COUNTERING PROLIFERATION FINANCING GUIDELINES

FOR FINANCIAL INSTITUTIONS AND DESIGNATED NON-FINANCIAL BUSINESSES AND PROFESSIONS

Revised edition, October 2026: incorporating the re-application of United Nations sanctions on Iran and the FATF's 2025 findings on complex proliferation financing and sanctions evasion schemes

Prepared by:
Group of Financial Services Regulators
Guidance Note published August 2018
Guidelines published July 2025; Revised October 2026

About the Group of Financial Services Regulators (GFSR)

This Guidance is issued by the Group of Financial Services Regulators (GFSR). The members of the GFSR are the Central Bank of The Bahamas, Securities Commission of The Bahamas, Insurance Commission of The Bahamas, Compliance Commission of The Bahamas, and Gaming Board for The Bahamas. The Financial Intelligence Unit (FIU) is a permanent observer to the GFSR. The FIU attends all meetings and participates in GFSR activities, as appropriate.

The GFSR aims to promote financial stability and improve the efficiency and effectiveness of financial regulation in The Bahamas through information sharing agreements, and processes to collaborate and cooperate. The Group is uniquely positioned to identify, monitor and address systemic risk in the financial services sector. The GFSR also works to harmonize regulatory practices, to minimize supervisory overlap and foster greater efficiency in financial services regulation and supervision.

Each GFSR member is empowered, through legislation, to supervise and regulate its licensees and registrants in line with relevant laws and policy guidelines, including The Bahamas' frameworks for antimoney laundering, countering the financing of terrorism, and countering proliferation financing (AML/CFT/CPF).

The members of the GFSR are signatories to a Memorandum of Understanding (MoU), which establishes the framework by which information may be shared between the regulators to effectively supervise the financial services sector in The Bahamas. The MoU also outlines the arrangement for consolidated supervision of systemically important financial services institutions and conglomerates in The Bahamas, including, but not limited to, regular communication, monitoring capital and inter-group transactions and, where appropriate, mutual decision-making regarding supervisory approvals and reprimands.

About the Group of Financial Services Regulators (GFSR) ............................................................................ 2

Glossary: Key Abbreviations ......................................................................................................................... 5

Glossary: Key Terminology ............................................................................................................................ 6

About the 2026 Revision ............................................................................................................................... 8

1. Background ............................................................................................................................................... 9

Inclusion of Digital Asset Businesses ..................................................................................................... 9

2. Introduction ............................................................................................................................................ 10

2.1 Purpose, Objectives, and Scope ........................................................................................................ 11

2.2 Role of the Group of Financial Services Regulators .......................................................................... 12

2.3 Role of the Identified Risk Framework Steering Committee ............................................................ 12

3. Overview of Proliferation Financing ....................................................................................................... 13

3.1 Proliferation ...................................................................................................................................... 13

3.2 Proliferation Financing ...................................................................................................................... 13

3.2.1 Dual Use Goods .......................................................................................................................... 14

3.3 Stages of Proliferation Financing ...................................................................................................... 15

3.4 Comparison between Money Laundering, Terrorist Financing and Proliferation Financing ............ 15

3.5 Identifying and Classifying Proliferation Financing Risks .................................................................. 17

3.5.1 Performing a Proliferation Financing Risk Assessment .............................................................. 18

4. Indicators of Potential PF-TFS Breach or Evasion ................................................................................... 19

4.1 Customer Profile Risk Indicators ....................................................................................................... 20

4.2 Account and Transaction Activity Risk Indicators ............................................................................. 20

4.3 Trade Finance Risk Indicators ........................................................................................................... 21

5. Complex Proliferation Financing and Sanctions Evasion Schemes ......................................................... 21

5.1 The FATF's 2025 Report and its Relevance to The Bahamas ............................................................ 21

5.2 The Current Threat Picture ............................................................................................................... 22

5.3 Scope: United Nations Measures and Other Sanctions Regimes ..................................................... 23

5.4 The Four Typologies .......................................................................................................................... 24

5.4.1 Enlisting intermediaries to evade sanctions .............................................................................. 24

5.4.2 Obscuring beneficial ownership to access the financial system ................................................ 24

5.4.3 Using virtual assets and other technologies .............................................................................. 25

5.4.4 Exploiting the maritime and shipping sectors............................................................................ 26

5.5 Vulnerabilities to Consider in the Proliferation Financing Risk Assessment ..................................... 27

5.6 Detection and Reporting: Good Practices......................................................................................... 28

6. Counter Proliferation Financing: Regulatory and Legal Framework ....................................................... 29

6.1 International Standards, Obligations and Sanctions Regimes .......................................................... 29

6.1.1 United Nations Security Council Resolutions ............................................................................. 29

6.1.2 Financial Action Task Force ........................................................................................................ 34

6.2 Domestic Obligations ........................................................................................................................ 37

6.3 Implementing the Re-applied Iran Measures: Expectations of the GFSR ......................................... 41

7. Sectoral Guidance ................................................................................................................................... 43

7.1 Central Bank of The Bahamas ........................................................................................................... 43

7.1.1 CPF Requirements ...................................................................................................................... 44

7.2 Securities Commission of The Bahamas ........................................................................................... 48

7.2.1 CPF Requirements ...................................................................................................................... 49

7.3 Insurance Commission of The Bahamas ........................................................................................... 54

7.3.1 Categorization and Mitigation of Risk ........................................................................................ 59

7.3.2 Record Keeping Procedures ....................................................................................................... 60

7.4 Compliance Commission of The Bahamas ........................................................................................ 62

7.4.1 CPF Obligations for DNFBPs ....................................................................................................... 63

7.5 Gaming Board for The Bahamas ....................................................................................................... 65

7.5.1 CPF Requirements ...................................................................................................................... 65

8. Conclusion ............................................................................................................................................... 69

Annex A: Risk Indicators for Complex Proliferation Financing and Sanctions Evasion ............................... 70

A.1 Customer information and behaviour .............................................................................................. 70

A.2 Transactions ...................................................................................................................................... 71

A.3 Trade and shipping activity ............................................................................................................... 73

Annex B: The Re-established 1737 Sanctions List (Summary) .................................................................... 76

B.1 Individuals ......................................................................................................................................... 76

B.2 Entities and other groups ................................................................................................................. 79

Contact Information .................................................................................................................................... 83

Glossary: Key Abbreviations

Objective: This section provides key abbreviations consistently used throughout this publication.

Abbreviation	Meaning
1737 Committee	The Security Council Committee established pursuant to resolution 1737 (2006), re-established on 28 September 2025
1737 Sanctions List	The list of individuals and entities subject to the asset freeze under resolutions 1737 (2006), 1747 (2007), 1803 (2008) and 1929 (2010), maintained by the 1737 Committee and incorporated in the UN Security Council Consolidated List
AML/CFT/CPF	Anti-Money Laundering/Countering the Financing of Terrorism/Countering Proliferation Financing
ATA	Anti-Terrorism Act 2018
CBBA	Central Bank of The Bahamas Act 2020
Central Bank	Central Bank of The Bahamas
CFATF	Caribbean Financial Action Task Force
DARE Act	Digital Assets and Registered Exchanges Act 2024
DNFBPs	Designated Non-Financial Businesses and Professions
DPRK	Democratic People's Republic of Korea
EDD	Enhanced Due Diligence
FCSPA	Financial and Corporate Service Providers Act 2020
FTRA	Financial Transactions Reporting Act 2018
GFSR	Group of Financial Services Regulators
IFA	Investment Funds Act 2019
IMO	International Maritime Organization
IOEAMA	International Obligations (Economic and Ancillary Measures) Act 1993
IRGC	Islamic Revolutionary Guard Corps
JCPOA	Joint Comprehensive Plan of Action (2015)

Abbreviation	Meaning
KYC	Know Your Customer
ML/TF/PF	Money Laundering/Terrorist Financing/Proliferation Financing
National Coordinator	The National Identified Risk Framework Coordinator appointed under the Proceeds of Crime Act 2018
POCA	Proceeds of Crime Act 2018
SFI	Supervised Financial Institution
Snapback Mechanism	The process in paragraphs 11 and 12 of resolution 2231 (2015) by which the earlier Security Council measures on Iran were re-applied
STR	Suspicious Transaction Report
TFS	Targeted Financial Sanctions
UNSC	United Nations Security Council
UNSCR	United Nations Security Council Resolution
VASP	Virtual Asset Service Provider (in The Bahamas, a digital asset business registered under the DARE Act)
WMD	Weapons of Mass Destruction

Glossary: Key Terminology

Objective: This section provides definitions of key terminology used throughout this guidance.

Term	Definition
Competent Authorities	Refer to all public authorities with designated responsibilities for combating money laundering and/or terrorist financing and/or proliferation financing, namely Central Bank of The Bahamas, Securities Commission of The Bahamas, Insurance Commission of The Bahamas, Compliance Commission of The Bahamas, Gaming Board for The Bahamas, Financial Intelligence Unit, and Office of the Attorney General.

Term	Definition
Designated Entities	Individuals or entities and their associates designated as terrorist entities by the United Nations' Security Council (UNSC). For the purposes of these Guidelines, designated entities include individuals and entities designated by or under the authority of the Security Council for proliferation-related purposes, including under resolutions 1718 (2006) and 1737 (2006) and their successor resolutions.
FIU	The Financial Intelligence Unit is responsible for receiving, analysing, obtaining and disseminating information, which relates to or may relate to the proceeds of the offences in the POCA and under the Anti-Terrorism Act (ATA).
Proliferation	The transfer and export of nuclear, chemical, or biological weapons, their means of delivery, and related materials.
Proliferation Financing	The act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical, or biological weapons and their means of delivery and related materials (including both technologies and dual use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligations.
Regulated Person	A collective term used in these Guidelines to refer to any person licensed, registered or otherwise supervised by a GFSR member. It encompasses each member's sectoral terminology (supervised financial institution, registrant, licensee, insurer, DNFBP, gaming licensee), which continues to apply within that member's framework.
Targeted Financial Sanctions	The act of asset freezing, blocking, and rejecting of transactions and persons to prevent, suppress, and disrupt the proliferation of weapons of mass destruction and its financing in line with sanctions, such as those imposed by the UNSC.

About the 2026 Revision

The GFSR first published these Guidelines on 25 July 2025. This revised edition, issued in October 2026, incorporates two developments that bear directly on how regulated persons identify, assess and mitigate proliferation financing risk:

The re-application of United Nations sanctions on Iran. On 27 September 2025 (28 September 2025, UTC), the measures in Security Council resolutions 1696 (2006), 1737 (2006), 1747 (2007), 1803 (2008), 1835 (2008) and 1929 (2010) were re-applied through the process in resolution 2231 (2015), and the 1737 Committee and its sanctions list were re-established. On 29 October 2025, the FATF confirmed that these resolutions fall within Recommendation 7.1 Iran-related targeted financial sanctions therefore sit squarely within the definition of proliferation financing risk that regulated persons are required to assess and mitigate. Section 6.1.1 and section 6.3 address this change.
The FATF report on Complex Proliferation Financing and Sanctions Evasion Schemes (June 2025). The report updates the FATF's 2018 and 2021 guidance with current typologies, vulnerabilities, risk indicators and best practices.2 Several of the typologies it describes relate to sectors that are significant to The Bahamas, including international financial services, corporate and trust services, digital assets, insurance and the maritime sector. Section 5 and Annex A address the report.

The revised edition also records the enactment of the Anti-Terrorism (Amendment) Act, 2026 (section 6.2), sets out the GFSR's expectations and timetable for regulated persons arising from the revision (section 6.3), and adds sector-specific points to section 7. These Guidelines will remain subject to ongoing review by the GFSR, and will be updated where appropriate should any of the following occur: (i) the Security Council amends the 1737 Sanctions List or the re-applied measures; (ii) the FATF further revises Recommendation 7 or its guidance; or (iii) the domestic legislative framework described in section 6.2 is further amended.

[1] 1FATF (29 October 2025), Update: Re-application of UN Security Council Resolutions related to Iran, Paris.

[2] 2FATF (2025), Complex Proliferation Financing and Sanctions Evasion Schemes, FATF, Paris.

1. Background

The Group of Financial Services Regulators (GFSR) publishes these updated guidelines to provide guidance to facilitate both public and private sector stakeholders (collectively referred to as "stakeholders") in identifying, assessing, understanding and mitigating their proliferation financing risks. The guidelines also aim to facilitate stakeholders in implementing their proliferation financing obligations.

In 2018, the GFSR released a Guidance Note on Proliferation and Proliferation Financing (the 2018 Guidance Note), which was intended to raise awareness of the risks and vulnerabilities created by proliferation and proliferation financing, describe indicators of possible proliferation financing risks, and illustrate the potential damage to The Bahamas if a regulated entity plays an appreciable role in the activity. The 2018 Guidance Note also provided common definitions surrounding proliferation financing, described the regulatory framework in The Bahamas as it related to proliferation financing, and described international standards and best practices to identify, assess, understand and combat proliferation and proliferation financing. Since its publication in 2018, there have been updates to the Bahamian CPF regime and the Financial Action Task Force (FATF) has provided further guidance. These updated Guidelines seek to guide the financial services industry on the regime for countering proliferation financing (CPF), clarify regulatory expectations and changes made to the framework, and further align The Bahamas with the FATF Standards.

In October 2020, the FATF revised Recommendation 1 (R.1.) and its Interpretive Note (INR.1) to, among other things, develop a common understanding about the impact of the amendments to R.1 and INR.1. In particular, how countries and private sector entities should implement the new requirements to assess and mitigate proliferation financing risks given the rule-based nature of the targeted financial sanctions (TFS) under Recommendation 7 (R.7). The FATF also made a minor consequential amendment to Recommendation 2 (R.2), to insert reference to counter proliferation financing in the context of national cooperation and coordination, and added a new interpretive note that sets out the inter-agency framework to promote cooperation, coordination and information exchange. The GFSR reviewed the updated Recommendations in tandem with The Bahamas' CPF framework, and made amendments to the various legislation, namely the Anti-Terrorism Act 2018 (ATA), the Financial Transactions Reporting Act 2018 (FTRA) and the Proceeds of Crime Act 2018 (POCA), which led to The Bahamas' rating to change from partially compliant with R.7 to largely compliant, and maintained the rating of compliant with R.2.

As new products and developing technologies emerge, standard setting bodies continue to update their guidance on best practices to identify and combat proliferation financing. The GFSR is committed to ongoing review and incorporation of these updates where applicable, and informing stakeholders of their new and continuing obligations. In light of this, the GFSR issues these guidelines to provide the requirements for relevant financial services providers to comply with the obligations imposed under the relevant financial services laws of The Bahamas, thereby managing PF risks and threats.

Inclusion of Digital Asset Businesses

The Digital Assets and Registered Exchanges Act 2020 was adopted in November 2020 and has since been replaced by the Digital Assets and Registered Exchanges Act, 2024 (together, the DARE Act). The DARE Act regulates the issuance, sale, and trade of digital assets in or from within The Bahamas. The DARE Act also prescribes a regulatory framework for persons and entities engaged in digital asset business. In order to maintain the country's robust anti-money laundering, countering financing of terrorism, and countering proliferation financing (AML/CFT/CPF) framework, a priority of 2021 was to capture the digital asset regime in the AML/CFT/CPF framework through the Fifth Schedule, the Corrigendum to the DARE Act. This ensures that digital asset businesses and prescribed activities are included in the country's proliferation financing legislative framework at the national level.

Protecting the country's reputation in financial services remains a priority as we continue to develop our markets. To date, the GFSR has not identified major red flags in relation to proliferation financing in The Bahamas; however, publishing updated guidelines ensures the regime remains current and that the absence of detected activity is not mistaken for the absence of risk. The Bahamas has continued to progress in strengthening its framework for money laundering and terrorist and proliferation financing risks, as evident in the country's 2022 follow-up report published by the Caribbean Financial Action Task Force (CFATF) showing that The Bahamas is rated either compliant or largely compliant with all 40 of the FATF's Recommendations.

The GFSR intends to continue this trend of compliance; and it is anticipated that these Guidelines provide the necessary clarity for the industry, and country at large, to carry out its mandated obligations. The GFSR will continue to do its part in keeping the relevant legislation both updated and robust, in line with international best practices, thus establishing The Bahamas as the jurisdiction of choice for financial services.

2. Introduction

The FATF defines proliferation as "the transfer and export of nuclear, chemical, or biological weapons, their means of delivery and related materials."3 Moreover, the United Nations Security Council (UNSC) affirmed that proliferation poses a significant threat to international peace and security.4 UNSC resolutions call on Member States to implement measures to prevent proliferation and combat its financing, wherever possible. The proliferation financing activities of certain state actors5 underscore the need for strategies to combat proliferation financing on a global scale.

FATF Recommendation 7 requires jurisdictions to implement targeted financial sanctions (TFS) relating to proliferation financing made under UNSCRs. Recommendation 2 requires jurisdictions to adopt national cooperation and coordination mechanisms to combat proliferation financing of weapons of mass destruction (WMD). Immediate Outcomes 1 and 11 assess the effectiveness of relevant aspects of these arrangements within countries in implementing the Recommendations.6

[3] 3This includes, inter alia, technology, goods, software, services, or expertise. See 2008 FATF Proliferation Financing Report.

[4] 4See Security Council Resolution 1540.

[5] In particular, Iran, The Democratic People's Republic of Korea, and Russia. As at October 2026, the DPRK and Iran are subject to United Nations proliferation-related targeted financial sanctions within FATF Recommendation 7; see sections 5.2 and 6.1.1.

[6] 6FATF (2018), Guidance on Counter Proliferation Financing: The Implementation of Financial Provisions of United Nations Security Council Resolutions to Counter the Proliferation of Weapons of Mass Destruction, FATF, Paris.

In June 2018, the FATF issued non-binding guidance (2018 FATF Guidance) to facilitate both public and private sector stakeholders in understanding and implementing their CPF obligations. In response, the GFSR issued a guidance note in August 2018 to existing and prospective registrants and licensees. This note, among other things, "provided common definitions surrounding proliferation financing and described the regulatory framework in The Bahamas, coupled with international standards and obligations that are relevant to combatting proliferation financing risks."7 Notably, the 2018 FATF Guidance neither required countries to assess their proliferation financing risks nor to apply risk-based8 TFS.

In October 2020, the FATF updated its Standards (2020 Standards) to require that both countries and private sector entities identify, assess and understand the proliferation financing risks they face. They are also required to take action to mitigate the identified risks. The 2020 Standards do not prescribe a specific risk methodology, but instead recommend that individual countries develop a customized methodology that considers the nature, scope and size of the activity identified.

Regularly identifying, assessing and understanding proliferation financing risks is essential to strengthening a country's ability to prevent designated persons involved in proliferation from accessing, storing, transferring and utilizing funds and other assets. Implementing TFS related to proliferation and its financing is crucial for a robust CPF regime.

As a major global financial hub, The Bahamas must remain alert to the risk that its financial system could be used to facilitate proliferation financing. The absence of detected activity does not, in itself, establish the absence of risk or diminish the need for effective preventive measures. Financial regulators, financial institutions, and individuals within the jurisdiction also have a responsibility to identify and monitor PF vulnerabilities and implement safeguards against The Bahamas' involvement in such activity. As new complex financial products emerge, jurisdictions must remain vigilant when applying their counter proliferation principles.

2.1 Purpose, Objectives, and Scope

These Guidelines serve several purposes, including:

Defining proliferation and proliferation financing;
Explaining PF risks and key indicators;
Describing current typologies of complex proliferation financing and sanctions evasion, and the threats posed and vulnerabilities they exploit;
Describing the role of the financial services regulators in the jurisdiction in combating PF;
Describing the key concepts relevant to assessing PF risks;
Highlighting the regulatory framework that supports CPF; and

[7] 7Guidance Note on Proliferation and Proliferation Financing, August 21, 2018.

[8] 8The requirement was rule-based.

Offering sector guidance for members of relevant subsections of the financial services industry in The Bahamas, namely all sectors regulated by the Central Bank of The Bahamas, Securities Commission of The Bahamas, Insurance Commission of The Bahamas, Compliance Commission of The Bahamas, and Gaming Board for The Bahamas.

2.2 Role of the Group of Financial Services Regulators

Formed in 2001, the GFSR9 comprises the financial market regulators in The Bahamas. Its primary objectives are to promote financial sector stability through timely and effective exchange of information among regulators, coordinate supervisory efforts, and devise responses to potential systemic risks. Each member is tasked with supervising and regulating their respective licensees and registrants in accordance with relevant laws, policies and guidelines.

