The International Monetary Fund recently published a report on the adherence of Barbados to the international standards governing the prevention of money laundering and terrorist financing.
The 'Report on the Observance of Standards and Codes on the FATF Recommendations for Anti-Money Laundering and Combating the Financing of Terrorism for Barbados' was prepared by the Caribbean Financial Action Task Force (CFATF), and contains recommendations on how the AML/CFT system could be strengthened.
The assessment was based on the information available at the time of the mission from December 4–16, 2006.
The report stated that:
"Barbados has criminalized money laundering (ML) broadly in compliance with international standards. However, while the definition of unlawful activity allows for a wide array of serious predicate offenses, human trafficking, corruption and bribery are not totally consistent with the requirements of the Palermo Convention."
"The low number of ML prosecutions and the factors attributed by the DPP (Director of Public Prosecutions) for this suggest an ineffective use of ML provisions. Terrorist financing (TF) is criminalized in accordance with the TF Convention. Relevant forfeiture/confiscation powers are provided for under separate statutes. While there is no specific legislative authority to freeze terrorist funds or other assets of persons designated in accordance with S/RES/1267(1999), relevant provisions to effect restraint of property can be utilized."
However, it observed that:
"While the Financial Intelligence Unit (FIU) carries out its functions competently, it is hampered by a lack of resources. The law enforcement authorities and the Office of Director of Public Prosecutions are under-resourced in relation to their functions. The competent authorities continue to engage in a wide array of joint law enforcement initiatives."
The CFATF-compiled report went on to suggest that:
"Preventive measures for financial institutions are comprehensive and generally in compliance with the FATF Recommendations. However, some of the requirements are set out in laws and regulations, while others are only enforceable on the licensees of the Central Bank of Barbados (CBB) and the Supervisor of Insurance."
"Regulation and supervision of the financial sector is shared among four regulatory authorities with varying supervisory powers. Except for trust and company service providers who are licensees of the CBB, there are no measures to monitor and ensure compliance of DNFBPs with AML/CFT requirements. While the Registrar of Companies maintains a register with information on directors and registered offices of companies, there is no legislative requirement to disclose beneficial ownership information."
And continued:
"Domestic co-operation among law enforcement and supervisory authorities and other relevant government agencies is facilitated through the Anti-Money Laundering Authority (AMLA). While the Mutual Assistance in Criminal Matters Act (MACMA) allows for a wide range of mutual legal assistance for criminal matters, the instrumentalities of ML and TF are not included. Requests for mutual legal assistance are routed through the Attorney General who is the Central Authority."
Commenting in detail on the preventative measures in place, the report revealed that:
"Customer due diligence measures are generally comprehensive and include customer identification, beneficial ownership requirements, ongoing due diligence, measures for politically exposed persons, correspondent banking and new technologies and non-face to face customers. Requirements for introduced business are also detailed. These measures are generally applied by all financial institutions."
But reiterated that:
"The main shortcoming is that some requirements are not set out in law or regulation as required by the FATF standards and others are only enforceable on the licensees of the CBB and the Supervisor of Insurance."
It continued:
"While there are no secrecy laws inhibiting the implementation of the FATF Recommendations, certain regulatory authorities are limited in their ability to either share or access information. Recordkeeping requirements are extensive and generally observed. However, there is no requirement in law or regulation for account files and business correspondence to be retained for five years after termination of the business relationship or for financial institutions to ensure that records are available on a timely basis to competent authorities."
The full text of the report on Barbados' adherence to the FATF anti-money laundering standards can be found in the Tax-News Resources section.
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