Imbalance of Pressure From International Regulatory Framework, Number One External Concern

(released on 2018.11.02)

NASSAU, Bahamas — Deputy Prime Minister and Minister of Finance the Hon. K. Peter Turnquest said the number one external concern faced by the financial services sector in virtually all of the jurisdictions in the Caribbean appears to be the imbalance of pressure and scrutiny from the international regulatory framework.

“Regardless of the progress made, no matter the commitment, the goal posts seem to keep moving,” DPM Turnquest explained at the Caribbean Association of Banks Inc. 45th Annual General Meeting and Conference held on Wednesday, October 31, 2018.

He added, “Countries in the region continue to be discredited due to negative perceptions that do not accurately reflect the current strength of their local regulatory regimes.”

The DPM said the consequences that black and grey lists have on access to correspondent banking at the micro level, and economic stability at the macro level needs to be quantified and rationalized.

He explained that earlier in October, he called on the International Monetary Fund to take a more active role in developing objective data on (Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) reforms in Caribbean jurisdictions in two specific areas:

  • Independently quantifying the economic and fiscal costs posed by international financial services regimes in the region particularly to the European Union and countries in the OECD;
  • Quantifying how the returns to the Organisation for Economic Co-operation and Development (OECD) and EU from their emphasis on jurisdictions in the Caribbean line up with the costs they continue to impose on Caribbean nations relative to the tax base and financial crimes base which they seek to impact.

The DPM said, “We must increase our collective efforts to challenge the system that disproportionately costs the region, undermining our efforts to attract foreign investments, to promote economic diversity and resilience and development for our people.”

He explained that the latest knock to the region came from the inclusion of The Bahamas and Trinidad and Tobago on a UK watch list for money laundering.

The DPM said, “This was a direct consequence of the Financial Action Task Force (FATF) list of jurisdictions that it deemed as having strategically deficient anti-money laundering measures.”

He said governments in the region are not blind to the needs for enhanced enforcement when it comes to AML/CFT, and all of the countries standards of enforcement must reinforce the no-tolerance stance of their governments and the quality of their domestic regulatory regimes.

DPM Turnquest said, “While there is clearly room for improvement, we cannot let the perception stand that our financial regulatory agencies and the financial intelligence units somehow lack competence or quality; that they are failing to produce any results.

“Speaking for The Bahamas, we have had quantifiable progress since 2015.”

He said, “Between 2016 and 2017 there was a 46 per cent increase in the number of suspicious transactions received and a 69 per cent increase in the number of cases sent to the Royal Bahamas Police Force; we opened 115 more cases in 2017 than we did in 2016. That is a 131 per cent increase in the number of cases that were under active analysis.

DPM Turnquest noted that finally, between 2015 and 2017, suspicious transactions that were analysed and reported closed by the country’s financial intelligence unit represented between 35 per cent and 60 per cent of all cases received.

“In one complex case, involving $3 Million Euros worth of laundered money, the Government of Argentina publicly commended The Bahamas for the effectiveness of its international cooperation. News reports stated: ‘The case demonstrates an excellent example of international legal cooperation between the Republic of Argentina and The Commonwealth of The Bahamas as well as their commitment to effectively tackle transnational money laundering and corruption, in line with international conventions and standards.“


Gov. of Bahamas


Leave a Reply