AML Risks for Caribbean

Transcript

1. 2nd Annual AML & Anti-Financial Crime Conference Country Risks for the Caribbean Prepared by Christine Duhaime, BA, JD, CAMS Created for ACAMS, 2nd Annual Caribbean Conference - 1 - Country Major Money Laundering Country1 Major Drug Producing and Drug Transit Country2 US President’s Country of Major Concern3 Narco-Trafficking Risks Money Laundering Risks & Methods of Money Laundering Other Antigua and Barbuda Yes No No • Transshipment point for cocaine destined to US • Importation of illegal marijuana from Canada • Insufficient maritime resources to intercept go-fast drug boats and narco- submarines • Corruption, drug trafficking and fraud are the major predicate offences • Major money laundering methods are wires, structuring and shell entities with shell banking • Online gambling sites illegally targeting other counties are a major risk factor • Online gambling sites that illegally service US and other countries have safe harbor in Antigua and Barbuda • Over 5,000 shell companies but only 1/5 active • Has more citizenship investment agencies than banks – citizenship investment programs are very high risk for financial crime Aruba Yes No No • Used by narco-traffickers (primarily cocaine from Venezuela and Colombia) as transit location for cocaine arriving via fishing vessels, which is then trafficked to other countries • Known as transit place for proceeds of crime from drug trafficking with proceeds moving to South America • Pervasive bulk cash smuggling • Gold transfers pervasive by TCOs • STRs not at global standards • Venezuelan nationals are buying real estate with proceeds of crime • Money illegally exited from China starting to surface in Aruba with Chinese foreign nationals Bahamas Yes Yes Yes • Drugs from Jamaica are trafficked to Bahamas via go fast drug boats and small fishing vessels • Private jets and sailing, fishing and go- fast drug boats transport significant • Banks, land-based casinos and online gambling websites are high risk money laundering activities • Most high risk are online gambling websites situated in Bahamas. For example, online casinos processed • Criminal justice system lacks resources • Over 27,072 shells and many more domestic companies owned by foreigners • US govt recommends Bahamas investigate and prosecute Bitcoin and digital currency crimes specifically 1 INCSR Per Foreign Assistance Act of 1961, §481(e)(7), means a country whose financial institutions conduct transactions for significant illegal international narco-trafficking. 2 INCSR Per Foreign Assistance Act of 1961, §481(e), means a country that allows the transportation of illegal narcotics and is a major producer of illegal narcotics. 3 INCSR Per Foreign Relations Authorization Act, means a country designated for heightened risks and concern.
2. 2nd Annual AML & Anti-Financial Crime Conference Country Risks for the Caribbean Prepared by Christine Duhaime, BA, JD, CAMS Created for ACAMS, 2nd Annual Caribbean Conference - 2 - Country Major Money Laundering Country1 Major Drug Producing and Drug Transit Country2 US President’s Country of Major Concern3 Narco-Trafficking Risks Money Laundering Risks & Methods of Money Laundering Other volumes of illegal drugs to US on behalf of TCOs payments of US$3.2 billion in 9 months, majority illegally from countries targeted for online gambling - annual GDP is only US$12 billion. • 93% of all payments wired are for online gambling, yet no STRs filed in respect of online gambling. • Popular trust jurisdiction which presents major transparency concerns for financial crimes, sanctions and terrorist financing • Private banking of PEPs poses high risks without attendant oversight or investigations capabilities • Deep financial ties to Canada in financial services, resulting in closed financial services sector with respect to PEPs Barbados Yes No No • Transshipment point for cocaine destined for other countries • Importation of illegal marijuana Insufficient maritime resources to intercept go-fast drug boats and narco- submarines • Drug trafficking is major predicate offence N/A BVI Yes No No • Risks arise from financial services being used or abused for illicit activities • Significant money laundering risks in financial services and shell companies • Corporate statute allows no disclosure of authorized share capital, similar to British Columbia, posing money laundering risks • Political corruption risks • Favored country for shells for PEPs from China • Over 1,000 trusts which obfuscate crimes and impede investigations • Population is 29,000 yet there are 400,000 shells and other private companies • Favored nation for oligarch, kleptocrats, PEPs to set up shells to obfuscate control
