EU, FATF lists causing correspondent banking problems in Bahamas
02 Dec 2020

The Bahamas’ inclusion on the European Union’s (EU) black list and Financial Action Task Force’s (FATF) gray list, has caused some local financial institutions to be refused service by correspondent banks, Attorney General Senator Carl Bethel said on Friday, adding that those lists have left The Bahamas at a competitive disadvantage as an international financial center.

Bethel, who made the remarks while opening Senate debate on Penal Code (Amendment) Bill, 2020 explained that while the problems with correspondent banking relationships could have been worse due to the FATF and EU lists, there is still the worry of reputational damage to this jurisdiction.

“The blacklisting has caused some problems for our financial institutions and banks, in terms of the ability to service their clients,” Bethel said.

“Not in many cases, but in some cases there have been refusals of service by international correspondents and there have been refusal in some instances of transmission of funds as requested. Not many, but it has manifested itself.

“It could have been a lot worse. But there have been one or two instances here and there where financial institutions have had difficulties with their correspondent bankers.”

Bethel said there are cost implications to these kinds of problems with correspondent banks that place the country’s financial sector at a competitive disadvantage.

“Any transaction coming to The Bahamas or flowing from The Bahamas is subject to what they call enhanced due diligence measures, which adds to the cost of doing transactions and we know that the financial sector is very cost sensitive. And so it puts us in a competitive disadvantage position,” said Bethel.

By Chester Robards, The Nassau Guardian, 30 November

Read more at The Nassau Guardian

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