Along with their individual responsibilities, GFSR members are bound by a signed Memorandum of Understanding (MoU), which requires them to, inter alia:

Foster regular communication and cooperation amongst members;
Monitor capital and inter-group transactions; and
Engage in mutual decision-making regarding supervisory approvals and reprimands, where applicable.

In matters of national importance, members collaborate and cooperate to, inter alia, release comprehensive sector-specific guidance for The Bahamas' financial services industry in areas of anti-money laundering, countering the financing of terrorism and countering proliferation financing (AML/CFT/CPF).

2.3 Role of the Identified Risk Framework Steering Committee

The Identified Risk Framework Steering Committee (IRF Steering Committee), established and mandated by the Proceeds of Crime Act 2018, is a collaborative team comprised of representatives from various regulatory and enforcement authorities in The Bahamas. The IRF Steering Committee is tasked with several responsibilities:

Periodically coordinating a national risk assessment (NRA) to identify, assess and understand the identified risks, ensuring that such assessments remain updated and relevant;
Maintaining surveillance of FATF pronouncements regarding the application of enhanced due diligence to the country's risks;
Receiving and collating reports from industry stakeholders of persistent regulatory failures by a jurisdiction or foreign financial institution, and compiling a list of such jurisdictions or foreign financial institutions;

[9] 9GFSR comprises the Central Bank of The Bahamas, Securities Commission of The Bahamas, Insurance Commission of The Bahamas, Compliance Commission of The Bahamas, and the Gaming Board for The Bahamas. The Financial Intelligence Unit has been granted an observer status at GFSR meetings.

Advising financial institutions of their obligations to apply enhanced due diligence to transactions originating from jurisdictions or foreign financial institutions named by the IRF Steering Committee and the FATF;
Coordinating the development, regular review and implementation of national policies and activities to mitigate identified risks;
Collecting and analysing statistics and other information from competent authorities to assess the effectiveness of the identified risk framework;
Coordinating measures to identify, assess and understand the impact of prescribed provisions of the POCA; and
Establishing appropriate mechanisms for providing information on identified risks to relevant financial institutions, self-regulatory bodies and professional associations.

The IRF Steering Committee is tasked with identifying, assessing and implementing appropriate mitigating measures to address the financial sector risks to which the jurisdiction is exposed.

3. Overview of Proliferation Financing

Preventing proliferation financing is essential to maintaining global security and preventing the distribution of weapons of mass destruction (WMDs). As a key trade and finance hub in the region, The Bahamas must remain vigilant in identifying and preventing the transfer of funds or materials, while ensuring the security and stability of its financial systems.

3.1 Proliferation

Proliferation relates to the transfer of, or facilitating the transfer of, technology, goods, software, services, or expertise that can be used in programs developing WMDs. Proliferation also supports the actions of bad actors on an international scale. Inhibiting the activities that support proliferation, including proliferation financing, aligns with the goals of the GFSR, the IRF Steering Committee and international bodies such as the FATF.

3.2 Proliferation Financing

The 2010 FATF Status Report on Combating Proliferation Financing10 provides a working definition of proliferation financing, as follows:

"The act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical, or biological weapons and their means of delivery and related materials (including both technologies

[10] 10See Combating Proliferation Financing: A Status Report on Policy Development and Consultation (fatf-gafi.org).

and dual use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligations".

Proliferation financing provides bad actors with the opportunity to acquire nuclear, chemical, or biological weaponry, or to acquire the knowledge necessary to produce them. Proliferation financing, therefore, represents a significant threat to global stability and peace, as there is evidence to suggest that terrorists and terrorist organizations have sought to use WMDs in acts of terrorism.11 Financial authorities, therefore, play a pivotal role maintaining global stability.

Financial authorities can inhibit the movement of funds related to ML, TF, and PF through adopting international standards and collaborating with international regulatory bodies. In doing so, financial institutions and DNFBPs will also be obligated to incorporate a risk-based approach when dealing with customers and potential customers. Through vigilantly monitoring customer and potential customer activities using a risk-based approach, financial institutions, DNFBPs, and authorities can inhibit the flow of funds intended for illicit purposes.

3.2.1 Dual Use Goods

Implementing appropriate safeguards concerning dual use goods is crucial in the fight against proliferation and proliferation financing within a jurisdiction. Dual use goods are products, technology, or equipment that can serve both civilian and military applications. Examples include items such as lasers, electronics, radio navigation systems, and common household materials that can be easily repurposed to make weapons. Proliferators often exploit these goods in circumvention of TFS. Consequently, trade in these goods must be heavily monitored by relevant government agencies.

[11] 11Examples include Abdul Qadeer Khan, and WMD procurement by Iran and the Democratic People's Republic of Korea via proliferation financing. See AQ Khan is Dead: Long Live the Proliferation Network, Royal United Services Institute (rusi.org). Also, see the Khan Case presented by the FATF in their Proliferation Financing Report, page 62.

While it can be difficult to determine a customer's intended usage of dual use goods when purchased, there may be instances where financial institutions and DNFBPs can flag certain transactions (e.g. wire transfers) for review. To keep abreast of these goods, financial institutions and DNFBPs may review The Bahamas Customs' list of prohibited and restricted imports and exports.12

3.3 Stages of Proliferation Financing

There are three stages of proliferation financing: fundraising, disguising, and procurement.13 The following illustration summarizes these three stages:

3.4 Comparison between Money Laundering, Terrorist Financing and Proliferation Financing

ML, TF, and PF share several similarities, along with a few notable differences. They all pose significant jurisdictional risks that can be effectively mitigated through coordinated efforts by stakeholders. While they are similar, they also have distinct characteristics. A comparison of ML, TF, and PF can be found in the table below:

[12] 12See Bahamas Customs' List of Prohibited and Restricted Imports and Exports.

[13] 13See "Identifying Proliferation Financing" document prepared by the Financial Reporting Authority, Cayman Islands (gov.ky).

Comparison Between ML, TF, and PF

	Money Laundering	Terrorist Financing	Proliferation Financing
Definitions (Summarized)	ML is the process of concealing the origin of funds derived from criminal activities/predicate offences.	TF is the act of soliciting, collecting or providing funds with the intention of using them in support of terrorist activities.	PF is the act of providing funds which are used for nuclear, chemical, or biological weapons and their means of delivery and related materials in contravention of national laws or, where applicable, international obligations.
Origin of Funds	Funds are usually derived from criminal activity or predicate offences.	Funds can be derived from both legitimate and illegitimate sources.	Funds can be derived from both legitimate and illegitimate sources.
Transaction Red Flags	Focuses on suspicious transactions, outside of the norm for a customer's wealth.	Concerned with suspicious relationships between two parties who appear unrelated.	Focusing on detection of parties interacting with sanctioned persons, and the purchase of goods and services used in WMD production.
Destination of Funds	The money is ultimately returned to its source, after being legitimized through a series of transactions.	The money moves from the financier to the ultimate users of the funds: terrorists and terrorist organizations.	The money is sent from the state or individual to the broker or manufacturer of the goods and services needed for WMD development.

The key differences between ML, TF, and PF lie in the source and intended purpose of the funds. ML involves the process of legitimizing illegally acquired funds. These funds can then be employed for various activities, including acquiring both legal and illegal goods and services. TF entails using funds, from legal or illegal sources, to support terrorist activities or organizations. Meanwhile, PF involves using funds from legal or illegal sources to acquire WMDs, which can then support proliferators in illicit acts, sometimes including acts of terrorism.

3.5 Identifying and Classifying Proliferation Financing Risks

Both public and private sector entities may encounter various PF risks. However, the FATF's definition of PF risks strictly refers to the potential breach, non-implementation, or evasion of the obligations of TFS.14 When establishing counter-PF measures, it is essential to identify and assess additional PF risks that may exist. These risks can be categorized as either inherent or residual.

Inherent risks are associated with the nature of activities and the actors involved, prior to the implementation of specific countermeasures or policies. Understanding these risks is crucial for evaluating the effectiveness of control measures. In cases where no such measures are in place, it facilitates a better understanding of the impact of these risks on the jurisdiction or entity. The assessment of inherent risk levels can be based on various factors, including:

Proximity or links to sanctioned states or individuals: The inherent PF risk level can rise based on the extent of business dealings with individuals associated with sanctioned entities.
Regulatory Gaps: Loopholes in regulations aimed at the implementation of UNSCRs can create vulnerability for a jurisdiction and increase inherent risk.
The nature of exports and imports: If a jurisdiction or customer is involved in the production or importation of dual-use goods, the inherent risk may increase.
Complexity of Services: Institutions that offer complex products and services may have a higher level of inherent risk.
Customer base: Institutions that onboard high-risk customers15 might inherently face an increased risk of unintentionally engaging in PF activities.

Residual risks refer to the risks that remain after risk mitigation measures have been employed. These risks can emerge due to weaknesses or gaps in the execution or enforcement of countermeasures or policies. Nations and private sector entities that comprehend residual risks are better able to determine the effectiveness of their PF risk management efforts within their jurisdiction or business operations. A substantial level of residual risk may indicate the need for the jurisdiction or private sector entity to introduce supplementary controls. Some indicators that could imply a high level of residual PF risks for a jurisdiction include:

Limited implementation: Countermeasures or policies may not be comprehensively implemented, leaving vulnerabilities that can be exploited by proliferation financiers.
Insufficient resources: Jurisdictions or private sector entities may lack the necessary resources for complete implementation or enforcement of countermeasures or policies, resulting in exploitable gaps.

[14] 14As per the FATF's Guidance on Proliferation Financing Risk Assessment and Mitigation.

[15] 15An entity's customer base may be considered 'high-risk' due to a number of factors, including the geographical distribution of those customers.

Corruption: Instances of corruption within jurisdictions or private sector entities can compromise the implementation or enforcement of countermeasures or policies, leaving potential vulnerabilities for exploitation.
Lack of coordination: Inadequate coordination among jurisdictions or private sector entities can result in gaps or redundancies in countermeasures or policies.

Mitigation efforts that can be employed to address residual risks in a jurisdiction include:

Regularly updating and adhering to current sanctions lists;
Implementing a risk-based approach to customer onboarding and ongoing monitoring; and
Enforcing a strong legislative framework for AML/CFT/CPF, including the ability to apply TFS obligations.

Residual risks underscore the importance of continuous monitoring, review, and improvement of countermeasures and policies to ensure their effectiveness and efficiency in addressing proliferation financing.

3.5.1 Performing a Proliferation Financing Risk Assessment

FATF's Recommendation 1 mandates both jurisdictions and private sector entities to perform a PF risk assessment. This enhanced understanding is essential for establishing a robust CPF framework.

A summary of the FATF's proposed stages of risk assessment is outlined in the table below:

Stages of Conducting a PF Risk Assessment

Stage	Explanation
1. Preliminary Scoping Exercise	Determine the objectives, scope, and focus of the risk assessment, including consideration for public and private sectors, national CPF activities, and profiles for individuals and institutions.
2. Planning and Organization	It is encouraged to prepare a project plan and identify the relevant personnel from all stakeholders, including authorities and financial institutions.
3. Identification	It is encouraged to identify PF threats and vulnerabilities unique to the jurisdiction or private sector entity.
4. Analysis	Jurisdictions should analyse identified threats, vulnerabilities and the probability of potential occurrence. Consequences of those threats and vulnerabilities should also be considered.
5. Evaluation and Follow-Up	The analysis conducted should inform the jurisdiction or private sector entity of the priority risk areas that require urgent attention and mitigation.

Performing a PF risk assessment provides a comprehensive understanding of the exposure to threats, vulnerabilities, and consequences associated with PF.

Threats: Threats include designated persons or entities with the potential to evade, breach, or exploit the failure to implement TFS. For instance, a customer engaged in importing dual-use goods for business operations could be a threat, as these goods are easily repurposed for proliferation activities.
Vulnerabilities: Vulnerabilities are factors that can be exploited by threats, or that may facilitate the breach or evasion of TFS. These vulnerabilities can include weak legislative provisions and ineffectual operational controls, which make it easier for threats to operate.
Consequences: Consequences occur when funds or assets are made available to designated persons and entities, allowing them to acquire WMDs or their means of delivery. Such consequences can result in loss of life due to the use of WMDs and the destabilization of commerce within the jurisdiction.

PF risk assessments may be conducted either as part of broader NRAs or specific stand-alone assessments, it may not require a stand-alone risk assessment if pre-existing risk assessment methodologies are adequate to incorporate PF risks.

4. Indicators of Potential PF-TFS Breach or Evasion

As previously indicated, PF risks refer to the breach, non-implementation, or evasion of TFS obligations. PF risks may emerge due to various factors, such as:

Risk of a potential breach or non-implementation of TFS: This risk may materialize when designated entities and individuals access financial services, and/or funds or other assets, as a result of the following:
- Delay in communication of designations at the national level;
- Lack of clear obligations on private sector entities; and/or
- Failure on the part of private sector entities to adopt adequate policies and procedures to address their proliferation financing risks.
Risk of evasion of TFS: This risk may materialize due to concerted efforts of designated persons and entities to circumvent TFS.

The prior examples were not exhaustive, but risk indicators accompany each example. The presence of a risk indicator can imply or suggest the likelihood of unusual or suspicious activity. While a single indicator may not immediately warrant suspicion, it should trigger further monitoring. When multiple indicators are present, a more thorough examination becomes necessary.

The following risk indicators listed are not exhaustive and are based on the FATF's updated Guidance on Counter Proliferation Financing.16 They are supplemented by the typologies in section 5 and by the

[16] 16See FATF's Guidance on Proliferation Financing Risk Assessment and Mitigation.

indicators in Annex A, which are drawn from the FATF's 2025 report on Complex Proliferation Financing and Sanctions Evasion Schemes.

4.1 Customer Profile Risk Indicators

The customer provides vague or incomplete information about their proposed trading activities during onboarding and is reluctant to provide additional information about their activities when queried;
The customer, (if an entity: its owners or senior managers), appears in sanctioned lists, negative news, or is subject to ongoing or past investigations or convictions;
The customer has connections to a country that is of proliferation concern;
The customer is involved in dealing with dual-use goods, goods subject to export control, or complex equipment for which they lack technical background, or which is incongruent with their stated line of activity;
The customers or account holders have previously violated requirements under dual-use or export control regimes;
The customer participates in complex trade deals involving numerous third-party intermediaries in lines of business differing from their business profile established at onboarding;
A commercial business conducting transactions that suggest it is acting as a money-remittance business or a pay-through account, involving rapid movement of high-volume transactions and a small end-of-day balance without clear business reasons;
The customer is affiliated with a university or research institution and is involved in the trading of dual-use goods or goods subject to export control; and/or
A customer of a manufacturing or trading firm wants to use cash in transactions for industrial items or trade transactions.

4.2 Account and Transaction Activity Risk Indicators

The transaction is carried out by or sent to a person or an entity ordinarily resident of or domiciled in a country of proliferation or diversion concern, such as DPRK and Iran;
Transactions that involve items controlled under dual-use or export control regimes;
Accounts or transactions involve possible companies with ownership structures that are not transparent, front companies, or shell companies;
There are long periods of account dormancy followed by a surge of activity;
The transaction reveals that the representatives of companies exchanging goods have definitive links, such as the same owners or management, physical address, IP address or telephone number, or they have co-ordinated their activities;
Account holder conducts financial transaction(s) circuitously;
Account activity or transactions involve associated financial institutions domiciled in a country with weak implementation of relevant UNSCR obligations and FATF Standards, or a weak export control regime (particularly relevant to correspondent banking services);
Institutions' accounts receive sudden influxes of cash deposits followed by cash withdrawals;
Transactions are made based on ledger17 arrangements that prevent the need for frequent international financial transactions; and/or
A personal account is used to purchase industrial items either under export control or unrelated to corporate activities or similar lines of business.

4.3 Trade Finance Risk Indicators

Certain individuals and entities associated with DPRK are subject to asset freeze;18
A customer requests a letter of credit prior to approval of the account for use in a trade transaction for shipment of dual-use goods or goods subject to export control;
Inconsistencies in information contained in trade documents and financial flows, such as names, addresses, and final destination;
A freight forwarding firm is listed as the product's final destination on trade documents; and/or
Wire instructions or payments from or due to entities not identified on the original letter of credit or other documentation.

5. Complex Proliferation Financing and Sanctions Evasion Schemes

5.1 The FATF's 2025 Report and its Relevance to The Bahamas

In June 2025, the FATF published Complex Proliferation Financing and Sanctions Evasion Schemes (the FATF Complex PF Report). The report draws on case studies and risk-assessment findings from across the FATF Global Network to describe how proliferation networks currently raise, move and use funds, and acquire controlled goods. It identifies four principal typologies: (i) the use of intermediaries in third countries; (ii) the obscuring of beneficial ownership to gain access to the financial system; (iii) the use of virtual assets and other technologies; and (iv) the exploitation of the maritime and shipping sectors. It also records that global implementation of Recommendation 7 remains weak, with 13 percent of assessed countries compliant and 46 percent partially or non-compliant as at April 2025. It further highlighted that effectiveness in implementing proliferation-related targeted financial sanctions is low across the Global Network.

[17] 17Ledger arrangements are conducted by linked companies who maintain a record of transactions made on each other's behalf. The linked companies will sometimes make transfers to balance the accounts in question.

[18] 18Individuals and entities listed in Annex I and II of the UNSCR 2087 (2013) OP 5(a), UNSCR 2094 (2013) OP 8, UNSCR 2270 (2016) OP 10, UNSCR 2321 (2016) OP3, UNSCR 2371 (2017) OP 18, and UNSCR 2375 (2017) OP 3, are subject to the asset freeze imposed in OP 8(d) of UNSCR 1718 (2006).

The report is relevant to The Bahamas for three reasons. First, the vulnerabilities it describes at the national level, including the attractiveness of international financial centres, the presence of free trade zones, the widespread use of United States dollar accounts, a significant ship registry and a regulated digital asset sector, are features of this jurisdiction. Second, the sectors it identifies as most exposed (banking, trust and company services, insurance, virtual asset service providers and dealers in precious metals and stones) are all supervised by GFSR members. Third, the report's risk indicators update those in section 4 of these Guidelines, which were drawn from the FATF's 2021 guidance.

The GFSR's own assessment, reflected in these Guidelines and in the national and sectoral risk assessments, is that the proliferation financing threat to The Bahamas is low. The report does not change that assessment. It does show that proliferation networks deliberately seek out jurisdictions and firms that regard themselves as remote from the threat, and that a low inherent threat is not a reason to apply weak controls.

5.2 The Current Threat Picture

The report's assessment of the principal threat actors is summarised below. Regulated persons should use it to inform the threat element of their proliferation financing risk assessment.

Actor	Summary of the FATF's findings	Status under Recommendation 7
DPRK	The most significant proliferation financing threat. The DPRK continues to test intercontinental ballistic missiles and has diversified its revenue generation: cyber theft from virtual asset businesses (including the theft of approximately USD 1.5 billion from the ByBit exchange in February 2025), overseas information technology workers using false identities, the misuse of insurance and reinsurance, illicit trade in coal, wigs and false eyelashes, wildlife and other goods, and the use of overseas bankers and front companies. No additions have been made to the UN DPRK list in almost a decade and the 1718 Panel of Experts was dissolved in 2024. The DPRK-Russia Comprehensive Strategic Partnership Treaty, in force since late 2024, has increased the DPRK's financial connectivity.	Subject to UN sanctions (resolution 1718 (2006) and successors). Within Recommendation 7.
Iran	Iran uses militarised proxies, transnational criminal networks, exchange houses, gold traders and front companies in financial centres to raise and move funds and to procure dual-use goods for missile, drone and weapons programmes. At the time of the report Iran was outside Recommendation 7; the report describes it as a threat identified by many countries through national sanctions regimes.	Since 27 September 2025, subject to re-applied UN sanctions (resolution 1737 (2006) and successors). Within Recommendation 7. See section 6.1.1.

Actor	Summary of the FATF's findings	Status under Recommendation 7
Russian Federation	Not subject to UN proliferation sanctions. Many countries view Russia as a proliferation financing threat by extension, because of its economic and military cooperation with the DPRK and its procurement of dual-use goods through intermediaries in third countries in circumvention of national and supranational sanctions.	Outside Recommendation 7. In The Bahamas, measures apply only to the extent given effect by Orders or Directions under the IOEAMA.
Non-state actors	Terrorist groups and criminal organisations seeking chemical, biological or nuclear capability. Few financial-system cases, but potential impact is severe. Addressed by resolution 1540 (2004), which operates separately from Recommendation 7.	Outside Recommendation 7; relevant to the broader risk assessment.

