BAHAMAS Trends and Developments Contributed by: Sean Moree KC, Vanessa Smith and Erin Hill, McKinney, Bancroft & Hughes
power holder and can perform various administrative, supervisory, fiduciary and office-holding duties. BEEs are frequently used in purpose trust structures, for family offices and for acting in a fiduciary or protector capacity in trust structures. While the BEE is an extremely useful entity, it has not been regulated or registered with a Bahamas finan - cial services regulator. The OECD’s Global forum on transparency and exchange of information recom - mended that all persons carrying on trust business in the jurisdiction, particularly the BEEs, be supervised by the relevant authority. The proposed amendments outline various regulatory features of the BEEs, which will allow the jurisdiction to be compliant with the OECD’s requirements while remaining a competitive financial services jurisdiction. A group of proposed bills will address compliance with FATF standards and guidance. As a member of the Caribbean Financial Action Task Force, The Baha - mas will be among the first jurisdictions to undergo the 5th round mutual evaluation of its anti-money laun - dering/counter terrorist financing/counter proliferation financing regime in 2026. The last set of reforms the country implemented prior to its last mutual evaluation led to the jurisdiction’s removal from the FATF’s Grey List and the EU AML Blacklist in 2022. In preparation for The Bahamas’ upcoming assess - ment, the Bahamian government identified necessary amendments to the following six critical pieces of leg - islation: • the Proceeds of Crime (Amendment) Bill; • the Register of Beneficial Ownership (Amendment) Bill; • the Companies (Amendment) Bill; • the International Business Companies (Amend - ment) Bill; • the Financial Transaction Reporting (Amendment) Bill; and • the Non-Profit Organisations (Amendment) Bill. In general, the amendments enhance the transpar - ency, regulation and reporting requirements of those working in the financial services industry.
In summary, these amendments relate to the follow - ing. • The Proceeds of Crime (Amendment) Bill – sev - eral amendments are being proposed to maintain compliance with FATF Recommendations 36 and 38, which relate to, inter alia, identifying, tracing, investigating and confiscating criminal property. • The Register of Beneficial Ownership (Amendment) Bill – the amendments being proposed are required to align with the new requirements of FATF Recom - mendation 24, which requires beneficial owner - ship information to be up-to-date and not merely updated. FATF Recommendation 24 requires rapid access to beneficial ownership information. • The Companies (Amendment) Bill – the amend - ments being proposed are also required to align with the new requirements of FATF Recommenda - tion 24, specifically that countries take measures to prevent and mitigate the risk of the misuse of nominee shareholding and nominee directors. The new Section 80A of the Companies (Amendment) Bill seeks to prohibit the use of nominee directors and require existing arrangements to be declared with the Registrar General. • The International Business Companies (Amend - ment) Bill introduces parallel provisions to those of the Companies (Amendment) Bill. • The Financial Transaction Reporting (Amendment) Bill introduces amendments to bring the jurisdic - tion in line with FATF Recommendation 25, which deals with the transparency of legal arrangements and requires certain amendments to the Financial Transaction Reporting Act. FATF Recommendation 25 now requires trustees and persons holding an equivalent position in a similar legal arrangement to obtain and hold beneficial ownership information. • The Non-Profit Organisations (Amendment) Bill proposes amendments to maintain compliance with FATF Recommendation 8, which requires targeted oversight of non-profit organisations to prevent misuse. As it relates to the Trustee (Amendment) Bill, the gov - ernment seeks to amend Section 77 (1) of the Trustee Act. Currently, Section 77 (1) permits trustees or per - sonal representatives to apply (without commencing an action) for the court’s opinion, advice or direction
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