Deficiencies in Belize and Guyana AML compliance highlighted

Deficiencies in anti-money laundering compliance in Belize and Guyana have been highlighted by the Caribbean Financial Action Task Force (CFATF) and the British Virgin Islands (BVI) regulator.

CFATF, the regional supervisor for anti-money laundering compliance, on 20 November 2013 issued a public statement identifying countries in the Caribbean Region that were deficient in their anti-money laundering and combating the financing of terrorism regimes (AML / CFT). Belize and Guyana were named in the Statement. Dominica, having been previously identified as deficient, was the only country identified as having made significant improvement. 

The BVI regulator, the Financial Services Commission, further highlighted the CFATF’s announcement in a public statement issued on 14 January 2014. Jurisdictions not mentioned in this note remain unaffected.

Belize and Guyana

Following minimal progress from an initial round of supervision in November 2011, the CFATF in May 2013 established action plans with deadlines designed to strengthen the AML / CFT regimes in both Belize and Guyana. In summary, the Belize plan required the country to: (1) address deficiencies with the obligations on conducting customer due diligence, (2) fully implement the CFT framework, (3) extend the AML / CFT framework to designated non-financial businesses and professions, (4) address deficiencies with the operational independence of the Financial Intelligence Unit and (5) prohibit dealings with shell banks.  The plan for Guyana called on the jurisdiction to: (1) pass legislation to fully criminalise money laundering and terrorist financing offences, (2) address all the requirements on beneficial ownership, (3) strengthen the requirements for suspicious transactions, international cooperation, and the freezing and confiscation of terrorist assets and (4) fully implement relevant United Nations conventions.

Dominica

As with Belize and Guyana, the CFATF in May 2013 established an action plan for Dominica to address AML /CFT deficiencies.  Unlike the two other jurisdictions however, CFATF acknowledged that Dominica fulfilled the requirements of the action plan by implementing legislation and significant mechanisms to address previous AML /CFT deficiencies.

What does this mean?

Regulated businesses in the BVI and beyond are reminded, in light of the above, to exercise caution when conducting business with undertakings emanating from or structured through Belize or Guyana.  In all likelihood, enhanced due diligence measures should be conducted as well as any extra requirements that a firm’s money laundering reporting officer deems necessary on a case by case basis.

It is also likely, following CFATF recommendations, that governments in the Caribbean basin and beyond will strengthen countermeasures to deal with perceived increased risks in dealing with persons and businesses based in or structured through Belize and Guyana. 

For businesses structured through, but not physically based in, these countries it may now be a suitable time to review business needs in order to determine whether they may be more appropriately served by transferring operations to vehicles based in alternative jurisdictions.

Resources:
 
The FSC’s public statement is here: http://www.bvifsc.vg/News/tabid/160/articleType/ArticleView/articleId/1392/language/en-US/CFATF-Public-Statement--Public-Statement-No-1-of-2014-14-January-2014.aspx

The CFATF’s statement is here: https://www.cfatf-gafic.org/index.php?option=com_content&view=article&id=1630%3Acfatf-public-statement-freeport-the-bahamas-november-18th-2013&catid=609%3Apublic-statements&Itemid=663&lang=en
 

Topics:  Anti-Money Laundering, Compliance, Corruption, White Collar Crimes

Published In: General Business Updates, Finance & Banking Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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