Islands in the sun

Awash with recently-passed legislation and newly-established Financial Investigation Units, the small nations of the Caribbean have transformed their money laundering controls since the mid-1990s. In 2000, five Caribbean island jurisdictions made up one-third of the Financial Action Task Force (FATF) list of fifteen non-cooperative countries and territories, each of them with ‘serious systemic problems,’ in the words of a FATF review of that year. All have now been de-listed, as has Grenada, which was added to the FATF’s list in September 2001, although careful international monitoring of these and other jurisdictions is a continuing process. In this extended two-part survey, Mark Wilson,a specialist in Caribbean affairs, based in Port of Spain, Trinidad and Tobago, examines local and regional anti-money laundering frameworks and specific vulnerabilities.

The US State Department’s International Narcotics Control Strategy Report (INCSR), published annually on 1 March, gives one useful assessment of the extent of money laundering in the Caribbean. It lists ‘jurisdictions of primary concern’, where the volume of funds processed is thought to be significant. This may be a function of the sheer size of the financial sector, rather than of poor regulation, so that internationally, the US itself is listed, as are the UK and Canada. In the Caribbean, the ‘primary’ list includes two of the largest offshore financial centres, the Cayman Islands and the Bahamas; and, alone of the smaller financial centres, Antigua-Barbuda. Until this year, Dominica was also in this category.