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The Bahamas

As the country with the second-highest GDP in the Caribbean and home to over 200 banks and trust companies, The Bahamas strives to lead when it comes to anti-money laundering and compliance. As a jurisdiction it subscribes to robust supervision and regulation through the implementation of standards promulgated by international agencies such as the:
  1. Basel Committee on Banking Supervision (BCBS)
  2. International Organization of Securities Commissions (IOSCO)
  3. International Association of Insurance Supervision (IAIS)
  4. Financial Action Task Force (FATF)
Effective trust and financial services legislation continues to be at the forefront in The Bahamas’ parliament. In order, we have the:
  1. The Arbitration (Amendment) Act 2023
  2. The International Commercial Arbitration Act 2023.
  3. Fraudulent Dispositions Act (1991)
  4. Trustee Act (1998)
  5. Banks & Trust Companies Regulation Act (2000)
  6. Purpose Trust Act (2004)
  7. Banks & Trust Companies (Private Trust Companies) Regulations (2007)
  8. Commercial Entities (Substance Requirements) Act 2018
  9. Investment Funds Act (2019)
  10. Banks & Trust Companies Act (2000, 2020)
  11. Financial and Corporate Service Providers Act (2000, 2020)
  12. Digital Assets and Registered Exchanges Act (2020, 2023; DARE Act).
In addition, The Bahamas has successfully implemented the US Foreign Accounts Tax Compliance Act (FATCA) via the execution of an Intergovernmental Agreement, enactment of empowering local legislation and installation of the requisite systems to automatically share information to facilitate tax compliance. A similar approach was adopted in ensuring that The Bahamas complied with the Common Reporting Standard (CRS) – the global standard for the automatic exchange of financial account information – hereby demonstrating its commitment to the fight against tax evasion and cooperation on tax matters. The aforementioned frameworks exist in addition to Mutual Legal Assistance Treaties (MLATs) that enable The Bahamas to work with other countries to maintain the integrity of their legal systems and combat illicit activities. While this article cannot go into the details of each act, we can clearly say that there is an enhanced and thoughtful framework for compliant financial services, prioritising a global outlook, inclusive of entrepreneurs seeking to responsibly expand into traditional and alternative opportunities. The Commercial Entities Act establishes the requirements for relevant entities engaging in income-generation activities within The Bahamas. The Investment Funds Act improves the regulatory framework for Bahamian investment funds, notably enabling the appointment of international funds administrators. The Banks & Trust Companies Act (2020) comprehensively modernises the previous Act of the same name while providing The Central Bank of The Bahamas with enhanced and effective powers. The Financial and Corporate Service Providers Act performs the same essential update, while the DARE Act leapfrogged The Bahamas as a world-leading destination for digital asset entrepreneurship. The 2023 Bill specifically highlights minimum requirements for ensuring investor safety in the daily operations of a digital asset exchange, whether for trading or staking. Such standards do not read as novel, since they were mentioned in the 2020 version, but seek to clarify beyond any doubt the requirements expected by the government of The Bahamas. At the heart of all this legislation remains just that: Investor protection, investor growth, sustainability. The Bahamas ensures compliance with international standards, whether with economic substance, exchange of tax-related information, or managing an asset class wholly new to the age-old realm of financial services. Therefore, this island nation also upholds the highest expectations when fighting against money laundering, terrorist financing, and other known risks seeking to combat financial crime. The Bahamas was only the second jurisdiction in the region to be largely compliant with all forty of the Financial Action Task Force’s (FATF) recommendations.