5.3 Scope: United Nations Measures and Other Sanctions Regimes

The FATF Complex PF Report deliberately covers evasion of national and supranational sanctions regimes as well as the UN measures that Recommendation 7 requires, because the methods used are the same and because many countries assess proliferation financing risk through a wider lens. The report states that this broader framing does not create new obligations and does not redefine Recommendation 7.

The same distinction applies in The Bahamas. The legal obligation to freeze the funds or assets of designated individuals and entities without delay, and to refrain from providing funds or financial services to them, arises from the UN measures as given effect by the ATA and the IOEAMA, and from any Order or Direction made under the IOEAMA in respect of another regime. Regulated persons are not required by Bahamian law to implement the sanctions lists of other countries, such as those of the United States Office of Foreign Assets Control, the United Kingdom or the European Union. Many regulated persons nevertheless screen against those lists in accordance with correspondent banking requirements, group policy, contractual terms or their own risk appetite. The GFSR, therefore, regards that as sound practice for any regulated person with United States dollar clearing, foreign correspondent relationships or a group presence in those jurisdictions. Where a regulated person does so, the GFSR requires the policy to be documented, applied consistently and explained to customers, and expects the regulated person to understand that a decision to exit or decline a relationship on that basis is a commercial decision rather than a statutory freeze. The typologies and indicators in this section are relevant whichever regime applies.

5.4 The Four Typologies

5.4.1 Enlisting intermediaries to evade sanctions

Procurement networks conceal the real end-user of goods and funds by interposing layers of intermediaries: front and shell companies in third countries, trading houses, freight forwarders, financial facilitators and chains of bank accounts, often in jurisdictions that do not apply the relevant sanctions or whose free trade zones permit repackaging and re-export. Goods are routed through several ports or countries under false end-user certificates and bills of lading. Lawyers, accountants and company formation agents are used to build the structures. Payments are routed through multiple financial institutions across several countries so that no single institution sees the whole picture. The report's case studies include front companies in China funnelling United States-origin electronic components to IRGC-linked entities, European intermediaries re-exporting machine tools and composite materials to Iran, and shipping companies selling oil for a sanctioned entity through an intermediary that prepared the contracts.

Where this touches The Bahamas

Corporate and trust service providers that form or administer companies for non-resident clients in trading, logistics, electronics, chemicals or industrial equipment, especially where the client's counterparties are in known transhipment hubs.

Banks and securities firms providing accounts, custody, trade finance or payment services to such companies, and correspondent relationships with respondent banks in countries of diversion concern.

Businesses operating in or through the Freeport free trade zone, where goods may be received, repackaged and re-exported.

What to look for: a corporate client whose stated business is generic trading or consulting but whose payments relate to controlled or high-specification goods; counterparties that change name or jurisdiction between order and payment; payment routes that pass through several countries with no commercial logic; freight forwarders or customs brokers named as the consignee or end-user; a business that is fully export-oriented and appears to add no value (a pass-through entity); the same beneficial owner, address, telephone number or email domain behind several apparently unrelated companies.

5.4.2 Obscuring beneficial ownership to access the financial system

Because targeted financial sanctions attach to designated persons and to the funds they own or control, designated persons rely on third parties to hold assets and operate accounts: foreign nationals who lend their names to front companies, diplomats and their family members, overseas bankers operating covert branches, and networks of subsidiaries and nominee shareholders. The report describes DPRK state banks establishing correspondent accounts in a third country through a cut-out bank, more than 250 front companies used to clear United States dollar payments for the DPRK's Foreign Trade Bank, the spouse of a DPRK diplomat using insurance companies to collect and move funds for a UN-designated insurer, unlicensed trust and company service providers in Europe fragmenting their services across several legal entities to avoid supervision, and the transfer of a sanctioned person's shareholding to an associate in order to unfreeze shares.

Where this touches The Bahamas Any regulated person that relies on a customer's self-declaration of beneficial ownership without verification, or that treats a professional intermediary's assurance as sufficient. Insurers and reinsurers: the DPRK has used insurance and reinsurance contracts, including fraudulent claims on state infrastructure, to generate foreign currency. Insurance and reinsurance for the DPRK is prohibited by resolution 2270 (2016). Financial and corporate service providers, trust companies and law and accountancy practices that provide registered office, nominee, director or company secretarial services. Issuers and acquirers of payment cards and providers of digital wallets, which the DPRK has exploited to move value.

What to look for: a change in beneficial ownership or directorship shortly before or after a designation; a beneficial owner who is a national of, or resident in, a country of proliferation concern but who holds the interest through a third-country national; an insurance or reinsurance arrangement involving state infrastructure in a country of concern; a professional intermediary who declines to identify the client; accounts operated by a diplomat or diplomatic mission showing commercial rather than official activity; related companies that share an address, a formation agent and a bank but have no visible connection to each other.

5.4.3 Using virtual assets and other technologies

Virtual assets are used both to raise and to move proliferation funds. The DPRK's cyber units have stolen billions of dollars from virtual asset exchanges, wallets and decentralised finance protocols, then laundered the proceeds through mixers, anonymity-enhancing cryptocurrencies, chain-hopping, overthe-counter brokers and exchanges in jurisdictions with weak controls. DPRK information technology workers obtain remote employment with foreign companies under false or borrowed identities, are paid in fiat or virtual assets, and remit the proceeds to the state. Sanctioned actors also use virtual assets to settle trade with intermediaries in third countries, and are exploring alternative payment channels outside the main correspondent banking system. The report notes that three quarters of assessed jurisdictions were non-compliant or only partially compliant with Recommendation 15 as at April 2024, so that an unregulated or weakly regulated VASP somewhere in the chain is common.

Where this touches The Bahamas Digital asset businesses registered under the DARE Act: exchanges, custodians, brokers, staking and token issuance businesses, and their relationships with foreign VASPs and unhosted wallets.

Any regulated person whose customers include technology companies or staffing platforms that engage remote contractors, or that pay contractors in virtual assets. Banks and payment service providers that provide fiat on-ramp and off-ramp services to digital asset businesses.

What to look for: deposits traceable to a known exchange hack or to a mixing service; a customer who requests payment in virtual assets to avoid identification; transfers to or from VASPs in countries with weak controls or to decentralised exchanges without due diligence; a pattern of newly created wallet addresses receiving funds from an address associated with a sanctioned exchange; virtual asset addresses that match identifiers published by the United Nations or other competent authorities; a corporate customer in the information technology sector paying numerous overseas freelancers whose identity documents are inconsistent with their stated location or whose IP address does not match; an individual who refuses video verification or who presents identity documents that do not match the person seen.

5.4.4 Exploiting the maritime and shipping sectors

The maritime sector is used to move sanctioned commodities, principally oil and coal, and to generate revenue that can contribute to proliferation financing. The report describes four deceptive shipping practices: physically or administratively altering a vessel's identity (repainting names, using false flags, tampering with the IMO number, frequent re-flagging through open registries); ship-to-ship transfers at sea to disguise the origin of cargo; disabling or manipulating the Automatic Identification System so that voyages cannot be tracked; and falsifying bills of lading, certificates of origin and other documents. The vessels involved, often described as the shadow fleet, are typically old, owned through single-ship companies in several jurisdictions, and insured, if at all, by unknown or newly formed insurers.

Where this touches The Bahamas

The Bahamas operates one of the largest ship registries in the world. Although the registry is administered by the Bahamas Maritime Authority rather than a GFSR member, the owning companies, their bank accounts, their insurers and their corporate administrators are frequently regulated persons.

Financial and corporate service providers that form single-ship owning companies and act as registered agent.

Banks that finance vessels or process charter hire, bunkering and freight payments, and insurers that write hull, protection and indemnity or cargo cover.

What to look for: a customer that acquires a vessel for no apparent commercial purpose; frequent changes of flag, name or ownership of a vessel; a vessel whose AIS record shows gaps in areas associated with ship-to-ship transfers; discrepancies between the cargo, route and value described in commercial, transport and financial documents; a declared cargo value that is low compared with freight costs; a freight forwarder or charterer named as the end-user; payments for a vessel transaction originating from or destined to a party unconnected with the documents; a vessel or owning company appearing on advisories issued by the United Nations, the International Maritime Organization or other competent authorities.

5.5 Vulnerabilities to Consider in the Proliferation Financing Risk Assessment

The report describes the vulnerabilities that proliferation networks seek out at national and sectoral level. Regulated persons should consider whether and how each applies to their own business when assessing inherent risk:

Vulnerability identified by the FATF	Questions for the regulated person
International financial centres offering a wide range of products to a diverse, largely non-resident customer base	What proportion of customers are non-resident legal persons or arrangements? How many have beneficial owners or counterparties in, or trade with, countries of proliferation or diversion concern?
Widespread use of United States dollar accounts and correspondent relationships	Which correspondent and respondent relationships carry exposure to higher-risk jurisdictions? What do the correspondent banks require, and is the firm's screening calibrated to meet it?
Free trade zones that allow repackaging and re-export	Does the firm serve businesses operating in the Freeport free trade zone or similar zones abroad? Does it understand what those businesses import and export?
Corporate and trust services that can be used to build layered structures	Does the firm verify beneficial ownership independently for every structure it forms or administers? Does it know the business of each company and who its counterparties are?
Virtual asset service providers, and weak VASP regulation elsewhere	Which foreign VASPs does the firm deal with? Are they licensed and supervised? Does the firm use blockchain analytics and screen wallet addresses?
Insurance and reinsurance	Does the firm write or place cover for assets, infrastructure or cargo in or connected to countries of concern? Are reinsurance counterparties and intermediaries screened?
Maritime: ship registries, vessel finance, marine insurance	Does the firm own, finance, insure, administer or bank vessels or ship-owning companies? Does it monitor vessel identity, flag history and AIS behaviour?

Vulnerability identified by the FATF	Questions for the regulated person
Dealers in precious metals and stones, and other high-value goods	Does the firm deal in gold or diamonds, or bank customers that do, with counterparties in regions associated with DPRK trade?
Low awareness of proliferation financing obligations among DNFBPs	Do staff understand that proliferation financing obligations apply to the firm? When were they last trained?

5.6 Detection and Reporting: Good Practices

The FATF found that countries rely heavily on suspicious transaction reports and sanctions screening to detect proliferation financing, and that the private sector regards customer due diligence, risk assessment, screening, ongoing monitoring, training and adverse media screening as the most effective controls. The following practices are drawn from the report and from the experience of GFSR members:

Screen against the right data. The UN Consolidated List, as given effect in The Bahamas, is the minimum. Screening should also cover vessels and IMO numbers, aircraft, virtual asset addresses and other identifiers published by the United Nations and by the competent authorities of The Bahamas, and the adverse-media and enforcement-action sources that reveal the networks behind listed persons. Regulated persons that screen against the lists of other jurisdictions, such as those of the United States, the United Kingdom and the European Union, should do so on the documented basis described in section 5.3; those lists frequently identify the front companies, vessels and facilitators behind UN-listed persons well before any UN action.
Calibrate for false positives without losing true matches. Name matching on dated identifiers produces many false positives. Resolving them through enhanced due diligence, company registry and beneficial ownership checks and corroboration against other data is better than raising the match threshold. Keep an audit trail of every decision that a potential match is a false positive and the identifiers relied on.
Test the screening system. Confirm how and when list updates reach the screening engine, test fuzzy-matching settings against known name variants, and have the testing done by someone independent of the person who set the parameters. Where a third-party tool or an intermediary's screening is relied on, understand what it covers and keep evidence that it has been checked; reliance is not a substitute for the regulated person's own responsibility.
Look beyond the name. Listed persons rarely appear by name in transactions. Use the identifiers in the "Other information" field of a listing, adverse-media and enforcement-action sources and, where the business warrants it, data analytics to find associates, shared addresses, common directors and transactional links to designated persons.
In trade finance, ask for the export licence. Where a transaction involves dual-use or exportcontrolled goods, or a destination or transhipment point of concern, obtain the export licence or official confirmation that none is required rather than assuming the customer has checked.
Use the indicators. Annex A sets out the FATF's updated indicators, grouped by customer, transaction and trade activity. Regulated persons should select those relevant to their products and customers, build them into onboarding, monitoring and investigation procedures, and record why a given alert was or was not escalated.
Report clearly. Where a suspicious transaction report concerns possible proliferation financing or sanctions evasion, say so in the report, identify the resolution or list concerned, and include the trade, shipping and ownership documents that support the suspicion. A report that describes only unusual activity, without the proliferation context, is of limited use to the FIU and to the competent authorities who must act on it.
Share within the group and with the authorities. Group-wide policies should ensure that information about a sanctions match or a suspicion in one entity is available to the compliance function of the others, within the limits of the law. The GFSR members and the FIU will continue to provide feedback and typologies to industry through their established channels.

6. Counter Proliferation Financing: Regulatory and Legal Framework

The Bahamas has established a robust legal and regulatory framework to combat proliferation financing and maintains close collaboration with international partners to implement and enhance its measures. This framework aligns with international standards, largely drawn from the United Nations and the FATF.

6.1 International Standards, Obligations and Sanctions Regimes

The Bahamas, as a United Nations member, has adopted several international instruments concerning CPF, including United Nations Security Council Resolutions and the FATF Recommendations as outlined in subsections 6.1.1 and 6.1.2, respectively.

6.1.1 United Nations Security Council Resolutions

The UNSC is tasked with the mission of identifying threats to and maintaining global peace and security. To achieve this mission, the UNSC may, in certain cases, employ measures like sanctions and other prohibitions through its UNSCRs on various jurisdictions. The primary UNSCRs pertinent to proliferation financing are UNSCR 1540, UNSCR 1718 and UNSCR 1737, together with their successor resolutions. UNSCR 2231 (2015) remains in force, but its provisions terminating the measures under UNSCR 1737 and its successors ceased to apply on 27 September 2025, as explained below.

Global Approach: UNSCR 1540 and its Successor Resolutions

UNSCR 1540 establishes comprehensive global measures for CPF. It prohibits engagement in any form of assistance to non-state actors,19 which includes proliferators and terrorists, who aim to develop, acquire, manufacture, possess, transport, finance, transfer, or use nuclear, chemical or biological weapons and their means of delivery. Notably, this resolution does not require jurisdictions to freeze the assets of specific individuals or entities; instead, it focuses on regulating activities rather than imposing sanctions. Additionally, UNSCR 1540 mandates:

Jurisdictions must establish and enforce robust laws and regulations that criminalize the possession and acquisition of WMDs, related materials, and their means of delivery.
Implementation of domestic controls over nuclear, chemical, or biological weapons and their means of delivery.
Jurisdictions are expected to uphold their commitments to CPF through multilateral agreements and cooperation.

Country-specific Approach: UNSCR 1718 and UNSCR 1737 and their Successor Resolutions

The UNSC has issued sanctions resolutions aimed at addressing proliferation activities in specific jurisdictions, namely the DPRK (UNSCR 1718 (2006) and successor resolutions) and Iran (UNSCR 1737 (2006) and successor resolutions 1747 (2007), 1803 (2008) and 1929 (2010), re-applied with effect from 27 September 2025 through the mechanism in UNSCR 2231 (2015)). These resolutions require jurisdictions to freeze without delay the funds and other assets of designated individuals and entities and of persons acting on their behalf or entities owned or controlled by them, and contain further vigilance and prohibition measures addressed to financial institutions. The imposition of TFS related to PF, as outlined in these resolutions, forms the basis for FATF Recommendation 7 and its interpretive note.

Re-application of the United Nations measures on Iran (2025)

Resolution 2231 (2015) endorsed the JCPOA and terminated the Security Council's earlier measures on Iran. It also provided, in paragraphs 11 and 12, that if a JCPOA participant notified the Council of significant non-performance by Iran and the Council did not within 30 days adopt a resolution continuing the termination, all of the earlier measures would re-apply as they stood before 20 July 2015. France, Germany and the United Kingdom gave that notification on 28 August 2025. No resolution continuing the termination was adopted. The measures therefore re-applied at 8:00 pm Eastern Daylight Time on 27 September 2025.20

The re-applied measures are those of resolutions 1696 (2006), 1737 (2006), 1747 (2007), 1803 (2008), 1835 (2008) and 1929 (2010). They include the asset freeze on designated individuals and entities, an arms-related embargo, restrictions on proliferation-sensitive nuclear and ballistic missile activity, travel

[19] 19"Non-state actors" are individuals or entities, not acting under the lawful authority of any State in conducting activities, which come within the scope of UNSCR 1540. See Security Council Resolution 1540.

[20] 20United Nations, Note to Correspondents, 28 September 2025; Security Council Committee established pursuant to resolution 1737 (2006), Notice: 43 individuals and 78 entities added back to the 1737 Sanctions List. The re-established list is reproduced in summary form in Annex B.

restrictions and a series of vigilance and prohibition measures directed at financial institutions. Resolution 2231 (2015) itself remains in force, but its provisions terminating the earlier measures, and the list of persons it had maintained for asset-freeze purposes, no longer operate.

Key dates

Date	Event
20 July 2015	Security Council adopted resolution 2231 (2015) endorsing the JCPOA; the measures under resolutions 1737 to 1929 were terminated subject to the re-application mechanism in paragraphs 11 and 12
21 August 2018	GFSR issued the Guidance Note on Proliferation and Proliferation Financing
18 October 2023	Under the JCPOA timetable, the remaining UN asset-freeze designations under resolution 2231 lapsed. From this point the FATF treated Iran-related TFS as outside Recommendation 7
20 June 2025	FATF published Complex Proliferation Financing and Sanctions Evasion Schemes
8 July 2025	FATF published Comprehensive Update on Terrorist Financing Risks
25 July 2025	GFSR published the first edition of these Guidelines
28 August 2025	France, Germany and the United Kingdom notified the Security Council of significant non-performance by Iran, starting the 30-day re-application process
September 2025	Draft resolutions that would have continued the termination of the measures, or deferred re-application, were not adopted
27 September 2025 (8:00 pm EDT); 28 September 2025 UTC	Measures under resolutions 1696, 1737, 1747, 1803, 1835 and 1929 re-applied. The 1737 Committee and the 1737 Sanctions List re-established: 43 individuals and 78 entities re-added to the UN Security Council Consolidated List
29 October 2025	FATF confirmed that the re-applied resolutions fall within Recommendation 7 and updated references in the Standards and Methodology
14 October 2026	House of Assembly passed the Anti-Terrorism (Amendment) Bill, 2026
October 2026	GFSR members issued the Iran snapback Notice to all regulated persons and published it on their respective websites
October 2026	GFSR published this revised edition of the Guidelines

The re-established 1737 Sanctions List

The 1737 Committee has been re-established and its sanctions list reinstated as it stood on 20 July 2015, with the identifying information current to the Committee's last amendments in December 2014. The list comprises 43 individuals and 78 entities; a summary is reproduced in Annex B. Listing dates range from December 2006 to December 2012. Regulated persons should note the following features of the list, which affect screening:

Individuals are principally officials and scientists associated with the Atomic Energy Organization of Iran, the Ministry of Defence and Armed Forces Logistics, the Aerospace Industries Organization and the IRGC, including senior IRGC commanders. Many entries carry several name variants of differing quality and limited identifiers (no date of birth, place of birth or passport number).
Entities include defence-industrial groups and their subordinates (for example the Shahid Hemmat and Shahid Bagheri Industrial Groups), nuclear fuel-cycle companies, procurement front companies, two banks (Bank Sepah and Bank Sepah International; First East Export Bank), shipping companies connected to the Islamic Republic of Iran Shipping Lines (Irano Hind Shipping Company, IRISL Benelux NV, South Shipping Line Iran) and an air cargo carrier (Yas Air). Several entries record that the entity is a cover name, successor or renamed form of another listed entity.
Dated identifiers. As the identifying information is more than a decade old, addresses, directors, corporate names and ownership may have changed. Screening that relies on exact-name matching against stale identifiers is unlikely to be effective. Regulated persons should apply the ownership-and-control analysis described in section 6.3 and should treat the "Other information" field of each entry as a source of linked names.

The list is published by the United Nations as part of the Consolidated List and is available in the usual machine-readable formats. Commercial screening providers incorporated the re-established entries in late September and October 2025; regulated persons that rely on such providers should have confirmed that the update was applied to their screening engine and should retain evidence of that confirmation.

