In a fight for our survival

When the Financial Action Task Force (FATF) updated its grey list of countries it regarded as still not doing enough in the fight against money laundering and terrorist financing last Friday, Barbados’ name was on the infamous register.

This is a situation about which we should all be concerned due to the enormous negative impact on our economy and ability to conduct financial services.

Years ago, the Mighty Gabby penned a popular tune called The List. It was a song that parodied the rumour mill, at that time, of those suspected of being infected with a deadly disease.

The FATF has created what is nothing short of a list designed to name and shame. Barbados is really not in very good company. On the grey list along with Barbados are 22 other states, including Yemen, Uganda, Syria, South Sudan, Mali, Haiti, Burkina Faso, Croatia, and Bulgaria, among others.

For those who may not be familiar with the FATF, it is an intergovernmental organisation headquartered in France. Founded in 1989, it is a creature of the Group of Seven industrialised nations, namely the United States of America, Canada, France, the United Kingdom, Germany, Italy, and Japan, along with the European Union.

According to the FATF, its role is to continuously monitor how criminals and terrorists mobilise, use and move their funds. The body says that while countries institute measures to disrupt the flow of dirty money, criminals find alternative ways to launder their ill-gotten gains.

An important part of its work also involves making recommendations that coordinate what it calls a “global response” to prevent organised crime, corruption and terrorism.

When the FATF puts a country on its grey list, for example, it is essentially a watch list which the FATF will institute “enhanced monitoring”. It also means the country has committed to “swiftly resolve” the areas which the FATF identified as deficient in their regimes to counter money laundering, terrorist financing and proliferation financing, and to do so within a specific timeframe.

In its most recent update, the Cayman Islands, Panama, Jordan and Albania were removed from the FATF grey list. We are happy for those jurisdictions that can now continue to offer their financial services and conduct business with financial institutions around the world without the cloud of being deemed a conduit for money laundering and illicit financial dealing.

Barbados has come to rely heavily on its global business sector, which has become an important contributor to the government’s tax revenue base and for the generation of foreign exchange.

In fact, during the height of the pandemic when tourism was limping along, it was the global business sector that provided significant foreign exchange for the economy and tax revenue.

At the recently concluded Global Business Week Conference at Hilton Barbados, Jamar Arthur-Selman, president of BIBA, the Association for Global Business, highlighted the urgency of getting the island removed from the grey list.

He pointed to the fact that Barbados was successful in its bid to be removed from the European Union blacklist of countries deemed non-cooperative in matters relating to taxation.

“Blacklisting a nation is not simply placing it on an adverse list that shames it. Blacklisting has very serious economic and financial implications as companies registered here would face enhanced scrutiny and due diligence,” he told conference attendees.

However, he also outlined the implications of being on these adverse lists. They range from restricted access to financing from certain institutions to the likely loss of new foreign business, and of course, reputational damage.

In addition, being black or grey-listed has been identified as a major trigger for the loss of correspondent banking relations.

Mr Arthur-Selman, while praising the sterling efforts of the government and its many agencies involved in preparing and negotiating with representatives of the FATF, also issued a warning: “We truly, in many instances with these matters, are fighting for the survival of our country, and to maintain the global business sector, which is the second pillar of our services-based economy.”