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 ongoing issues in the enforcement of anti-corruption laws and public trust in government officials. Recent scandals involving law enforcement and political figures highlight the need for stronger accountability measures, although the establishment of an Independent Commission of Investigations represents a potential step forward in governance and oversight.

In terms of criminal activity, the Bahamas serves as a trans-shipment point for drug trafficking, particularly cocaine, and is also grappling with human trafficking and financial crimes, exacerbated by its status as a tax haven. While the government maintains a stable political environment and collaborates internationally on crime prevention, the effectiveness of its judicial system and victim support mechanisms remains a concern, indicating a need for comprehensive reforms to enhance resilience against crime.

The economy of The Bahamas is heavily reliant on tourism and financial services, which together contribute approximately 85 percent to its GDP, while the country maintains a significant trade surplus with the United States. The Bahamian government actively promotes foreign direct investment (FDI) through various policies and incentives, including customs duty exemptions and tax concessions, although challenges such as bureaucratic delays and a lack of transparency in investment procedures persist. Emerging sectors such as renewable energy, niche tourism, and digital technology are being prioritized for growth, reflecting the government's commitment to diversifying the economy and improving the investment climate despite ongoing governance concerns and the need for further reforms.