The authorities here, along with those involved in the international business sector, are perplexed at a United States (US) report that lists Barbados as a “major money laundering country in 2016”.
While Government has dismissed the report as baseless, Executive Director of the Barbados International Business Association (BIBA) Henderson Holmes wants the Americans to present the evidence to support the charge.
The International Narcotics Control Strategy Report on Money Laundering and Financial Crimes Volume II, which listed over 80 countries and territories, did not say how the US State Department had determined the countries that appeared on the list, which did not include the US.
However, the report said an anti-money laundering deficiency here was that the criminal law limited Government’s ability to seize assets acquired through criminal activity, without first obtaining a conviction.
“The Government of Barbados should continue developing new non-conviction-based asset forfeiture laws to increase the efficacy of asset recovery procedures,” it said.
It also stated that Government should allot resources to ensure the Financial Intelligence Unit (FIU), law enforcement, supervisory agencies, and prosecutorial authorities were fully staffed and had the capacity to perform their duties.
“The FIU is administrative in nature, which means it does not have the capacity to do investigative work or resolve legal issues. The Government should consider taking a more aggressive approach to conducting examinations of the financial sector and asserting more control over vetting and licensing of offshore entities,” it said.
The March 2017 report also recommended the strengthening of supervision of non-profit organizations, charities, designated non-financial business professions and money transfer services. This, it said, could be done through increased reporting requirements and oversight.
“Information sharing among regulatory and enforcement agencies also needs improvement. Barbados should become a party to the UN Convention against Corruption,” it added.
The report identified the island as a regional financial centre with a sizeable international business presence, adding that the country’s susceptibility to money laundering was “primarily associated with the domestic sale of illegal narcotics and the laundering of foreign criminal proceeds”.
“There are some reports of proceeds from illicit activities abroad being laundered through domestic financial institutions,” it said.
However, Holmes, a senior executive in the international business sector, told Barbados TODAY he could not understand why the State Department would list Barbados as a major money laundering country without producing evidence to support it.
With no mention of specific cases in the report, Holmes described it as nothing more than “a baseless accusation”.
“It may be true that we need tighter laws and regulations, but the question is, is Barbados an environment where one who wants to launder money would come to do it? The volume of transactions in financial business in Barbados is too low. We already know that when it comes to money laundering people go to areas where there are high volumes of transactions. So where is the evidence?” said Holmes, while suggesting that domestic sales of illegal narcotics takes place in virtually every country.
Apart from Barbados, other Caribbean countries on the list include Antigua and Barbuda, the Bahamas, Dominica, Haiti, Guyana, Jamaica, St Kitts and Nevis, St Lucia, Trinidad and Tobago and St Vincent and the Grenadines.
Attorney General Adriel Brathwaite had a similar reaction, describing Barbados’ listing as misleading.
In a statement released by the Barbados Government Information Service (BGIS), Brathwaite said while the report cited a number of “generic methods” of money laundering that may be found in any country, the island’s best intelligence did not support the view that they were at proportions which would have a significant impact on the local economy, or cause the faintest ripple in the international financial sector.
“Criminal activity in Barbados is immaterial as far as the international community is concerned. Funds which may be laundered in Barbados are minuscule when measured on the scale of international laundering. Barbados is not a world financial centre and therefore any larger than usual financial transaction which takes place here will receive immediate attention, both here and abroad. Large-scale launderers know what that the place to hide a treat is in the forest. Barbados does not fit the bill,” the statement said.
However, Brathwaite admitted that the illegal drugs trade, which gives birth to other criminal activities, was the crime which was of greatest concern to the authorities.
“The drugs trade is also the most profitable acquisitive crime on the island; hence, it has potential implications for the financial sector. These threats are understood and are being addressed with some degree of success,” the BGIS release stated.
The release pointed out that Barbados had deployed significant resources to combat criminal activity of every description, in particular, to combating financial crime, including money laundering and fraud. This was something the report also acknowledged.
The Attorney General said the authorities here would continue to do all in their power to ensure that the country remains “a clean and safe jurisdiction in which to live, work and do business”.
Minister of International Business Donville Inniss said he supported Brathwaite’s comments and had nothing to add.