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2018 Financial Transactions Reporting Regulations: What’s New?

Posted by M. Margaret Gonsalves-Sabola | Nov 21, 2018 | 0 Comments

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The Financial Transactions Reporting Act, 2018 expands on Bahamian financial due diligence and enforcement laws that were already in place. Anyone involved in the banking, financial, or business sectors in The Bahamas should read up on how the new laws will affect them.

The Act Replaces Old Law

Before this year, persons doing business in The Bahamas were subject to the Financial Transactions Reporting Act, 2000. The 2018 Act replaces the 2000 Act. It also includes new and more specific requirements for due diligence and enforcement.

The Act Increases Due Diligence Requirements

The Financial Transactions Reporting Act, 2018 puts considerably more pressure on banks and financial institutions to properly verify customers' identity and legitimacy before doing business with them. The 2000 Act did require banks to verify customers' identities, especially if there was any reason to doubt a customer's identity. However, the 2018 Act makes the due diligence requirements very specific. Now, banks must conduct due diligence when:

  • There is reason to doubt an existing customer's identity (or the legitimacy or adequacy of identity information provided by the customer);
  • The bank notices suspicious activities such as markers of money laundering;
  • Someone who is not a customer wants to carry out a transaction through the bank; or
  • A customer is carrying out a transaction for someone else through the bank.

The due diligence that the bank should conduct includes checking reliable, independent documents or information. This means that under the law, the bank should not rely on documents provided by the customer (which could be forged or outdated). If the customer is acting on someone else's behalf, then the bank needs to check the other person's identity too. The bank also should investigate the business relationship between the customer and the other person.

 The Act Makes “Tipping Off” Illegal

The 2018 Act provides for strict consequences if you “tip off” someone that a transaction has been reported as suspicious. Tipping off the customer or others that the transaction has been disclosed or reported, in a way that may prejudice an investigation into the transaction, is a criminal offense. As a result, bank employees and other business people must exercise caution when a report of a suspicious transaction has been made.

To find out more about financial transactions reporting in The Bahamas, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.

About the Author

M. Margaret Gonsalves-Sabola

M. Margaret Gonsalves-Sabola is a civil and commercial litigation attorney and an accredited civil and commercial mediator. Margaret has over 21 years' experience in legal practice in the United Kingdom, Jamaica and The Bahamas.

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