Effect on the FATF Standards and on the definition of proliferation financing risk

Recommendation 7 requires countries to implement targeted financial sanctions to comply with Security Council resolutions relating to the prevention, suppression and disruption of proliferation of weapons of mass destruction and its financing. Between October 2023 and September 2025, the only such resolutions in effect were those on the DPRK, and the FATF Complex PF Report, written in that period, describes the DPRK as the sole UN-sanctioned country for the purposes of Recommendation 7. That is no longer the case. On 29 October 2025 the FATF stated that Recommendation 7 covers all current Security Council resolutions applying proliferation-related targeted financial sanctions, that the re-applied Iran resolutions therefore apply under the FATF Standards and Methodology, and that reference updates were made to the Standards and Methodology accordingly.

Two consequences follow for regulated persons. First, proliferation financing risk now includes the Iran regime: under Recommendation 1, proliferation financing risk means the risk of breach, non-implementation or evasion of the targeted financial sanctions referred to in Recommendation 7, and Iran-related TFS are again within that definition. A proliferation financing risk assessment that treats Iran as outside scope, or that was last refreshed before September 2025, is out of date and should be revised (see section 6.3). Second, the implementation of Iran-related TFS is subject to supervisory testing and to assessment in The Bahamas' mutual evaluation; regulated persons should be able to demonstrate that they screened their customer base against the re-established list without delay, froze any assets identified and reported as required.

The FATF continues to identify Iran as a high-risk jurisdiction subject to a call for action, with countermeasures. That identification is separate from the UN measures and is addressed in the GFSR members' existing guidance on high-risk jurisdictions. Both apply.

Measures beyond the asset freeze

The re-applied resolutions contain measures addressed to financial institutions that go beyond freezing the assets of listed persons. Regulated persons, and in particular banks, trust companies, insurers and securities firms with cross-border business, should be familiar with them:

Prohibition on making funds available. Resolution 1737 (2006), paragraph 12, requires that no funds, financial assets or economic resources be made available, directly or indirectly, to or for the benefit of listed persons, or of persons acting on their behalf or at their direction, or of entities owned or controlled by them. Exemptions for basic expenses, extraordinary expenses and certain prior contractual obligations are available only through notification to, or approval by, the 1737 Committee (paragraphs 13 to 15). In The Bahamas any such request is routed through the Attorney General and the National Coordinator; regulated persons must not release frozen funds on their own authority.
Vigilance over named Iranian banks. Resolution 1803 (2008), paragraph 10, calls on States to exercise vigilance over the activities of financial institutions in their territories with all banks domiciled in Iran, in particular Bank Melli and Bank Saderat and their branches and subsidiaries abroad, to avoid such activities contributing to proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems.
Financial services, insurance and correspondent relationships. Resolution 1929 (2010), paragraphs 21 to 24, calls on States to prevent the provision of financial services, including insurance and reinsurance, and the transfer of financial or other assets or resources, where there are reasonable grounds to believe that they could contribute to Iran's proliferation-sensitive nuclear activities or delivery-system development; to prohibit the opening of new branches, subsidiaries or representative offices of Iranian banks, and new joint ventures, ownership interests or correspondent relationships with Iranian banks, where there are reasonable grounds to believe that they could contribute to those activities; and to prohibit financial institutions from opening representative offices, subsidiaries or bank accounts in Iran on the same basis.
Shipping and cargo. Resolution 1929 (2010) also calls for vigilance in dealings with entities incorporated in Iran or subject to Iran's jurisdiction, including those of the IRGC and the Islamic Republic of Iran Shipping Lines, and for inspection of cargo to and from Iran where there are

reasonable grounds to believe it contains prohibited items. Regulated persons that finance, insure, register or administer vessels or trade should treat Iran-linked shipping as a higher-risk activity requiring enhanced due diligence.

These vigilance measures are implemented in The Bahamas through the risk-based obligations of the FTRA and the sectoral rules and guidelines of each GFSR member. Where a regulated person identifies a business relationship or transaction of the kind described, it should apply enhanced due diligence, obtain senior management approval to continue, and consider whether a suspicious transaction report is warranted.

A contested re-application and reduced United Nations monitoring

Regulated persons will be aware from public reporting that the re-application is disputed by some members of the Security Council, who maintain that all measures on Iran terminated on 19 October 2025, and that the 1737 Committee has been unable to agree a chair, adopt reports, update the list or re-appoint its Panel of Experts. The position in The Bahamas is not affected by that dispute. The re-applied measures are recorded by the United Nations Secretariat in the Consolidated List and are given immediate effect under the ATA and the IOEAMA. Regulated persons are to implement them in full.

The practical consequence of the Committee's difficulties is that the United Nations is not currently adding new Iran-related designations or publishing expert monitoring of evasion, just as the dissolution of the 1718 Panel of Experts in 2024 removed the principal public source on DPRK evasion. Regulated persons therefore need to rely more heavily on their own analysis of ownership and control, on open-source and adverse-media screening, on the typologies in section 5 and on information shared by the competent authorities.

6.1.2 Financial Action Task Force

The FATF employs a methodology for assessing technical compliance21 with its recommendations and the effectiveness of AML/CFT/CPF systems. During mutual evaluations, the methodology includes minimal rating areas for CPF measures. The specific FATF recommendations that pertain to CPF measures are as follows:

Recommendation 1

This recommendation requires countries and private sector entities to identify, assess, understand, and mitigate their proliferation financing risks concerning potential breaches, non-implementation, or evasion of TFS obligations referred to in Recommendation 7. In the context of R.1, proliferation financing risk refers strictly and only to the potential breach, non-implementation or evasion of the TFS obligations referred to in Recommendation 7.

The source of proliferation financing risks would depend upon a number of factors as follows:

a. Risk of a potential breach or non-implementation of TFS: This risk may materialize when designated entities and individuals access financial services, and/or funds or other assets, as a

[21] 21Technical compliance refers to the implementation of the specific requirements of the FATF Recommendations, and the existence, powers and procedures of competent authorities.

result, for example, of delay in communication of designations at the national level, lack of clear obligations on private sector entities, failure on the part of private sector entities to adopt adequate policies and procedures to address their proliferation financing risks (e.g. weak customer onboarding procedures and ongoing monitoring processes, lack of staff training, ineffective risk management procedures, lack of a proper sanctions screening system or irregular or inflexible screening procedures, and a general lack of compliance culture).

b. Risk of evasion of TFS: This risk may materialize due to concerted efforts of designated persons and entities to circumvent TFS (e.g. by using shell or front companies, joint ventures, dummy accounts, middlemen and other fraudulent/sham intermediaries).

These assessments may be conducted as part of broader NRAs, or more specific stand-alone assessments. It should also be noted that a risk assessment to understand the potential risk of breach, nonimplementation or evasion of PF-TFS, which is a process to be determined by the relevant country and private sector firms, may not necessarily require an entirely distinct or new methodological process, compared to how they have undertaken ML or TF risk assessments. It does not require a stand-alone risk assessment if pre-existing risk assessment methodologies are adequate to incorporate PF risks.

Recommendation 2

Countries are required to establish effective national cooperation and, when appropriate, coordination mechanisms to combat the financing of proliferation of WMDs.

Recommendation 7

This recommendation obliges countries to implement PF-related TFS in accordance with UNSCRs.

In addition, the FATF assesses effectiveness based on 11 Immediate Outcomes, but only two of these outcomes specifically focus on CPF measures.

Overall Objective of PF Effectiveness Assessment: Financial systems and the broader economy are protected from the threats of the financing of proliferation.

Immediate Outcome (IO)	Description
IO-1 22	Money laundering and terrorist financing risks are understood and, where appropriate, actions coordinated domestically to combat money laundering and the financing of terrorism and proliferation.
IO-11	Persons and entities involved in the proliferation of WMDs are prevented from raising, moving and using funds, consistent with the relevant UNSCRs.

The FATF has released several guidance reports regarding the countering of proliferation financing:

[22] 22Updated in 2020 to include proliferation financing.

The FATF's Proliferation Financing Typologies Report23 assesses the threat of PF and identifies key issues and challenges in mitigating PF, including legal systems, public and private sector awareness, preventive measures, and investigation and prosecution.
The FATF's Report24 on Combating Proliferation Financing, which incorporates the UNSCRs on PF, focuses on policy development, and provides a blueprint for regulators and stakeholders in adopting policies to mitigate PF.
The FATF Guidance on Counter Proliferation Financing25, which provides guidance on the implementation of financial provisions of the UNSCRs to counter the proliferation of Weapons of Mass Destruction.
The FATF published its Guidance on Proliferation Financing Risk Assessment and Mitigation26 , which aims to assist jurisdictions with preparing PF risk assessments.
In June 2025 the FATF published Complex Proliferation Financing and Sanctions Evasion Schemes, which updates the 2018 and 2021 guidance with current typologies, vulnerabilities, risk indicators and best practices. Its content is reflected in section 5 and Annex A of these Guidelines.
In July 2025 the FATF also published its Comprehensive Update on Terrorist Financing Risks. 27 That report is concerned with terrorist financing and is addressed through the GFSR members' counterterrorist financing guidance. It is noted here because two of its findings bear on proliferation financing: state sponsorship of terrorism is reported to be coupled with sanctions-circumvention techniques, including trade-based methods, that are indistinguishable from the typologies in section 5, and the exchange houses, hawala networks and front companies used by Iran's proxies are the same conduits described in the FATF Complex PF Report; and its analysis of virtual assets, online platforms, e-money and the exploitation of natural resources describes channels that the DPRK also uses for revenue generation. Regulated persons should read the two reports together when assessing the threat element of their risk assessments.

Key Elements of FATF PF Recommendations

Objective: This table summarizes the key elements in the guidance publications listed above.

Element	Description
Legal Frameworks	The FATF recommends that a jurisdiction's PF legal framework should take into consideration provisions for the criminalization of proliferation financing, asset forfeiture, financial investigations for proceeds and instrumentalities of proliferation financing, international cooperation, and export control systems.

[23] 232008, FATF Proliferation Financing Typologies Report.

[24] 242010, FATF Report on Combating Proliferation Financing.

[25] 252018, FATF Guidance on Counter Proliferation Financing.

[26] 262021, Guidance on Proliferation Financing Risk Assessment and Mitigation.

[27] 27FATF (2025), Comprehensive Update on Terrorist Financing Risks, FATF, Paris.

Element	Description
UNSCRs	The FATF encourages jurisdictions to adhere to relevant UNSCRs related to proliferation financing and TFS. It is suggested that jurisdictions implement UNSCRs 1540, 1718, 1737, 2231, and successor resolutions.

6.2 Domestic Obligations

To address domestic PF risks and challenges, competent authorities aided with the preparation of national legislation and policies that align with international CPF standards, recommendations, and obligations. This section provides an overview of the national CPF framework. Additionally, each financial services regulator has developed a framework specific to their sub-sectors, as outlined in the sectoral guidance.

Anti-Terrorism Act 2018 (ATA)

The ATA, along with subsequent amendments and regulations, establishes The Bahamas' framework that criminalizes terrorism, TF, proliferation of WMD, and PF. It also provides the necessary powers for the detection, prevention, prosecution, conviction, and punishment for such crimes.

Reporting Requirements

The ATA also mandates the implementation of the UNSCRs and designates the National Identified Risk Framework Coordinator as the person responsible for:

Maintaining the list of designated entities; and
Receiving and distributing UNSCRs to relevant authorities and industry participants.

According to the ATA, once financial institutions receive the list of designated entities,28 the financial institution must immediately review their records and systems to determine whether the designated entity is connected by way of business. If so, the financial institution is mandated to immediately:

Freeze all funds held in the designated entity's name, without prior notice to the designated entity; and
Inform the FIU, the Office of the Attorney General, its regulator and other relevant competent authorities of its findings, including any attempted transaction.

However, if a financial institution suspects that accounts are held in the name of a person suspected to be a designated entity, they are required to report this to the FIU. Non-compliance with reporting requirements may result in penalties, including fines and/or imprisonment.

Anti-Terrorism (Amendment) Act, 2026

The Anti-Terrorism (Amendment) Act, 2026 was passed by the House of Assembly on 14 October 2026 and subsequently by the Senate, and has been enacted. The Act closes a gap between The Bahamas'

[28] 28The term "designated entities" means individuals or entities and their associates designated as terrorist entities by the Security Council of the United Nations.

international commitments and the text of the Anti-Terrorism Act 2018, so that the Act captures designations made under resolution 1737 (2006), resolution 2231 (2015) and future Security Council resolutions imposing proliferation-related targeted financial sanctions, and so that the Act follows the United Nations regime as it evolves without the need for further primary legislation on each occasion. The amendments apply retrospectively from 2 August 2019, giving legal certainty to freezing and reporting actions taken in good faith since that date; they do not create offences for past conduct.29

The Act confirms and clarifies the obligations described in these Guidelines in relation to the re-applied Iran measures, which also arise under the IOEAMA. The procedures in section 6.3 are unchanged by the Act. References in these Guidelines to the ATA are to the Anti-Terrorism Act 2018 as amended by the Anti-Terrorism (Amendment) Act, 2026.

Financial Transaction Reporting Act 2018 (FTRA)

The FTRA, along with subsequent amendments and regulations, offers financial institutions and DNFBPs the legislative framework needed to address identified risks,30 including proliferation financing. The table below outlines the key requirements of the FTRA.

Summary of FTRA Requirements for Financial Institutions and DNFBPs

Requirements	Description
Risk Assessments	Financial institutions and DNFBPs must conduct a periodic risk assessment that identifies and assesses identified risks in aim to understand and mitigate the risks. This should be conducted, at a minimum, before the launch of a new product or developing technologies and when there is a major event in the management or operation of the firm.
Customer Due Diligence (CDD)	Financial institutions and DNFBPs must ensure that CDD is conducted before opening an account and entering into a correspondent relationship, and on an ongoing basis. These measures include the identification of beneficial owners.
Enhanced Due Diligence (EDD)	Financial institutions and DNFBPs must apply EDD measures in cases where a prospective customer or other business arrangement is connected with a high-risk jurisdiction.
Record Keeping	Financial institutions and DNFBPs must maintain all books and records of customers and transactions for a time period prescribed by law (no less than five years).

[29] 29Anti-Terrorism (Amendment) Act, 2026; debate in the House of Assembly, 14 October 2026, as reported in The Nassau Guardian and The Tribune, 15 October 2026.

[30] 30As defined in Glossary.

Requirements	Description
Suspicious Transactions	Financial institutions and DNFBPs must report suspicious activities to the FIU via a suspicious transaction report (STR).
Internal Controls	Financial institutions and DNFBPs must prepare and implement policies and procedures to prevent activities of identified risks. This includes the designation of a compliance officer (CO).

Suspicious Transaction Reporting

The FTRA outlines the procedures for reporting suspicious transactions and provides protection to those who report them:

The GFSR's registrants, licensees, and supervised institutions can file STRs on the FIU's electronic filing platform "CaseKonnect".31 All STRs, along with relevant supporting documentation, are completed, filed, and submitted by registered Money Laundering Reporting Officers (MLROs).
Information that should be included in the STR are names, addresses, social security numbers, birth dates, driver's license or passport numbers, occupations, and phone numbers of all parties involved.
It is important to disclose enough information to indicate the nature and reason for the suspicion.

For more information, visit the website, and address your concerns and applications to the Director of the FIU.

Proceeds of Crime Act 2018 (POCA)

The POCA, along with subsequent amendments and regulations, sets out the legislative framework for recovering proceeds from criminal activities and addressing identified risks, including proliferation financing. This Act establishes the Ministerial Council,32 the National Identified Risk Framework Coordinator, and the IRF Steering Committee. It also empowers law enforcement agencies, the Customs Department, and the Courts of The Bahamas in dealing with identified risks, including the ability to search, seize, and confiscate proceeds of crime associated with these activities.

Customs Management Act 2011

This Act provides for the control of exports and imports of goods that may be used for the development or acquisition of WMD or their delivery systems. It requires individuals or entities planning to export or import such controlled goods to obtain a license, which may come with specific conditions and restrictions aimed at preventing the proliferation of WMDs. Authorities are empowered to seize and detain any goods suspected of being intended for WMD development or acquisition, including their delivery systems.

[31] 31Available at https://fiuconnect.fiubahamas.bs/casekonnect/index.php?module=users/login.

[32] 32Has the responsibility of determining identified risks and make recommendations to update the Identified Risk Framework.

As mentioned earlier, import and export controls are crucial elements of CPF measures, particularly concerning dual-use goods. In The Bahamas, the Customs Department, as mandated by the Customs Management Act, bears the responsibility for:

Monitoring trade activities;
Interdicting and confiscating contraband; and
Protecting the nation's overall well-being and security by enforcing import and export restrictions and prohibitions.

The List of Prohibited and Restricted Imports and Exports is a valuable resource for identifying goods that may pose a high risk in the context of CPF.33

International Obligations (Economic and Ancillary Measures) Act 1993

This Act outlines the process for imposing economic sanctions and introduces ancillary measures to align with The Bahamas' international commitments. When the UNSC passes a resolution to impose sanctions on a specific person, entity, or jurisdiction, amendments or orders may be formulated to ensure that the UNSCR becomes fully enforceable in The Bahamas.34 The Minister of Foreign Affairs is responsible for the administration and enforcement of this Act.

UNSCRs are periodically transmitted to the individual tasked with maintaining the list of designated entities, which is the National Identified Risk Framework Coordinator. According to the Act, the Governor-General of The Bahamas is granted authority to put into effect orders or regulations aimed at limiting or prohibiting individuals or entities listed on the sanctions roster of the UNSC. The Governor-General also holds the power to issue directives for the seizure, freezing, or confiscation of property located in The Bahamas and held on behalf of such individuals and entities. Orders and Directions pertaining to sanctions have been enforced against individuals and entities associated with the Government of the Russian Federation, Al-Qaida, and ISIL, among others. These include:

International Obligations (Economic and Ancillary Measures) (United States of America) (Unilateral Sanctions) Directions 2022;
International Obligations (Economic and Ancillary Measures) (Democratic Republic of Korea) (Order) 2019;
International Obligations (Economic and Ancillary Measures) (Iran) Order 2019;
International Obligations (Economic and Ancillary Measures) (Iraq) (Order) 2018; and
International Obligations (Economic and Ancillary Measures) (Afghanistan) (Order) 2018.

This Act requires Bahamian authorities and financial institutions to promptly freeze the funds, financial assets, and/or economic resources of individuals or entities listed in these Orders and Directions. The

[33] 33List available at https://www.bahamascustoms.gov.bs/imports-and-exports/prohibited-and-restricted-imports-and-exports/.

[34] 34Information retrieved from Doing Business in The Bahamas: Overview.

International Obligations (Economic and Ancillary Measures) (Iran) Order 2019 continues in force and gives effect to the measures re-applied on 27 September 2025.

6.3 Implementing the Re-applied Iran Measures: Expectations of the GFSR

The Bahamas gives effect to the Security Council's proliferation-related measures principally through the ATA and the IOEAMA, described in section 6.2. The National Coordinator circulated the United Nations notice of 28 September 2025 to the competent authorities, and GFSR members issued the Iran snapback Notice to their regulated persons, in accordance with the GFSR Targeted Financial Sanctions Reporting Forms, and published it on their respective websites. This revised edition supersedes any earlier communication from a GFSR member to the extent that it described resolution 2231 (2015), or the Iranrelated measures generally, as no longer operative.

Communication of United Nations sanctions-list changes

GFSR members notify their regulated persons without delay of any additions, amendments and removals to the United Nations sanctions lists, using established notification channels, including direct communication and website publication. Regulated persons are responsible for monitoring relevant sanctions-list changes themselves, screening promptly and freezing applicable assets without delay; they should not await notification from their regulator before acting on an applicable designation.

Reporting and expectations

Section 44 of the ATA requires a financial institution that holds funds of a designated entity to freeze those funds without delay and to report to the FIU and the Attorney General. The GFSR additionally requires every regulated person to report a positive match to its regulator on Form A of the GFSR Targeted Financial Sanctions Reporting Forms without delay, and to file the Annual Declaration (Form D) within 90 days after the calendar year-end. Nil returns are not required on individual list updates, although a GFSR member may call for a specific declaration return on a particular designation. In light of the re-application and of the typologies in section 5, the GFSR expects every regulated person to:

1. Retrospective screening. Screen the entire customer base, including beneficial owners, controllers, authorised signatories, counterparties to pending transactions and, for insurers, policyholders, beneficiaries and claimants, against the re-established 1737 Sanctions List. Where this was done in September or October 2025, retain the evidence. Where it was not, it should be conducted without delay, and any match reported to the regulator on Form A. Any regulated person that has not completed this screening is expected to do so within 30 days of the date of this revised edition. This 30-day period does not defer the existing obligations to screen, freeze and report without delay.

