In the wake of a damning report from the U.S. State Department on the country's anti-money laundering and counter terrorism financing (AML/CTF) regime - specifically as relating to joint counter narcotics efforts - Minister of State for Finance Michael Halkitis yesterday said he was largely satisfied with that regime and in response called on the U.S. to live up to its obligation to stem the flow of weapons from North America into The Bahamas while this country continues to work to protect the financial services sector from abuse.
Halkitis did not deny the assertions contained in the report. In that report, the 2015 International Counter Narcotics Strategy Report presented to the U.S. Congress, the U.S. State Department asserted that drug traffickers took advantage of The Bahamas' financial sector, stating that ensuring the reputation of the jurisdiction was "paramount" in developing the country's financial services sector.
Halkitis told NB12 that while the government was currently in the process of bolstering the resources of the Financial Intelligence unit (FIU) to crack down on money laundering within the country, adding that he was largely satisfied with The Bahamas' current AML/CTF regulatory regime.
"We feel that we have a very robust regulatory regime so the fact that we do not have any convictions we think it's a reflection of the robustness of that regime. Of course we will continue to revise our laws to ensure that we maintain our reputation as a sound financial jurisdiction. We are in the process right now of making available to them more resources in terms of human resources and IT, because they have expressed to us that they are beginning to see a backlog of requests and we are resourcing them so that they can attack that, bring it down. We're committed to doing it because we recognize that the reputation of our jurisdiction is paramount if we want to grow our financial services industry," he said.
The State Department on Wednesday released its 2015 International Narcotics Control Strategy Report (INCSR), which held that various criminal organizations were taking advantage of international business companies (IBC) and offshore banks registered in The Bahamas for money laundering purposes despite The Bahamas' strict know-your-customer (KYC) and transaction reporting requirements. Chief among the report's recommendations was the need for the FIU and royal Bahamas Police Force to "continue its outreach, training and coordination with banking and non-banking sectors to assist institutions in implementing and maintaining effective suspicious transaction report (STR) regimes."
In addition to local efforts, Halkitis asked the government's U.S. partners to keep their obligation to stem the flow of weapons from North America into The Bahamas following a report year in 2014 for marijuana seizure and eradication by the Royal Bahamas Defence Force and the U.S. Coast Guard.
"In the narcotics report I did not see much discussion about the traffic of guns from the United States into The Bahamas and perhaps next year in the report we can have a discussion on that in terms of what the U.S. is doing to help us to stem some of the shipment of guns. We know that the geographic location of The Bahamas puts it right along the route of the countries that produce and the markets where there is demand for the drugs, so naturally we'll have problems with transshipment. We are expending significant resources. We are spending close to $250 million to resource the defense force and we are spending millions of dollars every year to train our police force. We're working hard on those fronts, but as we know the drugs go in one direction and the guns come in this direction," said Halkitis.
Halkitis commended the Swift Justice initiative, which he said had seen the time from arraignment to trial go from 900 days before 2012 to 230 days in 2014, adding that the heightened amount of marijuana seizures last year was an indication of the effectiveness of enforcement.
Click here to read more at The Nassau Guardian
