Shadow Minister of Finance and FNM Deputy Leader Peter Turnquest has alleged that a forensic review of the Bank of The Bahamas has been completed, and the results not made public. He called for the publication of those findings while renewing his concerns in the House of Assembly about the vulnerabilities the regularizing of the webshop gambling industry presented to the banking system.

The Christie Administration passed a Gaming Act and Regulations early in 2015, after breaking an unsolicited promise to abide by a gaming referendum which saw the regularization of the industry defeated. That began the process of legalization of the industry, a process presently in the evaluation of license applications stage.

One apparently unforeseen obstacle was the stance of the international banks against accepting the proceeds of online gaming. This presented a problem for the industry in terms of what to do with the millions in cash the operators needed to bank. The government as majority shareholder in Bank of The Bahamas (65 percent) decided that the bank would accept the money, and by so doing sparked concerns that Bank of The Bahamas might be restricted in its ability to do business with other banks due to fears of contaminating the income stream.

Bank of The Bahamas
Turnquest raised the issue during his contribution to House of Assembly debate on the Anti-Terrorism (Amendment) Bill.

"Recent legislation passed in this House by that side, continues to be a source of concern for locals and the international banking community, which if not resolved definitively by way of creative strategy and action, can cause unanticipated consequences. Something must be done about this situation and it cannot be allowed to just drag on. I am sure these issues will arise during our upcoming peer review," he said.

He said the question is whether there are repercussions, and have they been effectively mitigated, recalling that Attorney General Allyson Maynard-Gibson had made a trip to Paris to meet with the FATF (Financial Action Task Force), and the promise of an announced position based upon advice from that body.

"But unless I missed it, no information regarding that visit has been released nor has any policy changes been announced. It would be helpful that as we consider this amendment, the results of that consultation are made public so that we will know that no further amendments will be necessary to cover this particular activity.

"Let me also take this opportunity to inquire also about the status of the forensic review of BOB. I am led to understand that this report has been completed and the results are available but have not been released. Since this bank is owned by the people of The Bahamas, I believe it is only proper that they are made aware of those findings.

"I would hate to think that we will be in for another surprise if it becomes necessary to further transfer of toxic loans to Bahamas Resolve without some knowledge of what has happened and the plan for a permanent fix. This is important and relevant as it too speaks to the potential weaknesses in that institution that could give rise to unexpected breaches," Turnquest said.

The goings on at the Bank of The Bahamas have been cause for speculation on a number of occasions, with questions raised in some quarters about the efficacy of the management of former managing director Paul McWeeney, the decisions made - and approved - that led to the toxic loan portfolio being such a problem in the first instance.
There has been no public comment about the bank from the government except to say that the government would not let the bank fail.

Anti-terrorism amendment
Turnquest noted that the amendment under debate is the second amendment to the principal act - the first being only last year - but he agreed the amendment was nonetheless "quite necessary in order not only to fully comply with the United Nations Convention Respecting and Suppression of the Financing of Terrorism, but as importantly to our own management of the potential for the abuse of our jurisdiction to facilitate terrorist financing actions.

"While it is unquestionable that our financial services laws and compliance regime are among the most robust and rigid as anywhere in the world, there are always areas of exception that warrant special consideration. I take this legislation as such a case, to provide strict protocols and efficient mechanisms for authorities to respond to substantiated reports of illegal use of our jurisdiction and financial services industry for covert means.

"In this regard the amendment to clarify and simplify the requirements for the Attorney General to make an application for an entity to be designated as a terrorist organization and to freeze its assets is valuable and brings us into conformity with our United Nations obligations," he said.

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