2. Ownership and control. Extend screening beyond name matches to entities owned or controlled by listed persons, and to persons acting on their behalf or at their direction, as resolution 1737 (2006) requires. Where ownership of 50 percent or more, or control by other means, is identified, the entity is to be treated as if it were listed.

3. Fuzzy matching and aliases. Configure screening to capture transliteration variants, the alternative spellings recorded in each entry, former names and the related names in the "Other information" field. Document the calibration decisions.

4. Freeze and report. Where a match is confirmed, freeze without delay and report to the FIU, the Attorney General and the regulator (Form A). File a suspicious transaction report through the FIU's CaseKonnect platform where the circumstances warrant it, identifying proliferation financing as the ground of suspicion.

5. No new business. Decline to establish a business relationship or carry out an occasional transaction for a listed person, an entity owned or controlled by a listed person, or a person acting on their behalf.

6. Ongoing screening. Screen new customers at onboarding, existing customers on each list update and periodically on a risk basis, and transactions in real time where the business model requires it (wire transfers, securities settlements, digital asset transfers).

7. Risk assessment, policies and training. Within six months of the date of this revised edition, review and update the proliferation financing risk assessment to reflect the inclusion of the Iran regime within Recommendation 7, the threat picture and typologies in section 5 and the vulnerabilities in section 5.5; update sanctions and proliferation financing policies and procedures, screening configuration and transaction monitoring rules; and deliver training to relevant staff, directors and senior management. The risk assessment update may be made within the existing enterprise-wide or self-risk assessment framework; a stand-alone document is not required.

8. Exemptions, delisting and unfreezing. Refer any request to release frozen funds, or to make a payment to a listed person under a prior contract, to the Attorney General through the regulator. Do not act until the 1737 Committee's position has been confirmed. Where a person is removed from a list, or a match proves to have been a case of mistaken identity, unfreeze promptly on confirmation from the Attorney General or the regulator and record the basis for doing so.

9. Governance. Assign responsibility for sanctions and proliferation financing compliance to a person of sufficient seniority, ensure that the board or senior management approves the relevant policies and receives regular reporting on screening results, matches, frozen assets and backlogs, and include sanctions and proliferation financing controls in the scope of compliance testing and internal audit.

10. Risk rating. Do not rate a customer, counterparty or jurisdiction as low risk where there is a connection to a country subject to United Nations proliferation-related sanctions; such connections warrant enhanced due diligence.

11. No circumvention. Do not participate in, or structure arrangements whose object or effect is, the circumvention of a freeze or prohibition, including by transferring an interest to an associate or by routing a payment through a third party.

GFSR members will test compliance with these expectations through their off-site and on-site supervisory programmes. Failure to freeze or report as required by the ATA is an offence; failures of policy, procedure or risk assessment may attract administrative penalties under the FTRA and the sectoral legislation described in section 7.

7. Sectoral Guidance

7.1 Central Bank of The Bahamas

The Central Bank of The Bahamas (the Central Bank) was established under the Central Bank of The Bahamas Act 1974, now superseded by the Central Bank of The Bahamas Act 2020 (CBBA). Pursuant to the CBBA, the Central Bank is entrusted with several key functions, including:

Promoting stable monetary, credit and balance of payment conditions in order to safeguard the exchange rate regime and facilitate orderly and balanced economic growth;
Contributing to the stability of The Bahamas' financial system by collaborating with domestic and foreign regulatory authorities;
Regulating and supervising financial institutions; and
Regulating and overseeing the issuance, provision and operation of payment instruments, whether they involve opening an account or not, which encompasses activities like issuing electronic money and other forms of stored value.

As part of its mandate, the Central Bank is tasked with the licensing, registration, regulation, and supervision of various financial institutions, including banks, trust companies, co-operative credit unions, non-bank money transmission service providers and their agents, and payment service providers. The Central Bank's oversight of these entities falls under the regulatory frameworks provided by the Banks and Trust Companies Regulation Act 2020 (BTCRA), the Bahamas Co-operative Credit Unions Act 2015,35 and the Payment Instruments (Oversight) Regulations 2017.

All sectors that fall under the regulatory oversight of the Central Bank are required to adhere to the Central Bank's Guidelines on the Prevention of Money Laundering & Countering the Financing of Terrorism and Proliferation Financing (the AML/CFT/CPF Guidelines),36 which were last revised 4 May 2026. These AML/CFT/CPF Guidelines provide guidance to supervised financial institutions regarding internal controls, customer onboarding, ongoing monitoring, and record-keeping, as mandated by relevant legislation, including:

Proceeds of Crime Act 2018 (POCA);
Financial Transactions Reporting Act 2018 (FTRA); and

[35] 35Including accompanying Regulations.

[36] 36Available at https://www.centralbankbahamas.com/bank-supervision/aml-cft-cpf-sfi-guidance-notes/guidelines-for-licensees-on-the-prevention-of-money-laundering-countering-the-financing-of-terrorism-and-proliferation-financing.

Anti-Terrorism Act 2018 (ATA).

The Central Bank assesses compliance with these guidelines by conducting both off-site supervision and on-site examinations of supervised financial institutions, taking enforcement actions when necessary.

7.1.1 CPF Requirements

The entities under the Central Bank's regulation must comply with various laws, policies, and guidance that cover AML/CFT/CPF provisions. This sub-section provides a detailed breakdown of the requirements mandated by the Central Bank.

Onboarding Requirements for Prospective SFIs

In accordance with the Guidelines for License Application37 and the Banks and Trust Companies (Licence Application) Regulations, 2002 (as amended), SFIs must undergo a compliance due diligence verification process when applying for a license. To support the application, SFIs are required to provide at least the following:

Due diligence documents to verify the identities of shareholders, directors, and officers;
Information regarding supervisory functions, internal controls, risk management, and AML/CFT/CPF policies and procedures; and
Details of any outsourcing agreements, if applicable.

Additionally, all SFIs are mandated to appoint a CO and the MLRO. The appointment of the MLRO must be approved by the Central Bank and registered with the FIU.

Verification of Customer Identity

Pursuant to the AML/CFT/CPF Guidelines (see also Section IV of AML/CFT/CPF guidelines), every SFI must undertake customer due diligence measures when initiating a business relationship with a facility holder or opening an account for them.

To fulfil these obligations, every SFI is required to:

Verify the facility holder's identity using reliable, independent source documents, data or information; and
Verify the identity of any person purporting to act on behalf of the facility holder and ensure that such a person is duly authorized for that role.

If an SFI cannot comply with the relevant CDD requirements or encounters circumstances in which it is not satisfied that the transaction it is or may be involved in is legitimate, the SFI:

Must refrain from opening the account or establishing the business relationship;
Must refrain from conducting the transaction;
Must terminate the business relationship; and

[37] 37Available at https://cdn.centralbankbahamas.com/download/023515700.pdf.

Should consider filing an STR with the FIU.

An SFI that intentionally opens an account, establishes a business relationship, carries out a transaction, or neglects to terminate a business relationship without meeting the requirements outlined in Sections 5 to 9 and 14 of the FTRA commits an offence. Upon summary conviction, the responsible individuals may face penalties, including a fine of up to $500,000, imprisonment for two years, or both. Legal entities could potentially be subject to a fine of up to $1,000,000.38

Monitoring of Business Relationships

SFIs must strictly adhere to the AML/CFT/CPF Guidelines when it comes to the ongoing monitoring of business relationships.

Once the initial identification procedures are successfully completed and the customer relationship is established, SFIs should maintain vigilance by monitoring the conduct of the relationship or account. The purpose of this monitoring is to ensure that the activities align with the business' stated nature when the relationship or account was initially established.

SFIs are tasked with implementing systems and controls for the ongoing monitoring of relevant account activities. The extent of this monitoring will vary based on the specific nature of the business. Accounts and customer relationships deemed higher risk will necessitate more comprehensive and frequent monitoring. This approach enables SFIs to stay alert and identify any noteworthy changes or transactions that deviate from the originally stated account purpose. Some potential areas of focus for monitoring include:

Transaction type;
Frequency;
Amount;
Geographical origin/destination; and
Account signatories.

Internal Controls, Policies and Procedures

SFIs must establish clear roles and responsibilities to ensure that their policies, procedures, and controls, which are designed to deter criminals from using their services for ML/TF/PF, are not only put into practice but also consistently maintained and updated. This is crucial to ensure that SFIs fulfill their obligations as per AML/CFT/CPF laws and meet the requirements outlined in the AML/CFT/CPF Guidelines. These requirements include, but are not limited to:

Verifying customer identities;
Assessing customer risk levels;
Monitoring ongoing relationships and transactions;

[38] 38See section 11 of the FTRA.

Adapting to new products, practices, and technological advancements;
Adhering to sanctions in line with the relevant UNSCRs;
Appointing a CO and MLRO;
Reporting suspicious transactions;
Upholding "know your employee" standards and expectations; and
Implementing internal controls in a group of affiliated entities.

In addition, SFIs are expected to perform a self-risk assessment that encompasses an evaluation of their inherent ML/TF/PF risks, the control mechanisms in place to mitigate those risks, and the implementation of supplementary measures to manage residual risks where necessary. The Central Bank expects risk assessments to include the following:

Clear risk assessment methodology;
Defined risk appetite and risk tolerance;
Identification and evaluation of inherent risks;
Identification and assessment of control measures;
Development of corrective action plans, where applicable; and
Evaluation of residual risk.

SFIs are required to monitor and update their risk assessments on an ongoing basis.

SFIs should utilize the ML/TF/PF Risk Assessment Guidance Notes39 to identify and rectify gaps within their risk assessment frameworks using a proportionate and risk-based approach.

Record Keeping

Sections 15, 16 and 17 of the FTRA mandate that SFIs maintain records related to customer identification and transactions. These records serve as crucial evidence in investigation into money laundering or terrorist financing, particularly when individuals involved employ intricate transaction networks designed to obscure the audit trail.

The records kept by SFIs about their customer relationships and transactions should meet the following criteria:

Full compliance with legal requirements;
Accessibility for competent third parties to assess the SFIs adherence to AML/CFT/CPF policies and procedures;
The ability for the SFI to meet court orders and inquiries from relevant authorities;

[39] 39Available at https://www.centralbankbahamas.com/viewPDF/documents/2023-08-25-18-03-33-MLTFPF-Risk-Assessment-Guidance-Notes-June-2023-Header-Update.pdf.

The capacity to reconstruct any wire transactions conducted through the SFI, with comprehensive information on both the payer and payee, including identity verification documentation; and
A mandatory retention period of five years from the execution of the transfer for all relevant information, as stipulated by the originating financial institution.

Retention Period and Record Format

To facilitate the verification of an individual's identity, SFIs must maintain records that allow for easy identification of the evidence used for this verification by the FIU. These records encompass identity verification for facility holders and beneficial owners, as well as account files, business correspondence, and the outcomes of any analysis conducted. It is mandatory for SFIs to retain these records for a minimum of five years, starting from the date when an individual no longer holds facility status.

In keeping with best practices, the point at which an individual ceases to be a facility holder is determined by the following criteria:

The completion of a one-off transaction or the final transaction in a series, or
The termination of a business relationship, which includes the closure of the account(s).

In cases where formal steps to conclude a business relationship have not been taken, but a period of five years has passed since the date of the last transaction, investigation, or prosecution of any offense, the five-year retention period commences from the date of the final transaction.

These records must be stored in an accessible and convertible format, such as original documents, microfiche, or computer disks. This storage method should also remain in compliance with the FTRA 2018 and the Evidence Act 1996 to ensure admissibility of computerized evidence.

Education and Training

In line with the AML/CFT/CPF Guidelines and the Financial Intelligence (Transactions Reporting) Regulations 2001, SFIs are obligated to establish ongoing AML/CFT/CPF training programs. They must provide suitable training to relevant employees, directors, and officers at least once per year. This training is crucial to maintain their awareness of:

All AML/CFT/CPF policies and procedures, which includes aspects like identification, record keeping, the recognition and handling of unusual or suspicious transactions, as well as internal reporting; and
Relevant AML/CFT/CPF legislation and supervisory guidance notes that apply to their responsibilities.

Enforcement Matters

Pursuant to section 57 of the FTRA, the Central Bank has power to levy Administrative Monetary Penalties (AMPs) against SFIs or individuals, including employees, directors or senior managers of an SFI. These penalties are primarily intended to uphold high standards of regulatory conduct by deterring any contraventions of the FTRA or other relevant AML/CFT/CPF laws. In cases involving SFIs, the Central Bank can impose penalties of up to $200,000, while individuals may face penalties of up to $50,000.00.

The Central Bank's schedule of penalties is set out in the Administrative Monetary Penalties for Supervised Financial Institutions under The Bahamas' Anti-Money Laundering and Terrorist Financing Regime. 40 It provides a summary of circumstances warranting penalties and the corresponding monetary amounts.

In addition, it is important to note that offences under the POCA may result in prison sentences ranging from seven to twenty years upon summary conviction (see section 15 of the POCA).

Complex proliferation financing and sanctions evasion: points for supervised financial institutions

Supervised financial institutions should pay particular attention to correspondent banking exposure to jurisdictions of diversion concern, to trade finance and open-account trade payments, to vessel and cargo finance, and to fiat services provided to digital asset businesses. The Central Bank expects the vigilance measures of resolutions 1803 (2008) and 1929 (2010) described in section 6.1.1 to be reflected in correspondent banking due diligence and in the institution's policy on relationships with banks domiciled in Iran. The Central Bank's AML/CFT/CPF Guidelines and its ML/TF/PF Risk Assessment Guidance Notes continue to apply.

7.2 Securities Commission of The Bahamas

Established in 1995 by the Securities Board Act41, the Securities Commission of The Bahamas (SCB) is a financial services regulator committed to developing a growing, vibrant, competitive financial services sector. The SCB is given broad powers under its legal and regulatory framework to promote fairness and integrity in The Bahamas' capital markets. It also supervises and regulates the securities and capital markets, investment funds and investment fund administrators, digital asset businesses and activities, carbon credit trading, and financial and corporate service providers. Accordingly, participants in any of the aforementioned are required to be licensed or registered under at least one administered legislation. The legislative framework that supports the SCB in its duties includes, but is not limited to:

The Securities Industry Act 2024 and The Securities Industry Regulations 2012;
The Investment Funds Act 2019, Investment Funds Regulations 2020 (and the associated amendments thereto), and the Investment Condominium Act 2014;
The Financial and Corporate Service Providers Act 2020 and The Financial and Corporate Service Providers (General) Regulations 2020;
Digital Assets and Registered Exchanges Act 2024; and
The Carbon Credit Trading Act 2022.

A summary of the broad powers of the SCB include, among others:

Regulating and governing the capital markets, securities and investment fund businesses, digital asset businesses, and carbon credit exchanges, etc.;

[40] 40Available at https://www.centralbankbahamas.com/viewPDF/documents/2021-02-05-12-17-45-AMP-Guidance-Note-revised-Nov.-2020.pdf.

[41] 41Repealed and replaced by the Securities Industry Act 1999 and later the Securities Industry Act 2011 and Securities Industry Act 2024.

Entering the premises of registrants and licensees to conduct examinations or inspections;
Taking enforcement action against any person for failing to comply with applicable laws;
Granting, refusing to grant, or revoking licenses and registrations;
Making recommendations regarding regulations to the Minister of Finance;
Implementing rules to supplement the regulatory framework, as necessary; and
Doing all things and taking all actions which may be necessary or expedient or which are incidental to the discharge of any function of power of the SCB.

In addition to requiring registrants and licensees to follow national AML/CFT/CPF requirements, the SCB also provides sector-level Rules that encompass CPF provisions, namely:

The Securities Industry (Anti Money Laundering and Countering the Financing of Terrorism) Rules 2015;
The Financial and Corporate Service Providers Act (Anti Money Laundering and Countering the Financing of Terrorism) Rules 2019; and
The Digital Assets and Registered Exchanges (Anti-Money Laundering, Countering Financing of Terrorism and Countering Financing of Proliferation) Rules 2022.

These Rules provide targeted provisions for sector stakeholders and in some cases may be stricter than those at the national level, previously outlined in section 6 of these Guidelines.

7.2.1 CPF Requirements

The sectors regulated by the SCB are guided by a wide array of legislation, policies, and guidance that encompass AML/CFT/CPF provisions, including legislation enacted at the national level and sector level. Elements of the legislation that strengthen the SCB's CPF framework include onboarding requirements, ongoing requirements, examination procedures, and enforcement-related matters.

Onboarding Requirements

During the SCB's registration process, prospective registrants/licensees are subject to a background check that encompasses CPF measures, which may include revision of:

KYC documents on all official Directors and Officers;
Supervisory functions, internal controls, risk management, and AML/CFT/CPF policies and procedures; and
Outsourcing agreements, if applicable.

Additionally, all registrants and licensees are mandated to appoint both a CO and MLRO and register them with the SCB.

Ongoing Requirements

The SCB administers the FTRA for all its registrants and licensees; meaning, it ensures that all its registrants and licensees adhere to the provisions of the FTRA. This includes adherence to all CPF provisions.

Additionally, as previously mentioned, SCB requires all registrants and licensees to adhere to the provisions of applicable sector-level AML/CFT/CPF Rules. Common ongoing requirements expected by the SCB are:

• Due Diligence Requirements. Registrants and licensees are required to implement CDD
measures, which applies to its risk-rating framework. At a minimum, firms are to ensure that all customers are appropriately identified and sufficient information and documentation is obtained.
A customer's identity must be verified prior to customer onboarding and prior to an occasional transaction involving a cash amount over the threshold allowed under the Financial Transactions Reporting (Wire Transfer) Regulations. To assist with verifying customers, the registrant or licensee may collect either:
– Original documents;
– Certified copies of documents where submission of original documents is impractical or impossible; – Independent and reliable source documents, data or other information (whether or not electronically sourced) which sufficiently verifies a customer's identity; or – Photographed or scanned copies of identifying documents provided that the registrant has adequate internationally recognized tools to verify the authenticity of the documents. It is also required that registrants and licensees implement EDD measures for high-risk customers, business relationships, and transactions. Once the verification procedures are concluded and a relationship has been established, it is required that the registrant or licensee continue to:
– Monitor the conduct of the business relationship periodically; and – Ensure, on an ongoing basis, that the business relationship is consistent with the risk profile and nature of the business stated when the relationship was established.
As it relates specifically to PF risks, the SCB requires registrants and licensees to prohibit customer relationships of persons and entities that are present on various sanctions lists prepared by the UNSC. Periodically, the SCB receives UNSCR declarations from the National Identified Risk Framework Coordinator that outlines a list of persons or entities that should be prohibited from conducting business in The Bahamas. These declarations are then sent to registrants and

licensees, and it is expected that these are completed and submitted to the SCB within the timeline stipulated. If a registrant or licensee finds that the prohibited person or entity is an existing customer or involved in business relationships, it is expected that this be made known on the declaration and that the relationship is immediately severed. The re-established 1737 Sanctions List was transmitted in this way.

Risk Framework. Registrants and licensees are required to approve and implement a risk rating framework that assesses various components of the business, including the risk profile of:
- Every customer;
- Its dealings in each jurisdiction/country that it operates;
- Its own business practices, products, services, transactions, and delivery channels;
- Non face-to-face business relationships, including the nature and extent of risks involved; and
- The nature and extent of risks related to its business activities that allow customers to receive payments from unknown or unconnected third parties.

Additionally, registrants and licensees are required to perform a self-risk assessment to evaluate its own risk for vulnerability to breaches of the FTRA, the POCA, and the ATA. It is expected that this risk assessment be conducted:

Prior to the launch of a new or existing product or business practice;
Prior to the use of new, existing, or developing technologies; and
Where the registrant/licensee is a part of a group, when there is a major event or development in the management or operation of the group.
Internal Controls. Registrants and licensees are required to implement internal control policies and procedures that constitute an AML risk-based approach to monitoring facilities. This includes an overall risk management framework for the prevention, detection, and disclosure of identified risks associated with ML, TF, and PF. It is expected that these internal controls be updated, as necessary, on an ongoing basis. It is also expected that each registrant and licensee implement a compliance program with a registered CO and MLRO that will assist the firm with maintaining its mandated compliance functions. This compliance program must also include policies and procedures in relation to suspicious transaction reporting.
Record Keeping. Registrants and licensees are required to maintain records and documents in relation to customers and business relationships for a period of seven years from the date that the customer ceases to be a facility holder. The types of record maintained must enable:
- Competent third parties to assess the registrant's compliance with AML/CFT/CPF policies and procedures;
- Transactions effected through the registrant to be reconstructed;
The registrant/licensee to satisfy court orders or enquiries from the SCB or appropriate authorities; and
The identification of customers.
Education and Training. Registrants and licensees are required to ensure that all employees are adequately trained, on an ongoing basis, on:
- The policies and procedures put in place to detect and prevent ML, TF, and PF, including those for the identification, record keeping, detection of unusual and suspicious transactions and internal reporting; and
- The AML/CFT/CPF legislative framework.

