Key Industry Legislation
In 2000, the Government embarked on an ambitious overhaul of financial sector legislation enacting nine new laws on the 29th of December. Together, these new laws provide for more comprehensive and enhanced supervision of financial institutions, corporate service providers and international business companies; while establishing a more coordinated system of deterrence against money laundering and other criminal abuses within the financial sector; in the context of a framework that allows for greater international cooperation in the oversight of the financial system. The new laws included:
- The Banks and Trust Companies Regulation Act, 2000
- The Central Bank of The Bahamas Act, 2000
- The Financial Intelligence Unit Act, 2000
- The Proceeds of Crime Act, 2000
- The Financial and Corporate Service Providers Act, 2000
- The Financial Transactions Reporting Act, 2000
- The International Business Companies Act, 2000
- The Evidence (Proceedings in other Jurisdictions) Act, 2000
- Criminal Justice (International Cooperation) Act, 2000
- The Anti-Terrorism Act, 2004
Key features of the new enactments included: enhanced powers of the Governor of the Central Bank to issue and revoke licences to carry on banking and/or trust business from within the Commonwealth of The Bahamas; operational independence of the Central Bank in supervision and regulation of banks and trust companies; increased provision for information sharing with other regulators for supervisory purposes; provisions upgrading banking supervision, including, but not limited to, on-site examination of banks and trust companies, as well as examinations by appropriate overseas supervisory authorities; the upgrade and broadening of KYC requirements and suspicious and unusual transactions reporting; establishment of a Financial Intelligence Unit (FIU); introduction of licensing of financial and corporate service providers, such as lawyers, accountants and management companies; the removal of bearer shares from International Business Companies (IBCs) shareholding structures, and the granting of permission for Bahamians to own IBCs.
In more recent developments, at the end of December, 2003, the Government enacted amendments to the Financial Transactions Reporting Act (FRTA) and the Financial Transactions Reporting Regulations (FTRR), which provided the basis for financial institutions to implement a risk based approach to customer due diligence and anti-money laundering procedure. The amendments realign The Bahamas' KYC regime with the Financial Action Task Force's (FATF) Revised 40 Recommendations issued in June 2003, with specific regard to the implementation of a risk rating framework for assessing the money laundering risks that client relationships pose to licensees.
Additionally, in 2004 Parliament enacted the Anti-Terrorism Act, 2004, which addressed several of the FATF's Special Recommendations. In addition to defining the offence of terrorism and criminalizing the financing of terrorism, the law provides for the seizure and confiscation of terrorist assets; reporting of suspicious transactions related to terrorist financing; and strengthening of existing mechanisms for cooperation in this regard between The Bahamas and other countries.