Bahamas removed from FATF gray list

The Bahamas has been removed from the Financial Action Task Force’s (FATF’s) gray list of jurisdictions considered to have strategic deficiencies in their anti-money laundering/countering the financing of terrorism (AML/CFT) regimes, but Attorney General Carl Bethel said yesterday “the struggle continues”.

The Bahamas was officially added to the FATF list in October, after the country failed to complete a critical onsite assessment earlier this year, which was postponed because of COVID-19 travel restrictions.

In a statement, the FATF stated it congratulates The Bahamas for the significant progress it has made in improving its AML/CFT regime.

“The Bahamas has strengthened the effectiveness of its AML/CFT system and addressed related technical deficiencies to meet the commitments in its action plan and remedy the strategic deficiencies identified by the FATF in October 2018,” the regulator stated.

“The FATF now delists The Bahamas from the list of jurisdictions under increased monitoring. The Bahamas is therefore no longer subject to the FATF’s increased monitoring process. The Bahamas will continue to work with CFATF to improve further its AML/CFT regime.”

With this delisting now squared away, Bethel said the government is now focused on ensuring The Bahamas remains compliant while working toward being removed from the blacklist of the European Commission (EC), the executive branch of the European Union (EU).

The FATF advises the EU on which countries are compliant with its AML/CFT requirements.

“We still have to address the issue of the European blacklist by the European Commission, so that will be the next item on the agenda,” Bethel told Guardian Business. “However, notwithstanding the fact that we are off the blacklist, we will still have to continue to focus the energy of our regulators to ensure proper and full implementation of all of the laws and requirements that now are in place.

“It’s not simply a question of having the requirements in place, but also fully implementing them. So, the task will shift going forward into one of our task force meetings again every week as I’ve told them. Once we get past Christmas, we’ll start again in January and the issue then is how are you implementing all of these things.”

The Minnis administration has made it a priority to keep The Bahamas in good standing with international financial regulators, focusing a great portion of the legislative agenda on introducing and amending laws to make this jurisdiction compliant with the requirements of the EU, FATF and Organisation for Economic Cooperation and Development (OECD), among others.

The Bahamas is essentially compliant with 30 of the 40 requirements of the FATF, a record similar to the United States, among which is the requirement of financial institutions and other obliged entities to take precautionary measures and apply due diligence in the conduct of transactions of financial flows to and from high-risk third countries identified by the EU. Despite these efforts, The Bahamas has remained under the heavy scrutiny of these tax watchdogs.

“I’d like to just say thanks to the President of the FATF Dr. Marcus Pleyer, who responded to my direct request for them to make every effort to have our onsite and he certainly did so. I also want to thank the FATF Secretariat and the Caribbean Financial Action Task Force’s secretariat, along with all of our regulators and stakeholders of financial institutions and non-financial institutions, all they’ve done to comply under this new regime,” Bethel said.

Earlier this year, The Bahamas was removed from the EU’s list of non-co-operative jurisdictions for tax purposes after determining that the country had implemented all the necessary reforms to address concerns regarding economic substance, removal of preferential exemptions and automatic exchange of tax information.

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