Bahamas

Sanctions

No

FATF AML Deficient List

Yes

Higher Risk

US Dept of State Money Laundering assessment 
Not on EU White list equivalent jurisdictions
International Narcotics Control Majors List
Offshore Finance Centre

Medium Risk

Compliance with FATF 40 + 9 Recommendations
Weakness in Government Legislation to combat Money Laundering
Failed States Index (Political Issues)(Average Score)

Please reload

 

ANTI-MONEY LAUNDERING

 

FATF Status

The Bahamas is on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Latest FATF Statement  -  18 October 2019

Since October 2018, when The Bahamas made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies, The Bahamas has taken steps towards improving its AML/CFT regime. These include instituting a protocol and case management system to further enhance international cooperation; initiating risk-based supervision of non-bank financial institutions; and further implementing the recent Beneficial Ownership Law to ensure the timely access to adequate, accurate, and current basic and beneficial ownership information. The Bahamas should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) demonstrating that authorities are investigating and prosecuting all types of money laundering, including complex ML cases, stand-alone money laundering, and cases involving proceeds of foreign offences, including foreign tax crimes; and (2) increasing the identification, tracing and freezing or restraining of assets and to present cases linked with foreign offences and stand-alone ML cases.

Compliance with FATF Recommendations

The last follow-up to the Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in The Bahamas was undertaken (FATF) in 2018. According to that Evaluation, The Bahamas was deemed Compliant for 13 and Largely Compliant for 17 of the FATF 40 + 9 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

​​

 

US Department of State Money Laundering assessment (INCSR)

 

Bahamas is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

Overview

 

Due to its proximity to Florida, the Bahamas remains a transit point for trafficking in illegal drugs, firearms, and persons to and from the United States.  Money may be laundered through purchase of real estate and precious metals and stones.  In addition, as an international financial center, the country is vulnerable to money laundering through financial service companies.  In 2018, the Bahamas took significant steps toward strengthening identified AML deficiencies.

 

EU Tax Blacklist

 

The Bahamas was removed from the EU Tax Blacklist on 25 May 2018

 

SANCTIONS

There are no international sanctions currently in force against this country.

 

BRIBERY & CORRUPTION

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           65

World Governance Indicator – Control of Corruption             84

 

ECONOMY

The Bahamas is one of the wealthiest Caribbean countries with an economy heavily dependent on tourism and offshore banking. Tourism together with tourism-driven construction and manufacturing accounts for approximately 60% of GDP and directly or indirectly employs half of the archipelago's labor force. Financial services constitute the second-most important sector of the Bahamian economy and, when combined with business services, account for about 35% of GDP. Manufacturing and agriculture combined contribute less than one 10th of GDP and show little growth, despite government incentives aimed at those sectors. The economy of The Bahamas shrank at an average pace of 0.8% annually between 2007 and 2011, and tourism, financial services, and construction - pillars of the national economy - remain subdued. Conditions are improving in the tourism sector, however, due to steady foreign investment led activity. New resort and marina developments are likely to provide sustained employment opportunities.

Agriculture - products:

citrus, vegetables; poultry

Industries:

tourism, banking, oil bunkering, maritime industries, transshipment, salt, rum, aragonite, pharmaceuticals

 

Exports - commodities:

crawfish, aragonite, crude salt, polystyrene products

Exports - partners:

Poland 26.3%, Cote dIvoire 20.9%, US 15.9%, Dominican Republic 14.3% (2015)

Imports - commodities:

machinery and transport equipment, manufactures, chemicals, mineral fuels; food and live animals

Imports - partners:

US 22.3%, China 14.8%, Japan 9.5%, Poland 7.7%, South Korea 7.3%, Colombia 6.8%, Brazil 5.6%, Singapore 5.5% (2015)

The Bahamas maintains a stable environment for investment and demonstrates a long tradition of parliamentary democracy, respect for the rule of law and a well-developed legal system, and security of life and personal property. U.S. companies find that The Bahamas' proximity to the United States, common English language, and the exposure to U.S. media and culture contribute to Bahamian consumers having general familiarity and positive attitudes towards U.S. goods and services. The Bahamas conducts approximately 85% of its international trade with the United States.

