Bahamas Country Summary

FATF Status

The Bahamas is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in the Bahamas was undertaken in December 2022. According to that Evaluation, the Bahamas was deemed Compliant for 20 and Largely Compliant for 20 of the FATF 40 Recommendations. It remains Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

The Bahamas faces significant challenges related to crime and corruption, with reports of inconsistent enforcement of anti-corruption laws and allegations of misappropriation of funds by public officials. Despite the government's efforts to combat these issues, including the implementation of new procurement legislation, corruption remains a pervasive problem, particularly in the context of government contracts and political favoritism.

In terms of criminal activities, the Bahamas serves as a trans-shipment point for drug trafficking and is also grappling with human trafficking and environmental crimes, such as illegal wildlife trafficking. While the government maintains a stable political environment and collaborates internationally on crime-related issues, the judicial system struggles with high recidivism rates and overcrowding, highlighting the need for improved resilience and support mechanisms for victims of crime.

The Bahamas, a developed nation with a high per capita GDP, has a stable investment climate characterized by political stability, a democratic tradition, and a well-developed legal system. The economy heavily relies on tourism, which accounts for over 70% of GDP and employs a significant portion of the workforce; however, recent crises, including Hurricane Dorian and the COVID-19 pandemic, have exposed the country's vulnerability due to its lack of economic diversification. The government is actively pursuing strategies to diversify the economy by targeting investments in sectors such as light manufacturing, technology, and renewable energy, while also seeking to attract foreign direct investment and improve the business environment through initiatives like the establishment of Bahamas Invest to streamline the investment approvals process.