SUSPICIOUS TRANSACTION REPORTING RULES
 
General Duty
 
There is a mandatory obligation to report to the FIU where there is actual knowledge, a suspicion, or there are reasonable grounds to suspect that a transaction or a proposed transaction involves the proceeds of criminal conduct under POCA[1]. This is termed a suspicious transaction report (STR).
 
An STR must be made to the FIU where a financial institution knows, suspects or has reasonable grounds to suspect that a transaction or proposed transaction involves: (i) proceeds of criminal conduct as defined in the Proceeds of Crime Act, 2000, or (ii) any offence under the Proceeds of Crime Act, 2000 or (iii) an attempt to avoid the enforcement of any provision of the Proceeds of Crime Act, 2000.
 
 Auditors
 
Auditors have a mandatory obligation to make a report to the police, where they have a reasonable suspicion, which arises out of the performance of their duties as auditors, that a transaction is or may be relevant to the enforcement of the Proceeds of Crime Act.
 
 Legal Privilege
 
The obligation to report does not override legal professional privilege so long as the privileged communication is not made or brought into existence for the purpose of committing or furthering the commission of some illegal or wrongful act and is :
 
(1) confidential and passing between two lawyers in their professional capacities whether directly, or indirectly through agents of either;
 
(2)  legal advice communicated to a client;
 
(3)  or is brought into existence for the purpose of giving or obtaining legal advice or assistance;
 
Information held by lawyers which relates wholly or partly to, the receipts, payments, income, expenditure or financial transactions of a specified person (whether a counsel and attorney, his or her client or any other person), is not considered privileged if it is contained in, or comprises the whole or part of, any book, account, statement or other record prepared or kept by the counsel and attorney in connection with a client's account.


Restriction on disclosure concerning STRs
 
There is a strict prohibition against disclosing the fact that a report is being contemplated or has been made except to –
 
(a)  the financial institution's Supervisory Authority;
 
(b)  the Financial Intelligence Unit;

(c)  the Commissioner of Police or a member of the Police who is authorised by the Commissioner to receive the information;
 
(d)  an officer or employee or agent of the financial institution, for any purpose connected with the performance of that person's duties;
 
(e)  a counsel and attorney, for the purpose of obtaining legal advice or
representation  in relation to the matter;
 
(f)  the Central Bank of The Bahamas, for the purpose of assisting the Central     Bank to  carry   out   its  functions  under  the Central Bank of The Bahamas Act, 2000; or
 
(g)    in connection with, or in the course of, proceedings before a court. 
 
Form of the Suspicious Transactions Report
 
STRs are to be in a form prescribed by the FIU[2], (though in cases of urgency a verbal report is acceptable) and should contain the following details:

1. The name, address, date of birth, and occupation (or, where  appropriate, business or principal activity) of each person conducting the transaction and  of any person on whose behalf the transaction is conducted (if known to the person making the  report).

2.  Where an account is involved in the transaction - the type and identifying number of the account; the name of the person in whose name the account is operated and the names of the signatories to the account.

3. The nature and date of, the amount and type of currency involved in, the transaction.

4.  In relation to the financial institution through which the transaction was conducted, the name of the officer, employee, or agent of that financial institution who handled the transaction.

5. The name of the person who prepared the report.

Immunity for persons making STRs
 
The law provides persons with immunity from civil, criminal or disciplinary proceedings when making disclosures in good faith to the FIU or the Police.
 
Suspicious Transactions Reporting Offences
 
(1)   Failure to make an STR in circumstances that would require that a report be made.
 
Penalty $20,000 maximum fine for an individual and $100,000 for a corporation.
 
(2)  Knowingly making any statement that is false or misleading in a material particular; or knowingly omitting from any statement any matter or thing without which the statement is false or misleading in a material particular.

Penalty: maximum of $10,000 fine.

(3)  Disclosing information about the contemplation or existent of an STR -
(a) for the purpose of obtaining, directly or indirectly, an advantage or a pecuniary gain for yourself or any  other  person; or

(b) intentionally to prejudice any investigation into the commission or possible commission of a money  laundering offence.

Penalty: maximum 2 years imprisonment.
 
(4)    Disclosing information  about the contemplation or existence of an STR.         

 Penalty: Maximum fine of $5,000 of 6 months imprisonment for an individual and in the case of a corporation a maximum fine of $20,000.

THE MONEY LAUNDERING REPORTING OFFICER (MLRO)
 
All financial institutions are required to establish a point of contact with the Financial Intelligence Unit in order to handle the reported suspicions of their staff regarding money laundering.  Financial institutions are required to appoint a "Money Laundering Reporting Officer" to undertake this role, and such officer is required to be registered with the Financial Intelligence Unit. A financial institution is also required to appoint a Compliance Officer. However a financial institution may choose to combine the roles of the Compliance Officer and the Money Laundering Reporting Officer depending upon the scale and nature of business.
 
All financial institutions are required to provide the Money Laundering Reporting Officer with the necessary access to systems and records for the prompt investigation of suspicions and subsequent reporting to the Financial Intelligence Unit. 
 
OBLIGATION TO EDUCATE AND TRAIN STAFF
 
 Financial institutions must implement appropriate measures to make employees who have or are likely to have access to any information that may be relevant to money laundering activity aware of:
 
i.     policies and procedures put in place to detect and prevent money laundering including those for identification, record keeping and internal reporting; and  
 
ii.     the legislation relating to money laundering.
 
Financial institutions are also under an obligation to implement training programmes in the recognition and handling of suspicious transactions and ensure that these employees are exposed to such training at least once per year.