Caribbean Nations Discuss New Anti-Money-Laundering Methods

by Mike Godfrey, Tax-News.com, New York

21 January 2003

The Caribbean Financial Action Task Force (CFATF) met last week in Barbados to formulate a position on a report put forward by its sister organisation, the Financial Action Task Force (FATF) which contains new criteria for a global assessment methodology designed to combat money laundering and terrorist financing.

While the meeting stopped short of endorsing what is known as the AML/CFT Methodology, it accepted that the the methodology would continue to be used during the current IMF/World Bank Pilot Project which includes assessment of CTATF member states.

The CAFTF issued the following communique after the meeting:

'The members of the Caribbean Financial Action Task Force (CFATF) reaffirm their commitment to the global struggle against money laundering and the financing of terrorism and strongly recommend utilizing the United Nations framework, based on collaboration and open participation, to work towards a Global Convention on Money Laundering.

'The CFATF notes that prior to its adoption by the IMF Board on 15th November 2002, three successive versions of the Anti-money Laundering/Combating the Financing of Terrorism Methodology were used by the IMF/WORLD BANK with the concurrence of their Boards during Financial Sector Assessment Programmes and Offshore Financial Centre Assessments of CFATF Member States.

'At this stage, the CFATF has not endorsed the AML/CFT Methodology for the 12 month IMF/WB Pilot Project ending in November 2003 but it acknowledges that the Methodology will continue to be used in assessments of its Member States as part of the Pilot Project.

'In response to the CFATF's desire for meaningful consultation, the representatives of the IMF/WORLD BANK have indicated that they will refer to their management and boards the CFATF's proposal for collaboration with the Working Group established by CFATF and comprising policy and technical personnel.

'The focus of the Working Group will be to:

• Review the process and outcome of the twelve (12) month Pilot Project as well as the details of its successor framework.
• Review the substance of the criteria in the Methodology Document which is premised on the fact that Money Laundering/Financing of Terrorism are risks to the global financial system. In this connection, the CFATF Secretariat will conduct a study that compares the incidence of money laundering and terrorist financing activity in CFATF Member States with the prevalence of such activity in developed countries to determine whether there is a real risk of CFATF Member States undermining the global financial system.
• Review the membership of the IMF/World Bank Assessment Teams and ensure that the Assessors are experienced in Money Laundering, Criminal Justice and Law Enforcement matters and include experts drawn from the Region.
• Address the approach adopted in the Methodology and its application to ensure its fairness and relevance to the circumstances of Member States and the disproportionate burdens which are placed on the human and financial resources of the CFATF Member States by the many assessments to which they must respond.

'The CFATF has announced that the members of the Working Group are The Bahamas, Antigua and Barbuda, Barbados, Cayman Islands, Guatemala and Haiti, and will be assisted by the CARICOM Secretariat.

'The CFATF responded positively to the suggestion by Canada that the CFATF continues to participate in the FATF Review Group of the FATF 40 Recommendations.

'The meeting also recommended that letters should be written by the Ministers of Finance of Member States to the President of the World Bank and the Managing Director of the International Monetary Fund and the Executive Directors representing CFATF Member States expressing the concern of each country about their desire for a meaningful consultative process in respect of the AML/CFT Methodology.'

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