3. 2nd Annual AML & Anti-Financial Crime Conference Country Risks for the Caribbean Prepared by Christine Duhaime, BA, JD, CAMS Created for ACAMS, 2nd Annual Caribbean Conference - 3 - Country Major Money Laundering Country1 Major Drug Producing and Drug Transit Country2 US President’s Country of Major Concern3 Narco-Trafficking Risks Money Laundering Risks & Methods of Money Laundering Other persons for banking services to shield money movements Caribbean Netherlands No No No N/A N/A N/A Cayman Islands Yes No No N/A • Money laundering risks are primarily from tax evasion, foreign corruption, oligarchs, kleptocrats, drug trafficking • Significant jurisdiction for shell companies and trusts from PEPs from Asia to hide or obfuscate proceeds of corruption • Population is 64,000 with 110,451 shells and other companies • Major shell jurisdiction with 144 corporate service providers • 122 banks – way out of proportion to population to service foreign shells Cuba Yes No No N/A • Black market operations pose greatest threat to financial system in Cuba N/A Curaçao Yes No No • Narco-trafficking and human trafficking from Venezuela • Risks and criminality is declining but still a transshipment point of illegally mined gold and illegal drugs • Unlicensed money lenders, drug trafficking and gold sales are main sources of money laundering • Online illegal gambling sites also exist which are used to launder money N/A
4. 2nd Annual AML & Anti-Financial Crime Conference Country Risks for the Caribbean Prepared by Christine Duhaime, BA, JD, CAMS Created for ACAMS, 2nd Annual Caribbean Conference - 4 - Country Major Money Laundering Country1 Major Drug Producing and Drug Transit Country2 US President’s Country of Major Concern3 Narco-Trafficking Risks Money Laundering Risks & Methods of Money Laundering Other Dominica Yes No No • Transshipment point for cocaine destined for US • Importation of illegal marijuana Insufficient maritime resources to intercept go-fast drug boats and narco- submarines • Cybercrime and narco-trafficking are major predicate offences • Investor immigration programs with lax vetting which advertise to Iranian nationals and other sanctioned countries pose enhanced risks for terrorist financing, sanctions avoidance and money laundering • Over 19,000 shell companies Dominican Republic Yes Yes Yes • Primary source of cocaine to US imported using go-fast drug boats and commercial air and ship containers • Corruption of law enforcement and judiciary is significant risk factor • Dominican nationals are hired to transit illegal narcotics from Sint Maarten to US via the sea • Pervasive corruption across all sectors, the presence of drug cartels, black markets and weak controls make it high risk for money laundering • Proceeds of crime mostly arise from illegal drug trafficking, tax evasion, corruption, fraud and weapons smuggling, and casinos • Officials received training on predicate offences and financial crimes from US government Grenada No No No • Transshipment point for cocaine destined for US • Importation of illegal marijuana from Canada • Insufficient maritime resources to intercept go-fast drug boats and narco- submarines N/A N/A
5. 2nd Annual AML & Anti-Financial Crime Conference Country Risks for the Caribbean Prepared by Christine Duhaime, BA, JD, CAMS Created for ACAMS, 2nd Annual Caribbean Conference - 5 - Country Major Money Laundering Country1 Major Drug Producing and Drug Transit Country2 US President’s Country of Major Concern3 Narco-Trafficking Risks Money Laundering Risks & Methods of Money Laundering Other Guadeloupe No No No N/A N/A • Officials received training on predicate offences and financial crimes from US government Haiti Yes Yes Yes • Drugs from Jamaica are trafficked to Haiti via go-fast drug boats and small fishing vessels • Significant volume of illegal drugs from South America illegally imported to Haiti and then to US • Gang activities, narco-trafficking, corruption and bulk cash smuggling represent some of the major money laundering risks • 63% of bank deposits in Haiti are in foreign currency – inconsistent with economy or country’s activities but consistent with foreign generated proceeds from narco-trafficking • Unlicensed land-based casinos operate in