Bahamas: Combatting Drug Trafficking and Money Laundering

The Bureau for International Narcotics and Law Enforcement Affairs (INL) of the US Department of State has released its International Narcotics Control Strategy Report (INCSR) 2005. The INCSR is reported to Congress annually, to describe the related performance and cooperation of countries receiving US State Department counter-narcotics and law enforcement resources - including The Bahamas. The INCSR measures the progress participating governments have made over the past year in combating drug trafficking and money laundering.

Now in its 19th year, the report is described by Under Secretary of State for Global Affairs Paula Dobriansky as "specific and comprehensive." In separate volumes covering activities in (i) Money Laundering and Financial Crimes and (ii) Drug and Chemical Control, the INCSR underscores that one of the most significant global challenges to freedom, security and stability stems from the trafficking of illicit narcotics. In introducing the Report, Under Secretary Dobriansky pointed to the many linkages among drug trafficking and organized crime, money laundering, terrorism, trafficking in persons, weapons smuggling and government corruption, where the existence of each helps create the conditions for others to thrive.

The Report pays tribute to the National Anti-Drug Plan implemented by the Bahamas in 2004, providing for ongoing action by the Government in addressing the drug problem at the National, Regional and International level over the next five years. Also referenced was The Bahamas’ work as an active partner in the Operation Bahamas and Turks and Caicos (OPBAT), a multi agency international drug interdiction cooperative effort established in 1982, and the cooperation of the Drug Enforcement Unit (DEU) of the Royal Bahamas Police Force (RBPF) with the U.S. and foreign law enforcement agencies on drug investigations in 2004.

INCSR 2005 reports on the steps taken by The Bahamas to cooperate globally on anti-money laundering and financing of terrorism initiatives, including legislative and regulatory developments such as the establishment of the Financial Intelligence Unit and the Financial Transactions Reporting Act (FTRA), banking policies relating to physical presence requirements for licensed institutions, and The Bahamas/SEC agreement to ensure that information exchange on regulatory functions can be completed in an efficient and timely manner.

The Anti-Terrorism Act was passed in 2004 to implement the provisions of the UN International Convention for the Suppression of the Financing of Terrorism. In addition to formally criminalizing terrorism and making it a predicate crime for money laundering, the law provides for the seizure and confiscation of terrorist assets, reporting of suspicious transactions related to terrorist financing, and strengthening of existing mechanisms for international cooperation in this regard. "This law places The Bahamas in compliance with international standards related to terrorist financing," states the Report, confirming that "During 2004, the Government of the Commonwealth of the Bahamas (GCOB) continued to implement legislative reforms that strengthen its anti-money laundering regime and make it less vulnerable to exploitation by money launderers and other financial criminals."

On the U.S.-Bahamas Mutual Legal Assistance Treaty, the INCSR notes that this facilitates the bilateral exchange of information and evidence for use in criminal proceedings – and points to the separate unit created within the Attorney General’s Office in The Bahamas to process international requests for assistance, including MLAT requests. U.S. MLAT requests in general seek to secure financial information and evidence for use in criminal investigations and prosecutions in U.S. courts.

The Report concludes that the Government of the Commonwealth of The Bahamas has enacted substantial reforms that could reduce its financial sector’s vulnerability to money laundering; and that it must steadfastly and effectively implement those reforms. "The Bahamas should provide adequate resources to its law enforcement and prosecutorial/judicial personnel to ensure that investigations and prosecutions are satisfactorily completed, and requests for international cooperation are efficiently processed."

The United States, through the State Department and other agencies, provides more than a billion dollars in counternarcotics assistance each year to nations throughout the Americas and the world. Much of this aid assists foreign military and law enforcement in improving their capacity to fight the scourge of illicit drugs while respecting human rights and the rule of law. The State Department also provides training and technical assistance to help countries strengthen their border controls, develop stronger law enforcement, improve financial regulation and build judicial systems and a culture of lawfulness.

The US Department of State says the international commitment to these issues is growing. "Overlapping circles of international cooperation and success against drug growers, drug producers, and traffickers in this hemisphere and elsewhere, as well as against organized money laundering, and the criminal and terrorist organizations that rely on drug money – combine to suggest a growing international consensus determined to elevate, tackle and eliminate these related threats to stability and democracy."

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