Achieving Technical Effectiveness at FATF Standards

By Cassandra Nottage

Within 10 months after the publication of its CFATF MER in July 2017, The Bahamas had readied itself for re-rating of technical compliance with the FATF Recommendations, through remediation of the most pressing issues and deficiencies identified by the CFATF. Based on the incredible amount of work completed by the members of the Identified Risk Framework Steering Committee, The Bahamas applied to CFATF for a re-rating of its technical compliance with 21 FATF Recommendations in May 2018. The Bahamas, at the CFATF November 2018 Plenary and meetings, was successful in obtaining 13 upgraded ratings of ‘Compliant or Largely Compliant’ in 12 FATF Recommendations and a ‘Partially Compliant’ for the 1 ‘Non-Compliant’ Recommendation of the 2017 Mutual Evaluation. The country became the first CFATF Member country to achieve such a feat in such a short period of time with The Bahamas achieving an overall position of Compliant and Largely Compliant ratings in 30 of the 40 FATF Recommendations and 10 Partially Compliant ratings – placing the country firmly on par with the top FATF member states (i.e., USA, Switzerland, Ireland, etc.).

Not willing to rest on our laurels, during 2019 and into 2020, at the height of the COVID19 pandemic, the government with the regulatory and law enforcement agencies continued to work on dual tracks addressing the FATF agreed Action Plan for the removal of the country from the FATF Grey List and the technical gaps regarding the remaining 10 FATF Recommendations. In February 2020, following the country’s submission of its fourth progress report with supporting documentation in December 2019 to the FATF ICRG for desktop review, the FATF deemed that The Bahamas had made sustainable progress towards addressing the ‘Action Plan’ items and approved an onsite visit review to the country to verify the actions taken. The agreed date for the onsite review was the week of the 28th of April 2020. The visit, however, was rescheduled for November 2020 due to COVID19 restrictions. The onsite review was successful with over 100 persons being involved in the discussions or preparation of same.

The Bahamas, while preparing to receive the FATF onsite team, was working on its re-rating application to CFATF. Accordingly, in May 2020 the country was able to make such an application for the re-rating of the FATF 10 Recommendations. In November 2020 at the CFATF Plenary, the country was successful in obtaining re-ratings of compliant and largely compliant scores in 9 of the 10 Recommendations. However, due to FATF revisions to Recommendation 15 (the addition of requirements for Virtual Assets), the country was downgraded in its compliance from largely compliant to partially compliant for this recommendation. Overall, The Bahamas achieved the second-best record of 38 compliant and largely compliant scores amongst the CFATF membership. Partially compliant ratings were recorded for Recommendations 8 (NPOs) and 15 (New Technologies inclusive of VASPs).

To end the year off with a bang, in December 2020, the FATF delisted the country from its Grey List. The added freed resources released from focus on the FATF Greylisting, allowed for the government to concentrate on a more aggressive push for the delisting from the EU AML Blacklist which the country had been placed on in October 2020. The Bahamas had been considered for this Blacklisting due to its placement on the FATF Grey-list. While the IRF Steering Committee members worked tirelessly on completing the remediation of the last remaining technical deficiencies for FATF Recommendations 8 & 15, the Office of the Attorney General’s team (Attorney General, National Identified Risk Framework Coordinator and the International Cooperation Legal Unit) focused on engagement with the EU with countless zoom meetings and discussions with EU membership and EU DG FISMA (EU committee responsible for evaluating the AML/CFT/CFP regimes) on Bahamas’ evaluation report and international cooperation. The intense engagement with EU partners and DG FISMA led to the country being delisted on the 7 January 2022 from the EU AML Blacklist. Significant manpower and resources were expended to address the CFATF, FATF and EU identified deficiencies in our AML/ CFT/CFP regime.

Our remaining focus for the 2021 /2022 years has been to complete the work required to apply for the re-rating of the FATF Recommendation 8 and 15 and the National AML/ CFT/CFP Risk Assessment. We have applied in May 2022 to CFATF for the re-rating of the two Recommendations and is about 90% completed with the National Risk Assessment with an expected completion date of November 2022. We are now awaiting the outcome of the CFATF re-rating application, and we are hopeful we will obtain re-rating scores of Compliant or Largely Compliant for the FATF Recommendations 8 and 15. Should we be awarded such ratings, The Bahamas will become one of two jurisdictions in CFATF and one of six jurisdictions in the FATF Global Network to achieve 40 out of 40 Compliant and /or Largely Compliant technical ratings for the FATF 40 Recommendations.

We will continue to lean forward in our efforts to stay abreast of international standards and best practices. Further, we pledge to work closely with our industry partners forging a path ahead for the country’s second economic pillar – Financial Services. It has been a long five years to get to this point. Hard work, perspiration, persistence and consistent efforts by government, regulatory and law enforcement agencies and private industry stakeholders have made this successful story possible.

Cassandra Nottage National Identified Risk Framework Coordinator Office of the Attorney General

Dr. Cassandra Nottage was appointed to the post of the National Identified Risk Framework Coordinator (NIRFC) effective August 14, 2018. Dr. Nottage has over 40 years of experience in Anti-Money Laundering/Countering the Financing of Terrorism and Proliferation.

Dr. Nottage held the post of Manager of Bank Supervision at The Central Bank of The Bahamas for 12 years (2002 - 2014) with a total tenure of 36 years with the institution. Post departure from the Central Bank, Dr. Nottage commenced a financial sector and regulatory consulting business. It is through this consulting business that Dr. Nottage would be recruited to assist the Office of The Attorney General with its AML/CFT/ CFP mandate and progressed to the posting as the NIRFC.

Dr. Cassandra Nottage is a decorated Anti-Money Laundering/Countering the Financing of Terrorism Veteran. An avid scholar, Dr. Nottage took up the challenge to pursue a Doctorate’s Degree in Business Administration (with a concentration in International Business), days after retiring from the Central Bank, with Walden University after a 31 year hiatus from Academia.

Dr. Nottage successfully attained a Doctorate Degree from Walden University on October 28, 2018 and celebrated this milestone event on January 19, 2019 at formal graduation exercises. Dr. Nottage’ studies centred on the Bahamian financial sector – “Compliance Strategies to reduce the risks of Money Laundering and Terrorist Financing”.

Dr. Nottage has held prominent positions on the Central Bank’s Policy Advisory, Monetary Policy, Regulatory Decisions and Financial Stability Committees. She is a past Director of the Bahamas’ Deposit Insurance Corporation, Caribbean Financial Action Task Force Financial Expert, Caribbean Director on the governing Board of the Association of Banks of The Americas, twice past Chair of the Caribbean Group of Banking Supervisors and an Associate of the Toronto Leadership Centre.

Dr. Nottage has been a guest lecturer with the Bahamas Compliance Association and Bahamas Institute of Financial Services for 19 years lecturing in the ICA Anti-Money Laundering and Compliance Diploma Programmes and the Banking Certificates programme.

Dr. Nottage, while at the Central Bank travelled widely representing her country at international and regional conferences and seminars where at times she was a presenter on topical issues of banking supervision and anti-money laundering issues.