(JAMAICA OBSERVER) – Jamaica is among three Caribbean Community (CARICOM) countries that were on Thursday named in a new European Commission list of high-risk third world countries with strategic deficiencies in their regime regarding anti-money laundering and countering terrorist financing.
Finance Minister, Dr Nigel Clarke, said the island ended up on the list because the Financial Action Task Force (FATF) focused on countries where the economy’s size is above a certain threshold – having US$5 billion of financial assets using a monetary measure known as M2.
Clarke noted that in 2019, FATF changed this measure to what is known as M3, which is a broader measure of the economy.
He explained that this means for the first time, Jamaica exceeded the US$5 billion threshold, which meant Jamaica would be included in the list of countries that FATF would focus on and monitor, a process he described as ‘greylisting’.
Under the Anti-Money Laundering Directive (AMLD), the European Union (EU) said it revised its list, taking into account developments at international level since 2018 and that the “new list is now better aligned with the lists published by the FATF”.
However, the finance minister said the Government will be taking action to remedy deficiencies in Jamaica’s framework for addressing UN targeted financial sanctions related to terrorism; amend laws governing the regulation of trusts and the non-profit sectors in order to improve AML/CFT compliance.
He said Jamaica would also seek to ensure an increase in money-laundering investigations that use financial intelligence, and amend the Companies Act to ensure that beneficial ownership disclosure standards are updated to be consistent with FATF standards.
“Jamaica has until late 2021 to complete its action plan. Once this is done, Jamaica will be removed from FATF’s grey list and the reversal of the EU’s action will also occur,” Clarke told Parliament on Tuesday.
The Bahamas and Barbados were also on the blacklist.
Bahamas Attorney General and Minister of Legal Affairs, Carl Bethel said that Nassau “regrets” the decision adding “this is especially so in light of an earlier public commitment made by the EU commission to engage in discussions with potentially affected countries prior to placing them on their blacklist”.
“To date The Bahamas has not received any advance notification or warning at any diplomatic level. Bahamas maintains that it is attaining the highest standards in the fight against money laundering, terrorist financing and other identified risks,” Bethel said.
Bethel said that it should also be noted that the FTAF at its January 2020 Plenary in France, “agreed that The Bahamas should begin the exiting process from the FATF ICRG Grey List and had agreed to an on-site visit, which had to be postponed due only to the COVID-19 pandemic”.
“The Bahamas remains fully committed to the highest standards of compliance with every internationally agreed standard of conduct,” he added.
Barbados Attorney General and Minister of Legal Affairs, Dale Marshall in condemning the EU action said it amounted to “a little more than a conviction without a trial”.
“We have been given no details of this, and in fact the first time we are hearing of it is through the overseas press,” Marshall said.
“Even the mighty must abide by the rules of natural justice, and give us an opportunity to be heard. We do not have a seat at their table when our standing is being discussed, and if you say that we are a non-cooperative jurisdiction, then tell us in which areas you consider that we are not cooperating,” Marshall continued, adding that “this approach of the EU is exactly the approach that was taken against us last year in relation to what they deemed to be harmful tax practices”.
Marshall added that Barbados has made significant strides over the last two years with its anti-money laundering efforts which were recognized and lauded by the FATF.
“It was acknowledged that we have made significant progress towards addressing a number of the recommendations in the mutual evaluation report to improve both technical compliance and effectiveness, including updating the National Risk Assessment and developing mitigating measures.
Further, an application for upgrades in a significant number of technical compliance ratings is in progress,” Marshall added.