Note: This section presents a summary of requirements. For full scope of requirements, please review:

The Securities Industry (Anti Money Laundering and Countering the Financing of Terrorism) Rules 2015;
The Financial and Corporate Service Providers Act (Anti Money Laundering and Countering the Financing of Terrorism) Rules 2019; and
The Digital Assets and Registered Exchanges (Anti-Money Laundering, Countering Financing of Terrorism and Countering Financing of Proliferation) Rules 2022.

Examination Procedures

One of the powers imparted to the SCB via its legal and regulatory framework is the power to conduct examinations. Examinations typically involve inspecting a registrant or licensee's business practices, internal controls, and overall compliance with applicable legislation, including AML/CFT/CPF requirements. There are, broadly, three main types of inspections:

Types of Examinations

Examination Type	Brief Explanation
1. Routine Examinations	On-site or off-site examinations, where the frequency is based on the registrant's or licensee's assessed level of risk. Areas inspected include AML/CFT/CPF procedures, business conduct, solvency analysis, compliance with registration requirements, et al.
2. For Cause Examinations	Inspections conducted with reason, outside of the normal course of the SCB's examination cycle. Credible information on improper conduct provided to the SCB may create a situation where an inspection of a licensee or registrant's premises and business operations is urgently required. This may include potential AML/CFT/CPF infractions.

Examination Type	Brief Explanation
3. Thematic Examinations	Inspections conducted to determine a registrant or licensee's compliance in a particular area of interest for SCB. They are differentiated from for cause examinations in that thematic examinations are typically not a result of credible information concerning dubious behavior. Instead, they represent an opportunity for SCB to gather additional information regarding its licensees' ability to comply with standards of best practice in a particular area, both locally and internationally.

Examination Type

Brief Explanation

3. Thematic Examinations

Inspections conducted to determine a registrant or licensee's compliance in a particular area of interest for SCB. They are differentiated from for cause examinations in that thematic examinations are typically not a result of credible information concerning dubious behavior. Instead, they represent an opportunity for SCB to gather additional information regarding its licensees' ability to comply with standards of best practice in a particular area, both locally and internationally.

In cases where there are violations of relevant legislation found during the course of the examination, the registrant or licensee may receive fines, license suspension/revocation, or other enforcement consequences commensurate with the nature of the violation.

AML/CFT/CPF Testing

The examination of licensees and registrants provides the opportunity to gain reasonable assurance of compliance with relevant AML/CFT/CPF legislation. Many of the areas reviewed by SCB during the course of an examination are AML/CFT/CPF focused and may include, among others:

Performing reviews to determine whether a risk management framework has been implemented in accordance with the FTRA 2018, in addition to an AML risk-based approach to monitoring facilities;
Review of the processes, policies, and procedures surrounding the handling of client complaints;
Ensuring the CO and MLRO for the organization are registered with SCB and FIU, as mandated;
Reviewing AML/CFT/CPF policies and procedures;
Reviewing the customer onboarding process for the organization, as well as ensuring ongoing monitoring is conducted, and appropriate up-to-date documentation is retained;
Random sampling and testing of CDD and customer risk ratings, and review of the procedures surrounding the customer risk rating determination process;
Testing whether employees of the organization are regularly trained in recognition of ML/TF/PF, and evaluating whether staff are appropriately qualified and experienced for the level of their responsibility within the organization;
Performing reviews to determine whether the registrant maintains adequate supervisory personnel appropriate to the nature and size of the firm;
Ensuring policies and procedures regarding STRs are implemented, and that employees are aware to whom they should be reported;
Testing a sample of transactions conducted by the organization, and reviewing its policies and procedures surrounding large transactions;
Reviewing policies and procedures surrounding the investigation and reporting of any potential suspicious activities to the FIU via the submission of an STR by the CO/MLRO;
Reviewing the autonomy of the role of the MLRO within the organization to determine whether the MLRO has sufficient seniority within the organization, and evaluating the level of independence of the MLRO such that the MLRO's assessment of any transaction may not be compromised by senior management of the entity;
Obtaining a list of jurisdictions with which the registrant or licensee does business, and relevant declaration letters to corroborate compliance with sanctions lists;
Testing record keeping procedures to gain reasonable assurance that registrants and licensees are maintaining records (including discontinued files due to closed customer relationships) in compliance with legislative requirements; and
Reviewing policies and procedures surrounding politically exposed persons (PEPs).

Enforcement Matters

SCB requires all of its registrants and licensees to comply with both the FTRA and the POCA. Penalties against both include imprisonment or fines, and the SCB has the right to further impose administrative breaches up to $200,000 for entities in breach, or in the case of an individual, up to $50,000. The SCB may also impose a monetary penalty or otherwise require another form of sanction and/or remediation if it considers the infraction warrants it. The schedule of administrative penalties may be found on the SCB's website.42

Complex proliferation financing and sanctions evasion: points for SCB registrants and licensees

Three parts of the SCB's population are directly engaged by the typologies in section 5. Financial and corporate service providers are engaged by the intermediary and beneficial-ownership typologies (sections 5.4.1 and 5.4.2) and should apply the beneficial ownership verification and business-understanding requirements of the Financial and Corporate Service Providers Act 2020 and the FTRA with the specific question of sanctions evasion in mind, including for single-ship owning companies (section 5.4.4). Digital asset businesses are engaged by the virtual assets typology (section 5.4.3) and should ensure that wallet screening, blockchain analytics, Travel Rule compliance and counterparty VASP due diligence are capable of detecting the DPRK patterns described, consistent with the SCB's Travel Rule Compliance Guidance. Securities firms and fund administrators should ensure that screening covers investors, beneficial owners, underlying assets where relevant and settlement counterparties, and that custody arrangements do not permit a listed person to retain control of frozen securities.

7.3 Insurance Commission of The Bahamas

The Insurance Commission of The Bahamas (ICB) is the regulatory body responsible for overseeing and enforcing insurance laws and regulations in The Bahamas. Its mandate is to protect policyholders and ensure the solvency of insurance companies operating in and through The Bahamas. The ICB is primarily

[42] 42Available at www.scb.gov.bs.

governed by the Insurance Act 2010, which provides for the regulation and supervision of insurance companies and intermediaries. The Act sets out the licensing requirements for insurers, the standards they must meet and the penalties for non-compliance.

The ICB's powers include:

Licensing and registration of insurers and intermediaries: the ICB is responsible for granting and renewing licenses to insurers and intermediaries that meet the regulatory requirements.
Supervision and monitoring of insurers and intermediaries: the ICB has the power to monitor the activities and financial performance of insurers and intermediaries to ensure compliance with regulatory requirements.
Enforcement of insurance laws and regulations: the ICB has the power to investigate and take enforcement action against insurers and intermediaries that violate insurance laws and regulations.
Establishment of prudential and conduct standards: the ICB has the power to establish prudential and conduct standards for insurers and intermediaries, such as capital requirements, reserve levels, and customer protection measures.
Approval of insurance products and services: the ICB has the power to approve insurance products and services to ensure they comply with regulatory requirements.
Collaboration with international regulatory bodies: the ICB collaborates with international regulatory bodies to ensure that the industry in The Bahamas meets international best practices and standards.

In addition to its regulatory responsibilities, the ICB also has a role in the country's AML/CFT/CPF, including the FTRA, the POCA, and the ATA. The AML/CFT/CPF framework is outlined in the ICB's Anti-Money Laundering/Countering the Financing of Terrorism/Prevention of Financial Crimes Guidelines for Insurance Companies (ICB AML Guidelines).43 The ICB AML Guidelines provide guidance on how to comply with AML/CFT/CPF laws and regulations. The ICB supervises life insurance companies through a combination of on-site and off-site examinations, education, training, and awareness programs. In addition, periodic notices and guidelines are issued to supplement the ICB's AML Guidelines.

Onboarding Requirements

The ICB supervises all licensees of the insurance industry and routinely assesses compliance with AML/CFT/CPF laws. The assessment includes:

CDD to identify and verify the identity of customers, their beneficial owners, and any politically exposed persons (PEPs);

[43] 43Available at https://insurancecommissionbahamas.com/wp-content/uploads/2019/10/AML-CFT-PF-Guidelines-for-Insurance-Companies-Sept-2018-1.pdf.

Assessing and documenting the risk of money laundering, terrorist financing, proliferation financing and other financial crimes associated with the customer and the proposed business relationship;
Establishing and verifying the identity of intermediaries, such as agents and brokers, involved in the business relationship.

Ongoing Requirements

Licensees must ensure that there are procedures/practices in place for the five operational areas of an insurer's activities, particularly:

Verifying/identifying of customers;
Maintaining customer verification and transaction records;
Reporting suspicious transactions to the FIU;
Assigning a CO and MLRO; and
Reviewing internal procedures for training personnel on ML/TF/PF detection and prevention as required.

Verifying Details and Documentary Evidence Procedures

Licensees of the ICB have a general duty to verify the identity of those with whom they do business. Financial institutions and DNFBPs must verify that they are dealing with a legitimate person (natural, corporate or legal). When possible, the prospective customer should be interviewed personally.

Life insurance companies should verify identity in the following circumstances:

Existing Facility Holders. All existing facility holders of record who are above the established threshold must verify the identity of their customers. Where doubt arises in relation to any facility holder during the business relationship, a verification of the facility holder must be done.
New Facility Holders. Before establishing a new facility, all persons authorized to operate the facility must be verified. Also, before someone new is added as a facility holder to an existing facility, that person must be verified.
Certain occasional transactions exceeding $15,000. Individuals who seek to conduct a transaction with a life insurance company via existing facilities involving cash exceeding $15,000 (an occasional transaction) and the transactor is not a customer in relation to any financial intermediary services provided by the insurance company or is conducting the transaction on behalf of someone who is not.
- Where a person, who cannot be regarded as a facility holder, seeks to conduct an occasional transaction in relation to any facility, that person must be verified before such transaction is permitted.
- Where a person, who is also not a customer in relation to the subject facility seeks to conduct an occasional transaction (cash) on behalf of another who is also not a facility

holder of the firm. In addition to the transactor being verified the person on whose behalf he is acting must also be verified.

Where a customer facility holder seeks to use his own facility, which is provided by the life insurance company to conduct occasional transactions on behalf of others (most commonly the case for intermediaries such as attorneys) must be verified.
Where structuring44 of an occasional transaction is suspected to be taking place.

Obligations where Unable to Complete CDD

Where the insurance company is unable to complete the CDD/KYC verification procedures, it must not commence a business relationship or perform the transaction, or must suspend or terminate the business relationship until sufficient information can be obtained. The company should consider filing an STR concerning the customer.

Tipping Off

Where an insurance company becomes suspicious of ML/TF/PF activities while conducting CDD, they should consider the risk of tipping off. If, when performing CDD, there is a reasonable belief that the customer may be tipped off during the process, the insurance company may elect to not pursue the CDD process. A STR should still be filed. Insurance companies should ensure that their employees are made aware of these issues.

Documentary Evidence

There must be sufficient documentary evidence to establish the identity of the client/customer on record, as part of the due diligence process. This is for every facility or occasional transaction that has been verified for low, medium, or high-risk customers. Regulations 3, 4, and 5 of the Financial Transactions Reporting Regulations 2018 (FTRR) provide a list of mandatory documentation and information to verify identity, as well as additional information that may be used to further establish the identity of a person that must be verified. Determining any additional information that may be required for high-risk customers should be documented in the company's enhanced due diligence procedures for high-risk customers.

Verification Information for Individuals

The following evidence must be on record for every facility or occasional transaction that must be verified:

Full and correct name;
Permanent address;
Date and place of birth;
Purpose of the facility;

[44] 44Structuring transactions as a means of avoiding having to provide verification evidence is a practice known in money laundering scheme. Structuring is also referred to as "linked" transactions or "smurfing" and present special challenges for verification prior to the transaction being conducted.

Potential activity involving the facility; and
Written confirmation that all credits to the facility are and will be beneficially owned by the facility holder, except in the case of a facility that will be an intermediary facility. Verification of beneficial owner should be completed separately.

Additional Identification (Non-resident Customers)

A social security, social insurance or national insurance number is a useful means to identify non-residents. Licensees are encouraged to record such information, as part of the customer profile.

Verifying Information for Corporate Bodies (Legal Persons and Legal Arrangements)

Mandatory requirements for verifying corporate entities, including those that are non-profit organizations (NPOs), whether incorporated in The Bahamas or elsewhere include:

a. Certified copy of the Certificate of Incorporation;

b. Certified copy of the Memorandum and Articles of Association;

c. Notification of prospective Board of Directors;

d. Resolution from the Board of Directors authorizing the opening of the account and conferring authority on the person who will operate the account;

e. Names of senior management holders;

f. Location of the registered office or agent and, the principal place of business;

g. Documentary evidence when unable to complete standard CDD;

h. Confirmation that the corporate entity has not been struck off the business register, or is not in the process of being wound up;

i. Written confirmation that all credits to the facility are and will be owned by the customer corporate entity except in the case of a facility that will be an intermediary facility in which case the beneficial ownership identification information will have to be provided separately;

j. Names and addresses of all beneficial owners (the obligation to verify the identity of beneficial owners shall only extend to those with at least 10% controlling interest in the corporate entity); and

k. The purpose and intended nature of the business relationship, products and/or services provided.

The requirements in c, d, e, f, and j should be regularly updated. In addition to the requirements outlined above, the following information and documents may also be used to support verification of a corporate entity:

List of shareholders;
The potential parameters of the facility including size (for investment and custody accounts);
Balance ranges (in the case of deposit accounts and the expected transaction volume of the account);45 and
Such other official document and other information as is reasonably capable of establishing the ownership and control structure of the corporate entity.

Insurance providers must take reasonable measures to determine the natural persons who control the management of the corporate entity and its ownership structure. Natural persons must be willing to cooperate with competent authorities, providing basic information, particularly on the beneficial ownership.

7.3.1 Categorization and Mitigation of Risk

The ICB requires that all its licensees conduct a risk assessment. This risk assessment should determine a customer's or a product's/service's risk category, whether low, medium, or high. Licensees must also ensure that their procedures include mitigation mechanisms. These mechanisms involve identifying and applying CDD/KYC policies and procedures to mitigate ML/TF/PF risk of particular customers, products or services identified during the assessment process.

Risk Identification

Licensees must collect the following information for all customers to their satisfaction. This information will enable licensees to determine their level of AML/CFT/CPF risk.

Who is the customer?	Is there public information that associates this person with any known ML/TF/PF activities?
Where is the customer located?	Does the customer's jurisdiction apply globally acceptable AML/CFT/CPF standards?
What is the customer's business?	Is this customer's occupation or business activities commonly linked to ML/TF/PF activities?
What products and services does the customer require?	Do the products and services provided to the customer offer the anonymity and movement of funds commonly linked to ML/TF/PF activities?

A similar assessment of the inherent risks associated with products and services should also be conducted. Customers, products, and services should be categorized based on the degree of ML/TF/PF risk they pose to the licensee.

[45] 45References to "account" in relation to verification evidence in the case of a life insurance company should be construed to mean the facility or financial intermediary service that is being provided to that customer facility.

Risk Characteristics

When developing an overall risk framework, it is critical to determine the potential ML/TF/PF risks posed by a customer or a category of customers. In determining the risk profile of any customer, licensees should consider the following factors:

Significant and unexplained geographic distance between residence or business location of the customer and the location of the insurer's representative;
Frequent and unexplained movement of funds between financial institutions in various geographic locations;
Customers that are legal persons whose structure makes it difficult to identify the ultimate beneficial owners or controlling interests;
Customers who seek or accept very unfavourable account/policy/contract provisions or riders;
Charities and other "not for profit" organizations that are not subject to monitoring or supervision (especially those operating cross-border);
"Gatekeepers" such as accountants, lawyers or other professionals holding accounts/policies/contracts at an insurance company, acting on behalf of their customers, and where the insurance company places unreasonable reliance on the gatekeeper;
Customers who are Politically Exposed Persons (PEPs) and close associates of PEPs;
Customers where the beneficial owner of the contract is not known (i.e. certain trusts);
Customers who are introduced through non-face to face channels;
Customers who use unusual payment methods, such as cash, cash equivalents (when such a usage of cash or cash equivalents is, in fact, unusual), or structured monetary instruments;
Customers who seek early termination of a product, especially at a cost to the customer, or where payment is made by, or the refund check is directed to, an apparently unrelated third party;
Customers who transfer the benefit of a product to an apparently unrelated third party;
Customers who show little concern for the investment performance of a product, but a great deal of concern about the early termination features of the product;
Customers who are reluctant to provide identifying information when purchasing a product, or who provides minimal or seemingly fictitious information.

7.3.2 Record Keeping Procedures

There is a statutory requirement that insurance companies retain their records concerning customer identification and transactions for use as evidence in investigations into money laundering, terrorist financing and proliferation financing. Often, the only significant role a financial institution plays in an investigation is providing records, particularly where the money launderer or person financing terrorism used a complex web of transactions in an attempt to confuse the audit trail.

Where there is a statutory obligation to keep records, copies are sufficient, unless the law specifically states otherwise. Insurance companies must satisfy themselves that copies are reproductions of the original documentation. The files should indicate where the originals can be located. These files, which are prepared and maintained as records of the customer relationship and transactions, should be such that:

Requirements within legislation are fully met;
Competent third parties will be able to assess the firm's observance to AML/CFT/CPF policies and procedures;
Any transactions effected via the firm can be reconstructed; and
The firm can satisfy any enquiries or court orders from the appropriate authorities to disclose relevant events.

These documents can be the original documents, or stored on microfiche, computer disk, cd rom, or in other electronic forms.

Retention Period

Records that relate to verifying the identity of any person must be kept for a period not less than five years after verification. Records relating to the verification of the identity of facility holders must be retained for five years after the person ceases to be a facility holder. In keeping with best practices, the date when a person ceases to be a facility holder is the date of:

The carrying out of a one-off transaction or the last in the series of transactions;
The ending of the business relationship, i.e., the closing of the facility; or
The commencement of proceedings to recover debts payable on insolvency.

Where formalities to end a business relationship have not been undertaken, but a period of five years has elapsed since the date when the last transaction was carried out, then the five-year retention period begins on the date of the last transaction was completed. Records that relate to the verification of identity for any transaction conducted through a facility of an intermediary must be kept for a period of not less than five years after the intermediary ceases to be a facility holder. All records related to ongoing investigations must be retained until it is confirmed by the FIU or local law enforcement that the case has been closed.

Minimum Retention Period

Records of suspicion that were raised internally with the MLRO but not disclosed to the authorities should be retained for at least five years from the date of the transaction. Records of suspicions, which authorities have advised are of no interest, should be retained for a similar period. Similarly, records of an insurance company's inquiry into unusual activity should be retained for a minimum of five years following the termination of the business relationship or after the date of the occasional transaction. Licensees should also retain any analysis conducted or considered.

Transaction records

Transaction records (both domestic and international) must be kept for a minimum period of five years after the transaction has been completed, subject to the extended requirements where the records relate to an ongoing investigation then they must be retained until it is confirmed by the FIU or local law enforcement that the case has been closed.

Transaction records to be kept must include the following information:

Nature of the transaction;
Amount of the transaction, and the currency in which it was denominated;
Date on which the transaction was conducted;
Parties to the transaction;
Where applicable, the facility through which the transaction was conducted, and any other facilities (whether provided by the insurance company) directly involved in the transaction; and
All other files and business correspondence and records connected to the facility.

Complex proliferation financing and sanctions evasion: points for insurers and intermediaries

Insurers and intermediaries should note the specific misuse of insurance and reinsurance by the DPRK described in section 5.4.2, the prohibition on insurance and reinsurance for the DPRK in resolution 2270 (2016), and the call in resolution 1929 (2010) to prevent the provision of insurance and reinsurance that could contribute to Iran's proliferation-sensitive activities. Screening should extend to policyholders, insured assets and locations, beneficiaries, claimants, reinsurance counterparties and intermediaries. Marine and cargo underwriters should apply the vessel-related indicators in Annex A.

7.4 Compliance Commission of The Bahamas

The Compliance Commission of The Bahamas (CC) is a statutory authority established under the FTRA. The CC exists for the express purpose of ensuring that financial institutions within their remit,46 comply with the provisions of the FTRA.

