Launderers’ list

Barbados has made some progress in improving its anti-money laundering (AML) regime, but remains one of the major money laundering countries in 2018, according to the latest International Narcotics Control Strategy Report.

The document, which was released by the United States Department of State, named Barbados among over 82 countries including the US, which it identified as major money laundering countries.

“A major money laundering country is defined by statute as one ‘whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking’,” it said.

“Barbados has made limited progress improving its anti-money laundering regime. Barbados has completed an initial risk assessment identifying drug trafficking as the main source of money laundering in the country and is in the process of completing a more comprehensive National Risk Assessment (NRA),” it pointed out.

The document said the more comprehensive NRA was being carried out amid concerns it may not have been sufficient to identify significant national money laundering risk and vulnerabilities.

The report described Barbados as having an active international financial services sector, but no free trade zones nor economic citizenship programme.

It said the country reported that the major source of illicit funds is from drug trafficking, but pointed out that several steps were being taken to arrest the issue.

“National measures taken to address this risk include targeted controls at the points of entry, increases in maritime patrols in the waters around Barbados and the use of intelligence by competent authorities,” it noted.

At the same time, the report pointed out that “The extensive use of cash in routine business transactions and the comingling of illicit and legitimate funds in the financial system pose additional money laundering challenges.”

According to the report the high volumes of US currency in circulation in Barbados related primarily to tourism, but pointed out that Barbados Government officials and US law enforcement representatives have assessed that “a substantial quantity” of these dollars do not come from illicit activity.

“Barbados does not have any offshore banks or other institutions that would put it at higher risk than its Eastern Caribbean counterparts,” the report added, while acknowledging that the country had a number of AML laws in place.

Indicating that the Proceeds of Crime Act still did not include a provision for cash seizures, it said Barbados “has used its exchange Control Act for forfeitures” and recognises that this practice is “insufficient” and is drafting new legislation to address this issue.

“Additionally, a new NRA is still underway and could identify additional deficiencies,” it added.

The US Department of State recommended that Barbados address several areas in order to align with international best practices, including completing the new NRA, improving the monitoring process of politically exposed persons, correcting technical deficiencies in the enforcement of sanctions, fostering national cooperation and confiscating assets.

“The new Government in Barbados, with the support of donors, is exploring the establishment of a civil asset recovery division. Barbados has signed but not ratified the United Nations Convention Against Corruption,” it said.

In its drug and chemical control report Barbados is said to be planning to allow cultivation, domestic use, and export of medicinal marijuana under licensing controls to countries were medical cannabis is legal.

It said the country reported 105 drug-related arrests with 105 prosecutions during the first nine months of last year.

At the end of last year the Royal Barbados Police Force (RBPF) destroyed some 132 pounds of cocaine and 897 pounds of marijuana taken from seizures around the country, adjudicated cases, ports of entry and work of the Coast Guard and sea police, worth an estimated street value of over $4.8 million.

The document pointed out that while some countries reported “a growing market for strains of marijuana from the United States and Canada and some reported an increase in the use of commercial cargo airlines and different types of marine vessels for transshipment, Barbados reported more small-scale trafficking in 2018.

Last year’s report said narcotics trafficking, money laundering, and firearms trafficking were major sources of illicit funds in Barbados.

At that time, it said in addition to financial institutions, money was being laundered through
a variety of businesses and through the purchase of real estate, vehicles, vessels and jewellery.
This was based on a review carried out the previous year.
marlonmadden@barbadostoday.bb