The Bahamian economy remains heavily dependent on tourism and financial services, although the government has made efforts to encourage diversification, particularly in agriculture and light manufacturing. The Bahamas relies primarily on imports from the United States to satisfy its food needs for local and tourist consumption. More than six million tourists visit the country annually.

In the financial services sector, The Bahamas is experiencing growth in investment funds and has seen significant increases in investments from Brazil in particular. According to the Bahamas Securities Commission, the increase is due to the development and approval of SMART Funds -- risk-adjusted, low-cost investment structures.

The Bahamas Investment Authority actively promotes The Bahamas' liberal tax environment and freedom from many types of taxes, including capital gains, inheritance, and corporate or personal income taxes. The Bahamas continues to attract significant foreign direct investment (FDI) from various parts of the world. These investments are primarily in the tourism sector and range from multi-billion dollar resort developments to millon dollar homes on the major islands of the archipelago.

The major challenges to investment in the country include the relatively high cost and uncertain reliability of electricity, high unemployment combined with a limited pool of skilled labor, cumbersome and sometimes opaque administrative requirements, and an escalating crime rate. In addition, certain sectors of the economy are reserved under the National Investment Policy for Bahamian only investment.

U.S. and Bahamian companies alike report that the resolution of business disputes often takes years, and collection of amounts due can be difficult even after court judgments. Companies also report that the approval process for foreign direct investments and work permits can be cumbersome and time-consuming. The government of the Commonwealth of The Bahamas (GCOB or the Government) asserts that the majority of foreign investment applications are processed quickly and without significant issues. Applications that are subject to more extensive review, or those that do not fall within the National Investment Policy, may take longer to approve given the Government’s desire to balance local versus foreign investment interests. Some U.S. and Bahamian companies also complain that the tender process for public contracts is not consistent and that it is difficult to obtain information on the status of bids. GCOB officials have told the Embassy that the Government is preparing legislation to address concerns related to its investment policy and Public Procurement Regime.

On January 1, 2015, the Government introduced a 7.5% Value Added Tax (VAT) on most goods and services, a measure designed to strengthen the fiscal balance sheet. Implementation of the tax and other fiscal measures including efforts to enhance revenue administration has yielded positive results and the Government has reduced its deficit from $539M three years ago to $141M in this fiscal year (2016). The Government continues its efforts to develop a central revenue agency and modernize its fiscal administration.

In March 2016, Moody’s Investor Service confirmed The Bahamas’ issuer and senior unsecured ratings at Baa2 with a stable outlook. (https://www.moodys.com) In its January 2016 report, Standard and Poor’s (S&P) (http://standardandpoors.com) affirmed the country as investment grade and maintained the sovereign credit rating at BBB-/A-3. (http://standardandpoors.com) In its April 15, 2016 update on The Bahamas, S&P continued its negative outlook but maintained the country’s investment grade credit rating.

With over a billion USD in new resort development committed and the potential for over 5,000 permanent jobs, the Bahamian government continues to assert that benefits from foreign investment-led activities are imminent. The Bahamas Central Bank, in its January-June 2015 Financial Stability report estimated the 2015 GDP growth rate at 1.2%.

The Bahamas remains the only country in the Western Hemisphere that is not a member of the World Trade Organization (WTO). The government has committed to accelerating its efforts to become a member and has taken steps to remove barriers to international trade and facilitate foreign trade and investment. In 2015, the Government enacted new and amended existing laws to provide enhanced protection of intellectual property rights. The new laws are comprehensive but have not been implemented and still require the approval of supporting regulations. While these are vital to economic growth, the government likely will face internal and external challenges to successfully implementing its plans to become more fully integrated into the the global trading system.

 

 

Country Links
Central Bank of The Bahamas
Bahamas Financial Services Board
Financial Intelligence Unit Bahamas (FIU-Bahamas)
Company Search - Bahamas Government
Other Useful Links
FATF
US State Department
Transparency International
World Bank
CIA World Factbook

KnowYourCountry Limited has achieved ISO 9001:2015 Certification for the provision of on-line information of money laundering and sanction information on a country by country basis

© 2019 - KnowYourCountry Limited