The CC commenced its operation on 1 January 2001 as the anti-money laundering regulatory authority for DNFBPs47 inclusive of real estate agents and brokers, land developers, dealers in precious metals, precious stones and pawnshops, lawyers, accountants, persons acting in the capacity of trustee and designated government agencies.

The CC falls within the responsibility of the Ministry of Finance. There are several key pieces of legislation relevant to DNFBPs, including the Anti-Terrorism Act, Financial Transactions Reporting Act, and the Proceeds of Crime Act.48

[46] 46As set out in section 32(2) and subsequently in sections 3 and 4 of the FTRA.

[47] 47Specified in section 4 paragraphs a, b, c, e, f, g, h, i, j, and k of the FTRA 2018.

[48] 48For full list, please see https://CB.finance.gov.bs/regulatory-legal-framework/key-legislations/.

7.4.1 CPF Obligations for DNFBPs

The objective of the UNSCRs is to ensure that proliferators are identified, deprived of economic resources, and prevented from raising, moving and using funds or other assets for the financing of proliferation.

To ensure that all DNFBPs are aware and updated on all PF-related information the CC sends out, via email, all sanction updates. Registrants are required to review all sanction updates and report whether they suspect a customer, prospective customer, or transaction (including attempted transactions) is linked to proliferation financing. This will facilitate and ensure timely and effective utilization of the information by the competent authorities.

In their role as gatekeepers, DNFBPs must comply with FTRA 2018 requirements and other relevant AML/CFT/CPF legislation and applicable guidelines. This includes implementing a compliance program that encompasses the obligations listed in the CC's DNFBPs Code of Practice.49

Proliferation Financing Vulnerabilities of the DNFBP Sector

DNFBPs can be misused for the purpose of the potential breach, non-implementation or evasion of PF-TFS through the use of trust companies' services providers (accountants and lawyers). A significant PF vulnerability stems from the ease with which these relationships can use opaque corporate entities to engage with the financial system. These networks aim to use opaque corporate entities to conduct seemingly legitimate commercial activity, which is ultimately for the benefit of WMD programs.

Dealers in precious metals and stones (DPMS): Designated persons and entities engaging such dealers to transport gold and diamonds to obtain foreign exchanges to finance their transactions. UNSC 1718 Panel of Experts (PoE) reports highlight an investigation into DPRK diplomatic representatives smuggling gold between two countries in the Middle East (August 2020 Report) and the DPRK's involvement in gold mining in Sub-Saharan Africa (March 2020 Report).

Although the risk of proliferation and proliferation financing in The Bahamas is considered low, productor service-specific vulnerabilities may include whether a product or service provided by the financial institution or the DNFBP is complex in nature, has a cross-border reach (e.g. via the distribution channels), is easily accessible to customers, attracts a diverse customer base, or is offered by multiple subsidiaries or branches. For a PF risk assessment by a private sector firm, it may consider the vulnerabilities associated with its products, services, customers and transactions. The vulnerabilities refer to weaknesses and features, which could be exploited for sanctions evasion purposes.

Targeted Financial Sanctions Related to Proliferation

Registrants must ensure facility holder(s) are not from a nation that is subject to sanctions by the UN or similar prohibition from any other official body that would prohibit the establishment of a facility or conduct a transaction.

The CC requests registrants to follow the procedure in section 44 of the Anti-Terrorism Act 2018, including, without delay:

[49] 49See: https://CB.finance.gov.bs/regulatory-legal-framework/codes-of-practice/.

Freeze all the funds held in the name of a designated entity;
Inform the Attorney General, the FIU, and CC that a designated entity conducted business with the DNFBP, providing all details of such funds; and
Report any attempted transaction by or on behalf of a designated entity, and do not inform the designated entity before the funds are frozen.

When a DNFBP knows or has reasonable grounds to suspect that any funds maintained on its books are controlled by a sanctioned individual or legal entity but does not report to the FIU i.e., fails to comply with ATA section 44, it commits an offense and is liable on summary conviction to a fine not exceeding $250,000.

Registrants are expected to conduct checks during onboarding of new customers, and apply a risk-based approach to the frequency of sanction screening. The CC assesses compliance with the procedures for UN sanctions through examinations.

Typologies related to PF

Recent typologies identified by the UNSCR 1718 Panel of Experts indicated that designated persons and entities, and those persons and entities acting on their behalf, have quickly adapted to sanctions and developed complex schemes to make it difficult to detect their illicit activities. The mandate of the UNSCR 1718 Panel of Experts ended in 2024 and the Panel has not been reconstituted. The most recent consolidated description of typologies is the FATF's 2025 report on Complex Proliferation Financing and Sanctions Evasion Schemes; see section 5.

According to the US Department of Treasury NRA (February 2022) Proliferation networks work through the interconnected global financial system, seeking methods for appearing to engage in legitimate commercial activity for revenue generation or the procurement of specific goods for their WMD programs. It further states that a key enabler for exploiting this infrastructure is the misuse of legal entities, particularly the ease with which networks can create shell or front companies to obscure who ultimately benefits from the transactions these firms conduct. DNFBPs must take special care with their PF risk assessment to ensure that their vulnerabilities are not being exploited for sanction evasion purposes.

Education and Training

The CC expects that registrants ensure training for all staff is conducted, at least annually, on CPF, including training on The Bahamas' framework for AML/CFT/CPF. These trainings are supplements to the national regulatory framework that must be complied with by all financial institutions.

The CC provides training annually, monthly, and quarterly on AML/CFT/CPF topics, available on its YouTube channel. Additionally, there are training resources on the CC's website for the benefit of registrants.

Self-Risk Assessments

Registrants should conduct a self-risk assessment to understand their firms' ML/TF/PF risk. Policies, procedures, and controls should be guided by the results of the self-risk assessments in an aim to mitigate the risks identified.

Complex proliferation financing and sanctions evasion: points for DNFBPs

DNFBPs registered with the CC, in particular lawyers, accountants and persons acting as trustee or company formation agent, are engaged by the intermediary and beneficial-ownership typologies in sections 5.4.1 and 5.4.2, and dealers in precious metals and stones by the DPRK revenue-generation methods described in section 5.2. The FATF found that low awareness of proliferation financing obligations among DNFBPs is a common vulnerability. The CC will continue to circulate sanctions updates by email and expects registrants to review every update, to respond where required, and to include proliferation financing in annual training. The CC's DNFBP Code of Practice continues to apply.

7.5 Gaming Board for The Bahamas

The Gaming Board for The Bahamas (GBB) is a statutory authority established in August 1969 in accordance with the Lotteries and Gaming Act 1969. In November 2014, the GBB experienced a significant transformation in the wake of the Government's decision to enact a new suite of legislation to govern gaming operations in The Bahamas, namely:

The Gaming Act 2014;
The Gaming Regulations 2014;
The Gaming House Operator Regulations 2014;
The Gaming Rules 2015 and;
The Financial Transaction Reporting (Gaming) Regulations 2014.

The aforementioned legislative frameworks allow the GBB to regulate the domestic gaming sector by providing a broader range of gaming services and products, and establishing an enhanced and robust licensing regime to its licensees, casinos and gaming house operators.

7.5.1 CPF Requirements

Financial Sanctions

Licensees must ensure to implement TFS to comply with UNSC resolutions relating to the prevention, suppression, and disruption of the proliferation of WMDs and its financing. These resolutions require freezing without delay the funds or other assets of, and to ensure that no funds and other assets are made available, directly or indirectly, to or for the benefit of, any person or entity designated by, or under the authority of, the UNSC under Chapter VII of the Charter of the United Nations. Licensees are therefore required to:

Keep abreast of all sanctions notices issued by the UNSC. Licensees are expected to ensure that funds are not made available to entities or individuals designated in relation to proliferation or its financing. In so doing, all licensees shall establish and implement policies and procedures to maintain awareness of the various resolutions adopted by the UNSC.
Upon receipt of notification of the UNSC Sanctions Listing update, review their database to determine whether the listed entity or individual has any affiliation with the respective casino or gaming house operator.
Report in writing, findings of the database review to the GBB on or before the date indicated in the notification letter.
Report in writing, findings during the review, to the FIU and the Office of the Attorney General.
Immediately freeze the account or any transaction(s) by the patron.50
Maintain the freeze of funds or accounts until further notice by the relevant authorities.

Onboarding Requirements

The GBB requires all licensees to register their potential patrons, conduct KYC measures, and assess any risks that can be associated with their transactions or activities. Patron registration procedure requirements are outlined in Regulation 150 of the Gaming Regulations 2014 and Regulation 19 of the Gaming House Operator Regulations 2014.

Ongoing Requirements

Customer Due Diligence

Upon registration, licensees must execute CDD measures in accordance with the information provided by the patron at registration. Licensees should have appropriate policies and procedures, including stringent CDD rules to promote high ethical and professional standards in the gaming industry to ensure that their establishments are not used, intentionally or unintentionally, for criminal activities before onboarding.

The GBB requires licensees to conduct the following assessments to ensure accurate verification of existing, potential, and new patrons:

Conduct screening on existing and new patrons.
Verify all new patrons prior to onboarding to evaluate any risk they may pose to the business. The information shall include but are not limited to the following:
- Full and correct name of the individual;
- Address;
- Date and place of birth; and
- Purpose of the account and the nature of the business relationship.
Utilize publicly available reports through the media and the internet, which provides insights into the patron's background.
Utilize search engines such as World-Check and LexisNexis to gather additional information about the patron.
Identify the type of business a prospective patron is engaged in to assess whether there is a potential proliferation risk.

[50] 50Per Section 2 of the Gaming Act 2014, a "patron" means any participant in a gaming activity, other than the holder of a license issued under the Act.

Adopt policies preventing customer relationships with individuals who are from high-risk countries for proliferation financing or countries subject to relevant UN sanctions.
Have a robust ML/TF/PF risk management program in place that incorporates identifying, monitoring, and reporting suspicious transactions.
Take appropriate mitigating measures commensurate with the level of risks identified.

Enhanced Due Diligence

GBB requires its licensees to apply EDD measures in addition to the aforementioned requirements to manage and mitigate the proliferation financing risks arising in the following cases:

The gaming licensee has determined that a patron or potential patron is a PEP or a family member or known close associate of a PEP.
Where a transaction is complex or unusually large, or there is an unusual pattern of transactions, or the transaction(s) have no apparent economic or legal purpose.

Depending on the circumstance, licensees should conduct EDD measures, which may include, but are not limited to:

Source of wealth verification;
Verification of patron information through searches of additional independent and trusted sources;
Additional measures to better understand the context, ownership, and financial background of the patron; and
Enhanced monitoring to ensure that patron transactions coincides with the patron's profile.

When conducting business with customers that reside in high-risk countries or when conducting transactions in which one of the parties to the transaction resides in a high-risk country, licensees must conduct the following enhanced measures:

Obtaining additional information on the intended nature of the business relationship;
Obtaining information on the source of funds and source of wealth of the potential patron;
Obtaining information on the type of transactions;
Obtaining approval of senior management to establish or continue the business relationship; and
Enhance monitoring of business relationships by increasing the number and timing of controls applied and selecting patterns of transactions that require further review.

Red Flag Indicators

Licensees are to be aware of the potential proliferation financing, red flag indicators as provided below:

The patron has ties to a foreign country of proliferation concern, or a neighbouring sympathetic country.
Patron is involved in the supply, sale, delivery, or purchase of dual-use, proliferation-sensitive or military goods, particularly to higher-risk jurisdictions.
Patron's address or telephone number is the same or similar to an individual found on sanctions lists.
The potential patron or supplier is connected with a higher-risk jurisdiction of proliferation concern.
The patron activity does not match the patron's profile.
The patron provides incomplete information, or is resistant to providing additional information when sought.
Patron purchases large volume of chips with cash, participates in limited gambling activity with the intention of creating a perception of significant gambling, and then cashes the chips for a casino cheque.
Patron puts money into slot machine and claims accumulated credits as a jackpot win.
Patron exchanges small denomination bank notes for large denomination bank notes, chip purchases vouchers or cheques.

Risk-Based Approach

Licensees' Risk-Based Approach shall incorporate controls to mitigate the risk of proliferation financing within their current AML/CFT structure. As such, Gaming Licensees shall implement policies, which prevent the formation of patron relationships that expose their operations to countries that are at higher risk for proliferation financing.

Through the adoption of a risk-based approach, Gaming Licensees can assess whether their patron or potential patron is from a jurisdiction that is subject to any UN sanctions; and also exercise ongoing due diligence. Essentially, the GBB expects the gaming licensee to use reasonable efforts to create and maintain supporting records and have clear policies, procedures, and controls relative to maintaining records, which facilitates proper evaluation of the PF risks at Casinos or Gaming Houses.

Training

Licensees should provide training to their staff at least annually in relation to PF matters. Records are to be retained of all training undertaken by staff of the Casino and Gaming Houses. Training provided to staff of Casinos and Gaming House Operators relative to PF may include:

Trends, typologies, and PF patterns;
Any other workshops, conferences, seminars, or the like, which will increase awareness on the prevention and suppression of proliferation and proliferation financing; and
The AML/CFT/CPF legislative framework.

Complex proliferation financing and sanctions evasion: points for gaming licensees

Casino and gaming house operators should ensure that patron screening includes the re-established 1737 Sanctions List and that the red flag indicators above are read with Annex A, in particular the indicators relating to persons connected with countries of proliferation concern, cash-intensive activity inconsistent with the patron's profile, and the use of third parties to hold or move funds.

8. Conclusion

Preventing proliferation and its financing remains an area of high importance for the GFSR. The FATF has provided updated guidance to assist jurisdictions with combating AML/CFT/CPF in the face of new financial products and technologies, reinforcing the principle that jurisdictions and their constituent entities must continually review their AML/CFT/CPF strategies to ensure that they remain effective as individuals continue to innovate. While the threat of PF is low in The Bahamas, ensuring it remains low will require cooperation on both a national and international scale. Identifying, assessing, and understanding proliferation financing risks will assist the country and its entities in preventing designated persons involved in PF from raising and using funds.

The re-application of the United Nations measures on Iran in September 2025 and the FATF's 2025 findings on complex proliferation financing and sanctions evasion schemes show how quickly the proliferation financing landscape can change. This revised edition brings the Guidelines up to date with both developments. Regulated persons are expected to act on section 6.3 within the periods stated there, and the GFSR will continue to update the Guidelines as the international and domestic framework evolves.

The GFSR provides these CPF Guidelines as supplementary material to the aforementioned CPF legislative framework and is intended to act as a reminder of and explanation for the duties and obligations of registrants and licensees of GFSR members.

Annex A: Risk Indicators for Complex Proliferation Financing and Sanctions Evasion

The indicators below are adapted from Annex A of the FATF Complex PF Report and supplement those in section 4. They are not exhaustive. A single indicator does not by itself establish suspicion, but it should prompt further enquiry; several indicators together warrant closer examination. Whether an indicator is relevant depends on the regulated person's products, customers and delivery channels. Some indicators depend on information, such as customs or shipping data, that a regulated person may not hold; in those cases the indicator is most useful when read with information provided by the competent authorities.

A.1 Customer information and behaviour

No.	Indicator
C1	Corporate vehicles, including shell companies, are used to obscure ownership, the source of funds or the countries and entities involved, particularly sanctioned countries.
C2	The end-user is obscured through layering: shipments, communications and payments are routed through several companies, brokers and intermediaries.
C3	Complicated structures, such as layered letters of credit, front companies, intermediaries and brokers, are used to conceal the connection between the customer and goods imported or exported.
C4	Standard business documents are altered in ways that obscure the ultimate customer.
C5	Party details (names, addresses, telephone numbers) are similar to those of parties listed under proliferation-related sanctions or trade controls.
C6	Accounts are held, or transactions conducted, by companies with opaque ownership, shell companies or companies formed shortly before the transaction.
C7	The customer supplies, sells or delivers restricted or high-risk goods or technology.
C8	The customer has had dealings with, or maintains relationships with, persons now subject to sanctions.
C9	Parties are located in countries of diversion concern (countries through which proliferation-sensitive goods, or their financing, are allowed to pass).
C10	The customer or its counterparty transacts with persons designated under a sanctions regime, or the transaction contains an identifier (email address, physical address, telephone number, passport number, virtual asset address) listed for such a person.
C11	The customer is affiliated with a university or research institution that handles dual-use goods or export-controlled products.
C12	The purported end-user is civilian but basic research shows the address is a military facility, or is co-located with one, in a country of concern.
C13	The customer acquires vessels for no apparent economic or business purpose.
C14	The business model is fully export-oriented and the entity appears to act as a pass-through.
C15	The company operates in the shipping, import and export, textile, garment, fishery or seafood industry (sectors associated with DPRK revenue generation).
C16	The customer insists on confidentiality regarding transactions or shows inadequate concern about sanctions and proliferation financing compliance.
C17	Business registration indicates work on "special purpose" projects.
C18	The customer asks to borrow personal information from co-workers or associates to secure contracts or open accounts.
C19	The customer transacts in goods unrelated to its normal business that may involve dual-use equipment or technology (chemical reactors, machine tools, missile system components).
C20	The customer's contact information, such as telephone numbers, does not match the destination country.
C21	The customer refuses to provide details to banks, shippers or third parties about end-users, intended end-use or company ownership.
C22	A company handling significant transactions has no online presence or physical footprint.
C23	Spoofed email or web addresses are used to make illegitimate enquiries appear to come from legitimate businesses, often exploiting known business relationships.
C24	The IP address used does not match the customer's reported location.
C25	The corporate name is overly generic, non-descriptive or easily confused with a better-known entity, or is regularly misspelled in different ways.

A.2 Transactions

No.	Indicator
T1	Smaller-volume payments are made from the same end-user's foreign bank account to multiple similar suppliers.

No.	Indicator
T2	There is a last-minute change in payment routing from a country of concern to a different country or company.
T3	A prohibited transaction is routed through the financial system so that a financial institution processes a payment in breach of a sanctions regime.
T4	Funds flow cyclically between companies, with one ceasing and another starting payments to the same beneficiary.
T5	The customer uses financial services or conducts transactions physically distant from the actual trade in goods.
T6	References to sanctioned parties or countries are omitted from transaction documentation.
T7	Transactions pass through countries or financial centres known for weak sanctions enforcement or illicit trade schemes.
T8	Complex or unusual payment routes are used, including chains of multiple financial institutions, especially through countries with inadequate proliferation financing controls.
T9	Open accounts or open lines of credit are used for payments in conjunction with known transhipment countries.
T10	Purchases under a letter of credit are consigned to the issuing bank rather than the end-user.
T11	The customer requests a letter of credit for dual-use or export-controlled products before the account is approved.
T12	Deposit balances increase steeply and are followed by cash withdrawals.
T13	The customer transfers funds overseas in amounts similar to recent cash deposits.
T14	Individuals' personal accounts are used to pay for products or industrial goods.
T15	Numerous bank accounts are used without clear business reason.
T16	There is no clear justification for a trade transaction or for a large payment, especially where it is out of line with the customer's normal business.
T17	The volume and value of goods do not match the volume of payments.
T18	The customer requests payment in virtual assets to avoid identification and verification.
T19	Transfers are made through VASPs in weakly regulated countries, or through decentralised exchanges without due diligence.
T20	Unofficial or alternative channels, such as hawala, are used in a way that could circumvent sanctions.
T21	New virtual asset addresses are created to give the appearance of non-involvement with a sanctioned exchange.
T22	Payments for defence or dual-use products are made to or from a company incorporated after February 2022 and based in a country that does not apply the relevant export controls.

