The Central Bank of the Bahamas has issued a Guidance Notice relative to the Reliance on Third Parties to Conduct KYC on Customers, effectively waiving, in specific cases, a 30-day rule to receive written confirmation from third parties (eligible introducers) that they have completed customer due diligence on an underlying client.
Copies of the KYC documentation would be provided to licensees upon request, for example, for onward transmission to the Central Bank or more generally where regulators or law enforcement are conducting investigations.
Effectively, the application of the “30 day rule” may be waived in respect of clients where licensees only provide company incorporation or registered agent/office services to eligible introducers, subject to the following conditions:
(i) Eligible introducers are limited to the following financial institutions as listed in Paragraphs 122.1 and 122.2 of the Bank’s Guidelines for Licensees on the Prevention of Money Laundering & Countering the Financing of Terrorism:
- banks and trust companies;
- life assurance companies;
- broker dealers;
- investment fund administrators;
- operators of investment funds; or
- foreign financial institutions located in countries listed in the First Schedule of the FTRA (see list below)which exercise functions equivalent to those to the local institutions listed above.
(ii) The eligible introducer, for whom such services are provided, must be part of the licensee’s financial group and be located in a country listed in the First Schedule of the FTRA.
(iii) In such cases, eligible introducers must provide written confirmation that they have conducted due diligence on the underlying client.
(iv) Eligible introducers must agree to provide KYC documentation to the licensee within 3 days of a request for the same.
Furthermore, licensees who incorporate international business companies and provide registered agent/office services must comply with the due diligence requirements of the International Business Companies Act, 2000 to maintain a shareholders’ register for companies that they incorporate.