Continued monitoring unfortunate

R. A. Hettinga rah at
Tue Aug 10 14:25:53 PDT 2004


The Nassau Guardian Online Guide

Contact Us  Tuesday, August 10, 2004

Continued monitoring unfortunate

Sears argues against decision by the FATF to continue monitoring The Bahamas

By MARTELLA MATTHEWS,Guardian Business Reportermartella at

The snub The Bahamas' financial services industry received from the
Financial Action Task Force (FATF) in the form of continued formal
monitoring, highlights the urgent need for a more level playing field and
the convening of a global forum on money laundering, Attorney General
Alfred Sears said.

 After close to a month of silence following the release of this decision
by the FATF outlined in the Annual Review of Non-Cooperative Countries and
Territories (NCCT) in early July, Mr Sears, who recently ended his term as
chairman of the regional arm of the organization, the Caribbean Financial
Action Task Force (CFATF) told The Guardian that this development
emphasised the need for "a level playing field and uniform application of
the law."

 The Attorney General continued that if these two realities existed,
countries like The Bahamas that have made enormous progress in the areas of
money laundering and anti terrorism financing regimes would be recognised.

 "That is why we have been calling for a global forum on money laundering
where all countries of the United Nations would have a right to sit down
and help to make the rules and ensure that they are applied across the
board in a uniform fashion," he said.

 Noting some of the changes made by the Bahamas immediately after being
blacklisted by the FATF in 2000 as a NCCT, Mr Sears said that included in
the bundle of financial legislation passed just a year later were the
abolishment of practices still in force in some FAFT member countries. "We
for example have abolished bearer shares," he said.

 "They still have bearer shares in the United States and other
jurisdictions and FATF member countries." Regulation of gatekeepers like
lawyers and accountants was another change made by The Bahamas that is
still ongoing in other FATF member countries.

 In its annual review, the FATF stated that although it had ended the
formal monitoring of other CFATF member countries blacklisted with The
Bahamas in 2000 or immediately afterwards, concerns regarding adequacy in
the areas of international cooperation required that the jurisdiction
undergo continued monitoring.

 In the report, three CFATF member countries were granted an end to their
formal monitoring process. Dominica was granted an end to its formal
monitoring in October 2003, while the end of monitoring for Grenada and St.
Vincent and the Grenadines was formally announced in the annual review.

 Responding to the slight, Attorney General Sears described the reason
given by the international body for continued monitoring as unfortunate
adding that The Bahamas had made enormous progress in the area of
international judicial cooperation.

 "That has been acknowledged by the Americas group of the FATF, it's been
acknowledged by the United States, it's been acknowledged by Canada and
it's also been acknowledged by the United Kingdom and I have the written
indications of such," he declared.

 He admitted however that there were aspects of international cooperation
that still needed work. "We still have an outstanding issue in terms of
regulators to regulate the cooperation and that relates to the Central Bank
and the Securities Commission." Giving a present day example of the issues
that were being addressed, Mr Sears said that in instances where
information was given to the United States Securities Exchange, this body
wanted to be able to share this information with the Justice Department.

 This presented a problem, as under Bahamian law, similar entities in The
Bahamas cannot share information with their counter parts in an
unrestricted manner. "The law requires that if the regulator receiving the
information wishes to pass it on to another entity they get the approval of
the Bahamian regulator," he said.

 The former CFATF chair told The Guardian that this particular problem was
currently being worked out between the Bahamian government and the U.S.
regulators. "I headed a delegation comprising of the Governor of the
Central Bank, the Minister of Social Services, the Minister of Investments
Allyson (Maynard) Gibson, Hillary Deveaux from the Securities Commission,
(and) Michelle Martinborough," Mr Sears said.

 "We have had a very good negotiation with the (U.S.) Securities Commission
and Exchange and we're working out a protocol now. Its my expectation that
that issue will be satisfactorily resolved in short order."

 Expressing his disappointment at the move by the FATF, which others in the
financial services community describe as a deliberate assault on the
country's financial services sector, Mr Sears said: "What I would wish is
that when we make progress that it is reflected in the statements out of
the FATF... The Bahamas has certainly done more than most; we have gone in
some instances further than most. I think we ought to be recognised and it
ought to be acknowledged the enormous progress that we have made."

R. A. Hettinga <mailto: rah at>
The Internet Bearer Underwriting Corporation <>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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