Haiti, and are a source of money laundering • Severe lack of maritime resources to address drug smuggling • Family of govt leader of Venezuela able to conduct major drug trafficking in Haiti unimpeded Jamaica Yes Yes Yes • Largest source country in Caribbean of illegal marijuana • Jamaican gangs exchange drugs for weapons • Container ships used for major drug smuggling from Jamaica and go-fast drug boats used to import illegal drugs from South America into Jamaica for transshipment • Organized crime, fraud, corruption, cybercrime and small arms trafficking are the major risks to Jamaica in terms of illegal activities and proceeds of crime • Violent organized crime groups largely involved in money laundering • Like Dominican Republic, public and private corruption facilitate illicit funds and activities Martinique No No No N/A N/A N/A Montserrat No No No N/A N/A N/A
6. 2nd Annual AML & Anti-Financial Crime Conference Country Risks for the Caribbean Prepared by Christine Duhaime, BA, JD, CAMS Created for ACAMS, 2nd Annual Caribbean Conference - 6 - Country Major Money Laundering Country1 Major Drug Producing and Drug Transit Country2 US President’s Country of Major Concern3 Narco-Trafficking Risks Money Laundering Risks & Methods of Money Laundering Other Puerto Rico No No No • Receives narcotics illegally smuggled from Sint Maarten brought in by nationals from the Dominican Republic Money laundering risks arise primarily from narcotics trafficking • Well-patrolled waterways by US Coast Guard, including 248 aircraft and 331 marine vessels Saint Barthelemy No No No N/A N/A N/A Saint Kitts and Nevis Yes No No • Transshipment point for cocaine destined to US • Importation of illegal marijuana from Canada • Insufficient maritime resources to intercept go-fast drug boats and narco- submarines • Economy is reliant on citizenship investment program • St. Kitts and Nevis promotes citizenship in China and Middle East and was a favored place to buy a passport to the Commonwealth • St. Kitts and Nevis passport program subjected a number of risks, including by allowing the movement of proceeds of corruption and facilitating sanctions avoidance. Several countries clamped down, requiring visas from passport holders of this country to control criminality Saint Lucia Yes No No • Transshipment point for cocaine destined to US • Importation of illegal marijuana from Canada • Insufficient maritime resources to intercept go-fast drug boats and narco- submarines • Money laundering risks arising mainly from drug trafficking and offshore corporate shells • Economic passport system is high risk for PEPs, proceeds of corruption and money laundering • 3,800 shells • Country allows nominee directors of companies Saint Martin No No No • Used by Dominican Republic nationals to smuggle cocaine to US as a transit location • Casinos, money laundering, as well as tax evasion, are risks N/A
7. 2nd Annual AML & Anti-Financial Crime Conference Country Risks for the Caribbean Prepared by Christine Duhaime, BA, JD, CAMS Created for ACAMS, 2nd Annual Caribbean Conference - 7 - Country Major Money Laundering Country1 Major Drug Producing and Drug Transit Country2 US President’s Country of Major Concern3 Narco-Trafficking Risks Money Laundering Risks & Methods of Money Laundering Other Saint Vincent and Grenadines Yes No No • Transshipment point for cocaine destined to US • Importation of illegal marijuana from Canada • Insufficient maritime resources to intercept go-fast drug boats and narco- submarines • Money laundering risks arise mainly from drug trafficking and offshore corporate shells • 4,200 shell companies • Country received training on predicate offences and financial crimes from US government Sint Maarten Yes No No • Major transshipment country for cocaine, heroin and marijuana destined for Puerto Rico, Virgin Islands and EU • Dominican Republic foreign nationals in Sint Maarten drive go-fast drug boats to US from French side of Island, using unlicensed marinas N/A N/A Trinidad and Tobago Yes No No • Porous borders facilitate transit of illegal drugs, primarily cocaine destined for US and EU • Used by TCOs as transshipment country and money laundering • Casinos and emergence of digital currencies noted as risks • Entrenched corruption impedes rule of law and law enforcement • Law enforcement resources lacking Turks and Caicos No No No N/A N/A N/A Virgin Islands No No No • Illegal drugs from Sint Maarten are transited to Virgin Islands for US market N/A N/A