishing a business relationship with a facility holder, which includes identifying and verifying the beneficial owners of a facility. In this regard, financial institutions shall not establish or maintain anonymous accounts or accounts in fictitious names. Additionally, financial institutions should ensure that they undertake risk based on-going due diligence throughout the course of each business relationship and enhanced customer due diligence measures in certain scenarios.<\/p>\n<p style=\"padding-left: 30px;\">3) Record Keeping: Every financial institution must maintain all books and records with respect to its facility holders and transactions including, <em>inter alia<\/em>, records obtained through customer due diligence measures, documents evidencing the\u00a0identity of facility holders and beneficial owners and records of all domestic and international transactions. All of those records shall be maintained for not less than five years after the business relationship has ended or from the date of the transaction.<\/p>\n<p style=\"padding-left: 30px;\">4) Internal Controls: Every financial institution must develop and implement procedures for the prevention of activities related to identified risks, as well as designate a compliance officer at the senior management level to be responsible for the implementation and on-going maintenance of its internal procedures and controls. No financial institution shall deal with a shell bank. Further, a financial institution shall require foreign branches and any subsidiaries over which it has control to implement the requirements of the FTRA to the extent that the applicable laws and regulations in the jurisdiction where the foreign branch or subsidiary is domiciled so permit.<\/p>\n<p style=\"padding-left: 30px;\">5) Suspicious Transactions: Every financial institution must report suspicious transactions as soon as practicable to the Financial Intelligence Unit.<\/p>\n<h3>Offences and Penalties<\/h3>\n<p>Any financial institution, which includes a director, partner, officer, principal or employee thereof, which fails to comply with its obligations under the FTRA, commits an offence and is liable upon summary conviction to imprisonment for a term of up to five (5) years or to a fine of up to five hundred thousand dollars ($500,000.00) or both. Further, any financial institution convicted of an offence is subject to additional regulatory sanctions and measures and may also be banned from conducting business for a period of time.<\/p>\n<p>The FTRA also introduces administrative penalties for non-compliance with its provisions. In this regard, fines range from fifty thousand dollars ($50,000.00) for individuals to two hundred thousand dollars ($200,000.00) for companies.<\/p>\n<h3>Conclusion<\/h3>\n<p>With the enhanced provisions contained in the FTRA, financial institutions in<br \/>\nThe Bahamas are encouraged to continuously review their risk assessment, customer due diligence and internal controls and measures to ensure that they remain compliant with the FTRA and the Regulations promulgated thereunder.<\/p>\n<p style=\"font-weight: 400;\">The above article was published by Lexology on 31<sup>st<\/sup>\u00a0July 2018:<\/p>\n<p style=\"font-weight: 400;\"><a href=\"https:\/\/www.lexology.com\/library\/detail.aspx?g=63c372eb-85e1-4327-ab5f-b6af91396c31&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+General+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2018-08-01&amp;utm_term\" target=\"_blank\" rel=\"noopener\" data-saferedirecturl=\"https:\/\/www.google.com\/url?hl=en&amp;q=https:\/\/www.lexology.com\/library\/detail.aspx?g%3D63c372eb-85e1-4327-ab5f-b6af91396c31%26utm_source%3DLexology%2BDaily%2BNewsfeed%26utm_medium%3DHTML%2Bemail%2B-%2BBody%2B-%2BGeneral%2Bsection%26utm_campaign%3DLexology%2Bsubscriber%2Bdaily%2Bfeed%26utm_content%3DLexology%2BDaily%2BNewsfeed%2B2018-08-01%26utm_term&amp;source=gmail&amp;ust=1534339254897000&amp;usg=AFQjCNEuUcwJPnKIrZ7jWL9wO3DcbgMcsA\">https:\/\/www.lexology.com\/library\/detail.aspx?g=63c372eb-85e1-4327-ab5f-b6af91396c31&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+General+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2018-08-01&amp;utm_term<\/a><\/p>\n<p style=\"font-weight: 400;\"><u>Lemarque Campbell:<\/u><\/p>\n<p style=\"font-weight: 400;\">Lemarque Campbell is an associate of the firm who specializes in Banking &amp; Finance, Admiralty and Shipping, Corporate &amp; Commercial Litigation and Dispute Resolution.<\/p>\n<\/div><\/section><br \/>\n<div  class='avia-button-wrap av-lyblsp7a-9787db042252f61f2e3c228aa050892f-wrap avia-button-left  avia-builder-el-10  el_after_av_textblock  avia-builder-el-last '><a href='https:\/\/cedsto3.dreamhosters.com\/mbh\/wp-content\/uploads\/2024\/07\/Enhancements-to-the-Bahamas-Anti-Money-Laundering-Regime-The-Financial-Transaction-Reporting-Act-2018.pdf'  class='avia-button av-lyblsp7a-9787db042252f61f2e3c228aa050892f av-link-btn avia-icon_select-yes-right-icon avia-size-large avia-position-left av-icon-on-hover avia-color-theme-color'  target=\"_blank\"  rel=\"noopener noreferrer\" ><span class='avia_iconbox_title' >DOWNLOAD PDF<\/span><span class='avia_button_icon avia_button_icon_right' aria-hidden='true' data-av_icon='\ue879' data-av_iconfont='entypo-fontello'><\/span><\/a><\/div><\/p><\/div><div class='av-flex-placeholder'><\/div>\n<style type=\"text\/css\" data-created_by=\"avia_inline_auto\" id=\"style-css-av-av_one_fourth-b9b2a0bc9aa2512cefc5e0e7e7441cc9\">\n.flex_column.av-av_one_fourth-b9b2a0bc9aa2512cefc5e0e7e7441cc9{\nbackground-color:#ffffff;\n}\n<\/style>\n<div  class='flex_column av-av_one_fourth-b9b2a0bc9aa2512cefc5e0e7e7441cc9 av_one_fourth  avia-builder-el-11  el_after_av_three_fourth  avia-builder-el-last  flex_column_table_cell av-equal-height-column av-align-bottom  '     ><\/div><\/div><!--close column table wrapper. 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