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St Vincent Passes Money-Laundering Legislation

Tax-News.com, London

29 November 2001


On November 21, 2001 the Proceeds of Crime and Money Laundering Prevention Act (PCMLP) and the Financial Intelligence Unit Act (FIU) were passed unanimously in the St.Vincent and the Grenadines Parliament. These two pieces of legislation address specific recommendations of the Financial Action Task Force (FATF). These two Acts were drafted by Fitzroy Drayton of the Caribbean Anti- Money Laundering Programme (CALP). Prior to being enacted they were reviewed by a Parliamentary Select Committee, which was attended by stakeholders in the industry and members of the relevant authorities.

The passage of this legislation is a major step in the ambitious program of reform that has been laid out by the St. Vincent and the Grenadines Offshore Finance Authority (OFA) in collaboration with the government.

The PCMLP extends the definition of money laundering beyond the realm of drug trafficking to include all criminal conduct. It has extensive forfeiture and seizure provisions. Its aim is to defeat the money launderers by targeting them where it hurts most: in their pockets. The PCMLP establishes a special Fund where all the proceeds of confiscated criminal assets will be placed. This Fund will finance the Money Laundering Committee (which is also established by the PCMLP Act) as well as drug education and rehabilitation, and other specified anti money laundering initiatives

Under the PCMLP the court is allowed to look at all existing circumstances in determining whether the launderer knew that he was engaging in criminal conduct. The PCMLP Act also places a duty on financial institutions or persons engaged in 'relevant business activities' to report suspicious transactions to the FIU. This will place a duty on financial intermediaries, fiduciaries, lawyers, accountants and many other identified persons to be in effect money laundering watchdogs. The PCMLP Act also provides for money laundering to be included as one of the offences under the Fugitive Offenders Act and it enables the extradition of fugitives to countries even with whom there are no extradition treaties.

The FIU is a Unit that comprises specially trained police and customs officers as well as other professional persons whose duty will be to investigate suspicious activity reports made pursuant to the PCMLP Act. Also the FIU is charged with initiating investigations based on a request of a foreign FIU. The FIU is also a facility for sharing information related to the investigation of money laundering with the Commissioner of Police, foreign FIUs and other law enforcement authorities. The FIU has powers to require information from persons for the purposes of pursuing money laundering investigations. The FIU will also issue guidelines on money laundering.

Police officers in St. Vincent and the Grenadines have already received special training to work in the FIU.

Colin Williams, Acting Offshore Finance Inspector is hopeful that these positive steps will be recognised by the Financial Action Task Force as genuine steps towards addressing the very serious issue of money laundering.

The Prime Minister, Dr the Hon Ralph E Gonsalves, speaking during the debate on the two Bills in Parliament said that the era of secrecy in the offshore industry was over and that St. Vincent and the Grenadines would now find a competitive advantage in providing efficient services.


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