The passage of the Bahamas Cooperative Credit Unions Bill has allowed the jurisdiction to fully comply with certain recommendations of the Caribbean Financial Action Task Force (CFATF), particularly with respect to protecting the industry from exposure to money laundering and terrorism financing activities, according to Attorney General Allyson Maynard-Gibson.

The bill has now passed in both the House and the Senate, and Maynard-Gibson cited two specific recommendations the bill addresses. One deals with a requirement that the functions of the director of societies should include the responsibility for ensuring that licensees and registrants comply with the Financial Transactions Reporting Act (FTRA). It was felt this would facilitate enforcement action for non-compliance with AML/CFT requirements.

The other dealt with a deficiency pertaining to the introduction of ladders of supervisory intervention with regard to the director of societies. The CFATF said that passage of the bill - the pertinent provision being the requirement that the Central Bank inspector carry out inspections of credit unions for the purpose of satisfying himself that credit unions are complying with the requirements of the FRTA - would ensure compliance with task force recommendations.

Also, given the prevailing global and regional interest in protection of personal data, it is noteworthy that, according to Maynard-Gibson, confidentiality provisions of the new co-operative society legislation may be pierced for a limited number of reasons. Maynard-Gibson highlighted the privacy aspects of the bill.

Clause 120 requires that the information on the identity, transactions or the accounts of members are to be kept confidential - except in certain circumstances, including where the credit union is lawfully required to make a disclosure by any court of competent jurisdiction within The Bahamas or under the provisions of any law of The Bahamas.

Confidentiality may also be breached to assist the Central Bank governor in the exercise of any functions conferred upon her by written law; to a person with a view for the purposes of initiation of a criminal proceedings, disciplinary proceedings relating to the exercise of a counsel, attorney, auditor or actuary in the course of his or her professional duties, and disciplinary proceedings relating to a discharge of a public officer or employee of the Central Bank of his or her duties.

Maynard-Gibson outlined how the new bill fits in with a raft of legislation including the Cooperatives Societies (Amendment) Bill 2014, which makes it clear that it is intended that the Bahamas Cooperative Credit Unions Bill 2014 should apply only to financial cooperatives. She noted that Clause 3 allows for the director of societies to have continued responsibility for the initiation and encouragement of organized activities for the cooperatives.

"This amendment seeks to foster the continued growth of the credit unions sector and to ensure that start up credit unions will receive appropriate advisory support in their initial stages. When they are ready to operate, these credit unions will be registered with the Central Bank," the attorney general explained.

She also explained that the Financial Transactions Reporting Act is to be amended by the Financial Transactions Reporting Act (Amendment) (No 3 Bill).

"This amendment is critical in that it provides that cooperative credit unions now fall within the ambit and meaning of 'financial institution' and are therefore subject to the provisions and obligations as mandated by the FTRA (Financial Transactions Reporting Act). This is in keeping with the recommendations of the CFATF (Caribbean Financial Action Task Force)," Maynard-Gibson said.

"Additionally, the Central Bank of the Bahamas (Amendment ) Bill 2014 is also necessary since it seeks to authorize the Central Bank to supervise and regulate cooperative credit unions and for connected purposes. Specifically there is a new definition of 'financial institution', which includes any person carrying on a business regulated under the laws enforced by the bank," she said.

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