Speaking exclusively to The Nassau Guardian, Stephen Thompson, an inspector at the Compliance Commission, said this warning comes under the department’s revised codes of practice.
“The Compliance Commission has actually revised its codes for constituents who fall under the Compliance Commission (CC),” Mr Thompson said. “The codes of practice are actually practical guidance for the industry. So it’s really to offer a practical guideline to financial institutes so that they would understand what their obligations are under the law.
“In addition to the codes would be some practical guidelines to ‘Know Your Employee’ or what we call KYE,” he continued. “No other regulatory body has actually approached the KYE aspect.”
According to Mr Thompson, in the field of anti-money laundering employees at financial institutions are often overlooked.
“What we’ve realised with financial services locally and worldwide, is that quite a bit of criminal elements exist,” the financial expert explained. “However, so many institutions have been of the view that the criminal element is outside of the institution. So they put up the proper safeguard to keep those persons from doing business with them.
“What they have not recognised and been cognisant of, is that a lot of times, persons on the outside use the assistance of persons on the inside to actually facilitate some of their illegal transactions,” he added.
For this reason, Mr Thompson insisted that employees are not monitored as closely as they should be.
“The Compliance Commission is of the view that most institutions in employing people to work with them, assume that these persons are legitimate people who are actually going to join their business for the sole purpose of enhancing their revenue base and helping them to meet their objectives,” said Mr Thompson. “Unfortunately, history has shown worldwide that that has not always been the case. Unfortunately, some criminal elements have actually crawled into financial institutions.”
Still, he admitted that ‘inside jobs’ have occurred in The Bahamas.
“Obviously when you look at some newspaper articles, certainly you would see that from court cases, it becomes known to the public that some inside people actually assisted criminals on the outside,” he pointed out. “But we are taking a proactive approach. We don’t know to what extent it has happened here but we feel that it is important enough for us to actually put our financial institutions on alert. So it was actually something that we tell them they should look for.”
CC is an independent statutory authority responsible for enforcing compliance with the anti-money laundering rules and regulations that are codified in financial legislation. The government entity also monitors real estate brokers and developers, credit unions, financial and corporate service providers, and managers of third party funds.
By: JASMIN BONIMY, The Nassau Guardian