A.3 Trade and shipping activity

No.	Indicator
S1	Shipping instructions are changed when goods arrive at a freight forwarder, without the exporter's knowledge.
S2	Last-minute changes are made to shipping instructions that contradict customer history or business practice.
S3	The final consignee or destination in shipping documents is changed before or during shipment.
S4	The customer requests shipment to an address not listed on its identification documents.
S5	The quality of the product exported is inconsistent with the technological level of the destination country.
S6	The shipment is inconsistent with normal geographical trade patterns for the goods concerned.
S7	The trade involves equipment or materials capable of use in military or nuclear programmes (for example high-strength alloys or centrifuges).
S8	A freight forwarder or charter aircraft operator is listed as the end-user.
S9	Goods are transported by roundabout means, including small or obsolete vessels.
S10	Items arrive in small, frequent shipments at a central location before being combined.
S11	Freight forwarders operating in high-risk transhipment areas are involved.
S12	Purchases are routed through transhipment points commonly used to redirect restricted items to embargoed destinations.
S13	The shipping route is atypical for the product and destination.
S14	A freight forwarding or customs clearing firm is listed as the product's final destination.
S15	The goods' destination differs from the country to or from which payment is sent, with no plausible reason.
S16	Shipping documents, such as bills of lading and invoices, are falsified to conceal routes, ports, consignees or agents.
S17	Names of goods subject to sanctions or export controls are substituted, or false contracts are used to conceal the end-user.
S18	Supporting documents, such as the commercial invoice, do not name the actual end-user.
S19	Goods are misclassified in documentation, using non-sensitive descriptions for restricted items.
S20	There are discrepancies between commercial, transport and financial documents (type of goods, weight, value, destination).
S21	Country-of-origin labels identify a third country for goods produced in the DPRK.
S22	A third-country supplier shifts manufacturing or subcontracting to a DPRK factory without informing the customer.
S23	Vessels have been physically altered to obscure their identity.
S24	Luxury goods are shipped frequently to central warehouses in third countries.
S25	There are rapid shifts to new purchasers for transactions involving restricted luxury goods.
S26	Purchases and deliveries of construction materials occur in patterns associated with sanctioned infrastructure projects.
S27	Substantial financial activity is unrelated to the stated business purpose (for example payments unrelated to textiles, fisheries or coal exports).
S28	Manufacturing or trading companies use cash for industrial products or other trade transactions.
S29	The declared price of cargo is low compared with the transport cost.
S30	A vessel's flag of registry changes frequently.

No.	Indicator
S31	Free trade zones are involved in a way that could obscure the origin and movement of sensitive items.

Annex B: The Re-established 1737 Sanctions List (Summary)

The table below summarises the 43 individuals and 78 entities re-added to the United Nations Security Council Consolidated List on 28 September 2025 under the sanctions list maintained by the 1737 Committee. It is reproduced for convenience from the Committee's notice and shows each entry's name, principal alternative names and original listing date. It is not a substitute for the Consolidated List itself, which carries the full identifying information and any later amendments; regulated persons must screen against the Consolidated List as published by the United Nations and as transmitted by the National Coordinator and GFSR members.

B.1 Individuals

No.	Name	Alternative names (as listed)	Listed on
1	FEREIDOUN ABBASI-DAVANI		24 Mar 2007 (amended on 17 Dec 2014)
2	DAWOOD AGHA-JANI		23 Dec 2006 (amended on 17 Dec 2014)
3	AZIM AGHAJANI	Azim Adhajani; Azim Agha-Jani	18 Apr 2012 (amended on 17 Dec 2014)
4	ALI AKBAR AHMADIAN	Ali Akbar Ahmedian	24 Mar 2007 (amended on 17 Dec 2014)
5	AMIR MOAYYED ALAI		3 Mar 2008 (amended on 17 Dec 2014)
6	BEHMAN ASGARPOUR	Behman Asgharpour; Behman Asgharpur	23 Dec 2006 (amended on 17 Dec 2014)
7	MOHAMMAD FEDAI ASHIANI		3 Mar 2008 (amended on 17 Dec 2014)
8	ABBAS REZAEE ASHTIANI		3 Mar 2008 (amended on 17 Dec 2014)
9	BAHMANYAR MORTEZA BAHMANYAR		23 Dec 2006 (amended on 17 Dec 2014)
10	HALEH BAKHTIAR	Halen Bakhtiar; Haleh Bakhtiari; Haleh Bakhtiyar	3 Mar 2008 (amended on 17 Dec 2014)
11	MORTEZA BEHZAD		3 Mar 2008 (amended on 17 Dec 2014)
12	AHMAD VAHID DASTJERDI		23 Dec 2006 (amended on 17 Dec 2014)
13	AHMAD DERAKHSHANDEH		24 Mar 2007 (amended on 17 Dec 2014)
14	MOHAMMAD ESLAMI	Mohammad Islami; Mohamed Islami; Mohammed Islami	3 Mar 2008 (amended on 17 Dec 2014)
15	REZA-GHOLI ESMAELI	Reza-Gholi Ismaili	23 Dec 2006 (amended on 17 Dec 2014)
16	MOHSEN FAKHRIZADEH-MAHABADI		24 Mar 2007 (amended on 17 Dec 2014)
17	MOHAMMAD HEJAZI	Mohammed Hijazi	24 Mar 2007 (amended on 17 Dec 2014)
18	MOHSEN HOJATI		24 Mar 2007 (amended on 17 Dec 2014)
19	SEYYED HUSSEIN HOSSEINI,	Syed Husain Husaini; Syed Husein Huseini	3 Mar 2008 (amended on 17 Dec 2014)
20	MEHRDADA AKHLAGHI KETABACHI		24 Mar 2007 (amended on 17 Dec 2014)
21	ALI HAJINIA LEILABADI		23 Dec 2006 (amended on 17 Dec 2014)
22	NASER MALEKI		24 Mar 2007 (amended on 17 Dec 2014)
23	HAMID-REZA MOHAJERANI	Hamid Reza Mohajerani Araghi	3 Mar 2008 (amended on 17 Dec 2014)
24	JAFAR MOHAMMADI		23 Dec 2006
25	EHSAN MONAJEMI	Ihsan Monajemi	23 Dec 2006 (amended on 17 Dec 2014)
26	MOHAMMAD REZA NAQDI		3 Mar 2008 (amended on 17 Dec 2014)
27	MOHAMMAD MEHDI NEJAD NOURI		23 Dec 2006 (amended on 17 Dec 2014)
28	HOUSHANG NOBARI		3 Mar 2008 (amended on 17 Dec 2014)
29	MOHAMMAD QANNADI		23 Dec 2006 (amended on 17 Dec 2014)
30	AMIR RAHIMI		24 Mar 2007 (amended on 17 Dec 2014)
31	JAVAD RAHIQI	Javad Rahigi; Jawad Rahigi; Jawad Rahiqi	18 Apr 2012 (amended on 17 Dec 2014)
32	ABBAS RASHIDI	Abas Rashidi; Abbas Rashedi; Abas Rashedi	3 Mar 2008 (amended on 17 Dec 2014)
33	MORTEZA REZAIE	Mortaza Rezaie; Mortaza Rezai; Morteza Rezai	24 Mar 2007 (amended on 17 Dec 2014)
34	M. JAVAD KARIMI SABET	Mohammed Sabet; Mohammad Sabet b) M. Javad Kareemi Sabet; M. Jawad Kareemi Sabet; M. Jawad Karimi Sabet	3 Mar 2008 (amended on 17 Dec 2014)
35	MORTEZA SAFARI	Mortaza Safari; Morteza Saferi; Murtaza Saferi; Murtaza Safari	24 Mar 2007 (amended on 17 Dec 2014)
36	YAHYA RAHIM SAFAVI	Yahya Raheem Safavi	23 Dec 2006 (amended on 17 Dec 2014)
37	SEYED JABER SAFDARI	Syed Jaber Safdari	24 Mar 2007 (amended on 17 Dec 2014)
38	HOSEIN SALIMI	Husain Salimi; Hosain Salimi; Hussain Salimi; Hosein Saleemi; Husain Saleemi; Hosain Saleemi; Hussain Saleemi; Hossein Salimi; Hossein Saleemi	23 Dec 2006 (amended on 17 Dec 2014)
39	QASEM SOLEIMANI	Qasim Soleimani; Qasem Sulaimani; Qasim Sulaimani; Qasim Sulaymani; Qasem Sulaymani; Kasim Soleimani; Kasim Sulaimani; Kasim Sulaymani	24 Mar 2007 (amended on 17 Dec 2014)
40	GHASEM SOLEYMANI	Ghasim Soleymani; Ghasem Sulaymani; Ghasem Solaymani	3 Mar 2008 (amended on 17 Dec 2014)
41	ALI AKBAR TABATABAEI	a) Sayed Akbar Tahmaesebi; Syed Akber Tahmaesebi b) Ali Akber Tabatabaei; Ali Akber Tahmaesebi; Ali Akbar Tahmaesebi	18 Apr 2012 (amended on 17 Dec 2014)
42	MOHAMMAD REZA ZAHEDI	Mohammad Reza Zahidi; Mohammad Raza Zahedi	24 Mar 2007 (amended on 17 Dec 2014)
43	MOHAMMAD BAQER ZOLQADR	Mohammad Bakr Zolqadr; Mohammad Bakr Zolkadr; Mohammad Baqer Zolqadir; Mohammad Baqer Zolqader	24 Mar 2007 (amended on 17 Dec 2014)

B.2 Entities and other groups

No.	Name	Alternative names (as listed)	Listed on
1	7TH OF TIR		23 Dec 2006 (amended on 17 Dec 2014)
2	ABZAR BORESH KAVEH CO. (BK CO.)		3 Mar 2008 (amended on 17 Dec 2014)
3	AMIN INDUSTRIAL COMPLEX	a) Amin Industrial Compound b) Amin Industrial Company	9 Jun 2010 (amended on 17 Dec 2014)
4	AMMUNITION AND METALLURGY INDUSTRIES GROUP (AMIG)	Ammunition Industries Group	24 Mar 2007 (amended on 17 Dec 2014)
5	ARMAMENT INDUSTRIES GROUP (AIG)		9 Jun 2010 (amended on 17 Dec 2014 )
6	ATOMIC ENERGY ORGANISATION OF IRAN (AEOI)		23 Dec 2006
7	BANK SEPAH AND BANK SEPAH INTERNATIONAL		24 Mar 2007
8	BARZAGANI TEJARAT TAVANMAD SACCAL COMPANIES		3 Mar 2008
9	BEHINEH TRADING CO.		18 Apr 2012
10	CRUISE MISSILE INDUSTRY GROUP	Naval Defence Missile Industry Group	24 Mar 2007
11	DEFENCE INDUSTRIES ORGANISATION (DIO)		23 Dec 2006
12	DEFENSE TECHNOLOGY AND SCIENCE RESEARCH CENTER (DTSRC)		9 Jun 2010 (amended on 17 Dec 2014 )
13	DOOSTAN INTERNATIONAL COMPANY (DICO)		9 Jun 2010 (amended on 17 Dec 2014)
14	ELECTRO SANAM COMPANY	a) E. S. Co. b) E. X. Co.	3 Mar 2008
15	ESFAHAN NUCLEAR FUEL RESEARCH AND PRODUCTION CENTRE (NFRPC) AND ESFAHAN NUCLEAR TECHNOLOGY CENTRE (ENTC)		24 Mar 2007
16	ETTEHAD TECHNICAL GROUP		3 Mar 2008
17	FAJR INDUSTRIAL GROUP		23 Dec 2006
18	FARASAKHT INDUSTRIES		9 Jun 2010
19	FARAYAND TECHNIQUE		23 Dec 2006
20	FATER INSTITUTE	Faater Institute	9 Jun 2010
21	FIRST EAST EXPORT BANK, P.L.C.		9 Jun 2010
22	GHARAGAHE SAZANDEGI GHAEM		9 Jun 2010
23	GHORB KARBALA		9 Jun 2010
24	GHORB NOOH		9 Jun 2010
25	HARA COMPANY		9 Jun 2010
26	IMENSAZAN CONSULTANT ENGINEERS INSTITUTE		9 Jun 2010
27	INDUSTRIAL FACTORIES OF PRECISION (IFP) MACHINERY	Instrumentation Factories Plant	3 Mar 2008
28	IRANO HIND SHIPPING COMPANY		9 Jun 2010
29	IRISL BENELUX NV		9 Jun 2010
30	JABBER IBN HAYAN		3 Mar 2008
31	JOZA INDUSTRIAL CO.		3 Mar 2008
32	KALA-ELECTRIC	Kalaye Electric	23 Dec 2006
33	KARAJ NUCLEAR RESEARCH CENTRE		24 Mar 2007
34	KAVEH CUTTING TOOLS COMPANY		9 Jun 2010
35	KAVOSHYAR COMPANY		24 Mar 2007
36	KHATAM AL-ANBIYA CONSTRUCTION HEADQUARTERS (KAA)		9 Jun 2010 (amended on 17 Dec 2014 )
37	KHORASAN METALLURGY INDUSTRIES		3 Mar 2008
38	M. BABAIE INDUSTRIES		9 Jun 2010
39	MAKIN		9 Jun 2010
40	MALEK ASHTAR UNIVERSITY		9 Jun 2010
41	MESBAH ENERGY COMPANY		23 Dec 2006
42	MINISTRY OF DEFENSE LOGISTICS EXPORT	MODLEX	9 Jun 2010
43	MIZAN MACHINERY MANUFACTURING	3MG	9 Jun 2010
44	MODERN INDUSTRIES TECHNIQUE COMPANY (MITEC)	a) MITEC b) Rahkar Company c) Rahkar Industries d) Rahkar Sanaye Company e) Rahkar Sanaye Novin	9 Jun 2010 (amended on 17 Dec 2014)
45	NIRU BATTERY MANUFACTURING COMPANY		3 Mar 2008
46	NOVIN ENERGY COMPANY	Pars Novin	24 Mar 2007
47	NUCLEAR RESEARCH CENTER FOR AGRICULTURE AND MEDICINE (NFRPC)	a) Center for Agricultural Research and Nuclear Medicine b) Karaji Agricultural and Medical Research Center	9 Jun 2010 (amended on 17 Dec 2014)
48	OMRAN SAHEL		9 Jun 2010
49	ORIENTAL OIL KISH		9 Jun 2010
50	PARCHIN CHEMICAL INDUSTRIES		24 Mar 2007
51	PARS AVIATION SERVICES COMPANY		24 Mar 2007
52	PARS TRASH COMPANY		23 Dec 2006
53	PEJMAN INDUSTRIAL SERVICES CORPORATION		9 Jun 2010
54	PISHGAM ENERGY INDUSTRIES	Pioneer Energy Industries	3 Mar 2008
55	QODS AERONAUTICS INDUSTRIES		24 Mar 2007
56	RAH SAHEL		9 Jun 2010
57	RAHAB ENGINEERING INSTITUTE		9 Jun 2010
58	SABALAN COMPANY		9 Jun 2010
59	SAD IMPORT EXPORT COMPANY		20 Dec 2012 (amended on 17 Dec 2014)
60	SAFETY EQUIPMENT PROCUREMENT (SEP)		3 Mar 2008
61	SAHAND ALUMINUM PARTS INDUSTRIAL COMPANY (SAPICO)		9 Jun 2010
62	SAHEL CONSULTANT ENGINEERS		9 Jun 2010
63	SANAM INDUSTRIAL GROUP		24 Mar 2007
64	SEPANIR		9 Jun 2010
65	SEPASAD ENGINEERING COMPANY		9 Jun 2010
66	SHAHID BAGHERI INDUSTRIAL GROUP (SBIG)		23 Dec 2006
67	SHAHID HEMMAT INDUSTRIAL GROUP (SHIG)		23 Dec 2006
68	SHAHID KARRAZI INDUSTRIES		9 Jun 2010
69	SHAHID SATTARI INDUSTRIES	Shahid Sattari Group Equipment Industries	9 Jun 2010
70	SHAHID SAYYADE SHIRAZI INDUSTRIES (SSSI)		9 Jun 2010
71	SHO'A' AVIATION		24 Mar 2007
72	SOUTH SHIPPING LINE IRAN (SSL)		9 Jun 2010
73	SPECIAL INDUSTRIES GROUP (SIG)		9 Jun 2010
74	TAMAS COMPANY		3 Mar 2008
75	TIZ PARS		9 Jun 2010
76	YA MAHDI INDUSTRIES GROUP		24 Mar 2007
77	YAS AIR		20 Dec 2012
78	YAZD METALLURGY INDUSTRIES (YMI)	a) Yazd Ammunition Manufacturing and Metallurgy Industries b) Directorate of Yazd Ammunition and Metallurgy Industries	9 Jun 2010

Contact Information

Central Bank of The Bahamas	Tel: 1 (242) 302-2600; Email: cbob@centralbankbahamas.com; Website: centralbankbahamas.com
Securities Commission of The Bahamas	Tel: 1 (242) 397-4100; Email: info@scb.gov.bs; Website: scb.gov.bs
Insurance Commission of The Bahamas	Tel: 1 (242) 397-4183 / 376-7242; Email: info@icb.gov.bs; Website: insurancecommissionbahamas.com
Compliance Commission of The Bahamas	Tel: 1 (242) 604-4331; Email: compliance@bahamas.gov.bs; Website: CB.finance.gov.bs
Gaming Board for The Bahamas	Tel: 1 (242) 397-9200; Email: info@bahamasgamingboard.com; Website: gamingboardbahamas.com
Financial Intelligence Unit	Tel: 1 (242) 397-6300; Email: director.fiu@fiubahamas.bs; Website: fiubahamas.org.bs

Countering Proliferation Financing Guidelines
© 2026 Group of Financial Services Regulators: Central Bank of The Bahamas, Securities Commission of The Bahamas, Insurance Commission of The Bahamas, Compliance Commission of The Bahamas, Gaming Board for The Bahamas

COUNTERING PROLIFERATION FINANCING GUIDELINES

FOR FINANCIAL INSTITUTIONS AND DESIGNATED NON-FINANCIAL BUSINESSES AND PROFESSIONS

About the Group of Financial Services Regulators (GFSR)

Table of Contents

Glossary: Key Abbreviations

Glossary: Key Terminology

About the 2026 Revision

1. Background

Inclusion of Digital Asset Businesses

2. Introduction

2.1 Purpose, Objectives, and Scope

2.2 Role of the Group of Financial Services Regulators

2.3 Role of the Identified Risk Framework Steering Committee

3. Overview of Proliferation Financing

3.1 Proliferation

3.2 Proliferation Financing

3.2.1 Dual Use Goods

3.3 Stages of Proliferation Financing

3.4 Comparison between Money Laundering, Terrorist Financing and Proliferation Financing

3.5 Identifying and Classifying Proliferation Financing Risks

3.5.1 Performing a Proliferation Financing Risk Assessment

4. Indicators of Potential PF-TFS Breach or Evasion

4.1 Customer Profile Risk Indicators

4.2 Account and Transaction Activity Risk Indicators

4.3 Trade Finance Risk Indicators

5. Complex Proliferation Financing and Sanctions Evasion Schemes

5.1 The FATF's 2025 Report and its Relevance to The Bahamas

5.2 The Current Threat Picture

5.3 Scope: United Nations Measures and Other Sanctions Regimes

5.4 The Four Typologies

5.4.1 Enlisting intermediaries to evade sanctions

5.4.2 Obscuring beneficial ownership to access the financial system

5.4.3 Using virtual assets and other technologies

5.4.4 Exploiting the maritime and shipping sectors

5.5 Vulnerabilities to Consider in the Proliferation Financing Risk Assessment

5.6 Detection and Reporting: Good Practices

6. Counter Proliferation Financing: Regulatory and Legal Framework

6.1 International Standards, Obligations and Sanctions Regimes

6.1.1 United Nations Security Council Resolutions

Global Approach: UNSCR 1540 and its Successor Resolutions

Country-specific Approach: UNSCR 1718 and UNSCR 1737 and their Successor Resolutions

Re-application of the United Nations measures on Iran (2025)

Key dates

The re-established 1737 Sanctions List

Effect on the FATF Standards and on the definition of proliferation financing risk

Measures beyond the asset freeze

A contested re-application and reduced United Nations monitoring

6.1.2 Financial Action Task Force

Recommendation 1

Recommendation 2

Recommendation 7

Key Elements of FATF PF Recommendations

6.2 Domestic Obligations

Anti-Terrorism Act 2018 (ATA)

Reporting Requirements

Anti-Terrorism (Amendment) Act, 2026

Financial Transaction Reporting Act 2018 (FTRA)

Summary of FTRA Requirements for Financial Institutions and DNFBPs

Suspicious Transaction Reporting

Proceeds of Crime Act 2018 (POCA)

Customs Management Act 2011

International Obligations (Economic and Ancillary Measures) Act 1993

6.3 Implementing the Re-applied Iran Measures: Expectations of the GFSR

Communication of United Nations sanctions-list changes

Reporting and expectations

7. Sectoral Guidance

7.1 Central Bank of The Bahamas

7.1.1 CPF Requirements

Onboarding Requirements for Prospective SFIs

Verification of Customer Identity

Monitoring of Business Relationships

Internal Controls, Policies and Procedures

Record Keeping

Retention Period and Record Format

Education and Training

Enforcement Matters

Complex proliferation financing and sanctions evasion: points for supervised financial institutions

7.2 Securities Commission of The Bahamas

7.2.1 CPF Requirements

Onboarding Requirements