Significant sums of money that are the proceeds of crime are being laundered through Bahamian financial institutions, according to the United States Department of State which has branded The Bahamas a major money laundering country.
But in its 2005 International Narcotics Control Strategy Report, the departmentﾴs Bureau for International Narcotics and Law Enforcement Affairs did not release specific figures.
That report, released annually, classified The Bahamas and 54 other countries, ﾓJurisdictions of Primary Concernﾒ as it relates to money laundering, a global vice.
It means that there are concerns that financial institutions here engage in currency transactions involving significant sums amounts of proceeds from international narcotics trafficking. That same report had revealed that 20 metric tonnes of cocaine that ended up in the United States in 2004 was trafficked through the Jamaica-Cuba-Bahamas vector.
The bureau was quick to point out that, unlike the Financial Action Task Force, the international anti-money laundering watchdog, its analysis is based on the amount of proceeds laundered and not on the anti-money laundering measures taken.
ﾓThe Government of the Commonwealth of The Bahamas has enacted substantial reforms that could reduce its financial sectorﾴs vulnerability to money laundering; however, it must steadfastly and effectively implement those reforms,ﾒ the report noted.
ﾓThe Bahamas should provide adequate resources to its law enforcement and prosecutorial/judicial personnel to ensure that investigations and prosecutions are satisfactorily completed and requests for international cooperation are efficiently processed,ﾒ it added.
Over the last five years especially, Bahamian legislators and government officials have made concerted efforts to upgrade the financial services regime to ensure that there were appropriate safeguards in place against money laundering.
The FATFﾴs branding of The Bahamas as a non-cooperative jurisdiction in the fight against money laundering provided the impetus in that regard. It led to the package of laws being enacted that eventually led to the FATF dropping the unwanted classification.
According to officials of the Royal Bahamas Police Force, money laundering methods range from the purchase of real estate, large vehicles and jewellery to the processing money through a complex national or international web of legitimate business and shell companies.
However, it was pointed out, in the case of drug trafficking crimes the illicit proceeds usually take the form of cash or are quickly converted to cash.
ﾓAmendments to and implementation of anti-money laundering laws since 2000 have hindered launderersﾴ ability to deposit large sums of cash,ﾒ the State Department report disclosed. ﾓAs a result, a new trend has developed of storing extremely large quantities of cash in security vaults at properties deemed to be save houses.ﾒ
Superintendent Raymond Gibson in charge of the Drug Enforcement Unit had said in his annual report on 2004 trends that the financial system in The Bahamas continued to be used by unscrupulous persons worldwide who seek to launder their criminal proceeds.
ﾓFinancial investigations during 2004 revealed that money laundered into The Bahamas financial institutions from international jurisdictions were derived from various sources of crime such as fraud, extortion, other financial crimes as opposed to that of trafficking which continues to be the largest money earner worldwide in crime,ﾒ he said.
The document, which included a comprehensive report on changes made over the last few years, also acknowledged the strides that have been made.
During 2001, the Governor of the Central Bank revoked the licenses of 55 banks that were deemed unfit to transact business in The Bahamas. They included the British Bank of Latin America and the Federal Bank, both identified in a U.S. Senate report as being at high risk of involvement in money laundering and Al-Taqwa Bank, which in October 2001 was placed on the list of Specially Designated Global Terrorists.
The number of banks and trusts declined from 301 in 2003 to 270 in September 2004. Then there have been the efforts of the Financial Intelligence Unit [FIU], the nerve centre for the handling of suspicious transaction reports and requests for international cooperation.
During 2004, the FIU received over 100 suspicious transaction reports of which approximately 14 were passed on to the police.
What state department officials have conceded is that the current ability of money launderers to penetrate virtually any financial system makes every jurisdiction a potential money laundering centre. There is no precise measure of vulnerability for any financial system.
Tameka Lundy, The Bahama Journal
MArch 9, 2005
