Almost there
Jamaica one step closer to leaving money laundering watch list
JAMAICA has moved one step closer to exiting the Financial Action Task Force (FATF) “grey list” following efforts to deal with the deficiencies which caused the country to be singled out as not adequately dealing with money laundering/terrorism financing, and now awaits an on-site examination to confirm the changes.
The update came on Friday following the FATF’S three-day plenary session at its headquarters in Paris France. A country which demonstrates significant completion of its action plan qualifies to receive an on-site visit by the intergovernmental organisation for consideration to be removed from the list. The latest update saw Barbados, Cayman Islands, Gibraltar, Uganda and United Arab Emirates (UAE) being removed from the grey list following their on-site visits. Kenya and Namibia were added to the list which now totals 22 jurisdictions.
“This week at the FATF plenary, the FATF determined that Jamaica has now substantially completed [work] on its action plan and because of the substantial progress that it’s achieved, that this then merits an on-site visit. The on-site team will essentially go down and they would need to satisfy themselves that there is high level political commitment on the part of the Jamaican Government to fully see through the action items that have been identified and the other important task the on-site team will have is to verify the progress that has been achieved and ensure that these are sustainable into the future,“said FATF President T Raja Kumar to a query by the Jamaica Observer on Friday.
If Jamaica demonstrates the required level of commitment during the on-site visit, it could be removed by the FATF’S next plenary session between June 23 and June 28 which will be held in Singapore. This would give Jamaican businesses more breathing room to do business without other global partners having a possible stigma with its association on the grey list.
Jamaica was added to the FATF’S jurisdictions under increased monitoring list in February 2020 and was warned multiple times about being moved to the dreaded “black list” or jurisdictions subject to a call for action for missing its January 2022 deadline. This black list is currently occupied by Iran, Myanmar and the Democratic People’s Republic of Korea (DPRK), better known as North Korea. Myanmar is currently facing enhanced due diligence on transactions with other countries, subject to the allowance for remittances, legitimate non-profit activity and humanitarian assistance. This means that other countries might choose to avoid doing business with the country due to the risk posed by Myanmar’s strategic deficiencies in its AML/ CFT procedures. However, Jamaica avoided that fate and has significantly addressed 13 action items agreed to in its original action plan which was disrupted by the COVID-19 pandemic.
Some of the changes made over the last four years include the regulation of the microcredit sector which now has 43 licensed firms; the regulation of corporate and trust service providers which has 25 licensed firms; bringing designated non-financial businesses and professions (DNFBPS) such as attorneys-at-law under the AML/CFT regime; and enhancing the beneficial ownership framework through legislation and operational changes at the Companies Office of Jamaica. Jamaica’s financial regulators have also switched to a riskbased supervision regime with the Financial Services Commission (FSC) forming a partnership with the Toronto Centre to host a week-long training session at the Bank of Jamaica (BOJ) last week.
“Jamaica has actually taken major positive steps towards improving its anti-money laundering and combatting the financing of terrorism regime. So, again, I think there’s a good piece of news here that the on-site visit has been granted, but I think it’s also very important that Jamaica demonstrates strong political commitment and very importantly, that they continue to sustain the work and momentum that has been generated to improve and enhance their system,” Kumar added in his remarks.
When Sunday Finance reached out to the Minister of Finance Dr Nigel Clarke for a response, he noted that he’d provide a response by the end of Friday. A response was still pending up to press time.
“Exiting the grey list doesn’t mean the UAE has a perfect system, but the UAE has committed to essentially continuing its virtuous path on further enhancing its AML/CFT regime. I encourage the UAE to continue along this virtuous path,” Kumar explained to a journalist who asked for additional clarity on the UAE which they noted had been under their radar for the different money laundering cases associated with Dubai.
The FATF released a statement on the Russian Federation which continues to remain a suspended member of the international body. FATF also encouraged members to continue seeking to regulate the virtual asset service providers (VASPS) while asking that AML/CFT rules be applied to virtual assets without further delay. There was also an update surrounding beneficial ownership and transparency of legal arrangements which will be published by the end of this month. FATF also welcomed public consultation on cross-border payment systems.
FATF also appointed its Mexican Vice-president Elisa de Anda Madrazo as its next president on July 1 for a fixed two-year term. Singaporean Kumar’s term will end on June 30 with the next plenary session to be his sixth and final session as president.
“I think overall, we’ve made very strong progress in quite a number of areas. I’ve shared with you how, on the beneficial ownership front, we have significantly enhanced global standards, and this will really enable law enforcement and national authorities to basically lift the veil and establish how criminals and terrorists are essentially hiding their assets behind shell companies and trusts. So, this is again, I think, a major step forward in the fight against financial crime,” Kumar ended.