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Government given “criminal money laundering” deadline

deadlineclockGovernment has another two months to prove that, as promised, it has taken specified measures to counter “criminal money laundering” and “terrorism financing”.

The Caribbean Financial Action Task Force, whose 29 members include Barbados, said the island’s failure to proclaim the Prevention of Corruption Act and enforce other core and key recommendations, some involving the Central Bank of Barbados and Financial Services Commission, by November might stall its advancement in a process involving the Financial Action Task Force based in France.

Barbadian officials last reported to the CFATF on progress on its 2008 Mutual Evaluation Report in the island’s Nine Follow Up Report dated May 2013.

CFATF’s main objective is to “achieve effective implementation of and compliance with its recommendations to prevent and control money laundering and to combat the financing of terrorism”.

While noting that Barbados enactment of the Money Laundering and Financing of Terrorism (Preventions and Control) Act in 2011 had “resulted in substantial improvement in the level of compliance with the examiners’ recommendations”, the regional organisation said some key provisions were still outstanding.

Barbados’ lack of full compliance with the fifth core recommendation is an issue that is generating the greater concern, specifically what the CFATF calls the absence of “a legislative requirement for financial institutions to determine who are the natural persons that ultimately control the customer, and defining the term ‘beneficial ownership’ in the MLTFA with regard to the level of ownership”.

It said that while Government had argued that the FATF’s revised recommendations meant Barbados no longer had to take such action, the CFATF countered that “reference to the revised FATF recommendations is not acceptable since the follow-up process is part of the Third Round of Mutual Evaluations and compliance is assessed using the Methodology utilised in the Third Round based on the previous Forty Recommendations and the Nine Special Recommendations”.

“Consequently, this recommendation remains outstanding,” it said in its recent Barbados report.

Another provision still outstanding was a requirement for “the extension of the enforceability of specific customer due diligence requirements from the licensees of the Central Bank of Barbados and the Supervisor of Insurance to all financial institutions”.

These requirements included “updating of data or documents collected under the customer due diligence process, measures for high and low risk categories of customers, and timing of verification and failure to complete customer due diligence and application of customer due diligence requirements to existing customers”.

Regarding Barbados, it said: “While the Prevention of Corruption Act has been enacted, it still has to be proclaimed to be considered enforceable and therefore valid for meeting the Financial Action Task Force requirements.

“The other reported measures such as the draft regulations to the International Corporate and Trust Service Providers Act and the on-site examination activity of the Financial Services Commission while demonstrating Barbados’ continuing efforts to comply with outstanding recommendations have no effect on compliance at this time.”

CFATF officials said they were recommending that the plenary “consider whether Barbados should be placed in the first stage of the enhanced process and a letter from the CFATF chairman sent to Barbados drawing attention to the non-compliance with the FATF Recommendations”.

“Barbados should report back to the plenary in November 2013,” it added. (SC)

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