Published On: Mon, Apr 30th, 2018

Big steps towards full compliance anti-money laundering regulations

moneylaunderingWILLEMSTAD - Significant steps have been made in Curaçao’s efforts towards combatting money laundering and terrorism financing. Currently, the internet gaming laws are being revised and this year an Anti-Money Laundering National Risk Assessment will be conducted supported by the World Bank. “Combatting money laundering and terrorism financing is a continuous process and it requires a good working relationship between the public and private sector. It’s a long game and we’re making strides,” says Anuschka Cova, CIFA chairman. The International Narcotics Control Strategy Report of the United States Bureau of International Narcotics and Law Enforcement Affairs issued in March supports this statement.

The publication of the International Narcotics Control Strategy Report of the Bureau of International Narcotics and Law Enforcement Affairs in the United States has produced many media headlines claiming that Curaçao is one of the major money laundering jurisdictions in the world. Anuschka Cova of the representative association of professionals in the international financial services sector in Curaçao, CIFA (Curaçao International Financial Services Association), regrets that the local media has taken the statements made in aforementioned report out of context. “The report does mention that there are some vulnerabilities that need to be addressed, however that’s one paragraph out of the three-page summary on our jurisdiction,” says Cova.

The summary Cova refers to states that Curaçao is a regional financial center and a transshipment point for drugs from South America and that money laundering is primarily related to proceeds from illegal narcotics, although recently unlicensed banking through Chinese mini-markets has also been identified as a source for laundered funds. Most notable, the report states that these resulting in investigations and arrests. The report also refers to the high-profile money laundering and predicate crime investigations recently conducted where numerous former officials were investigated, charged, or convicted, including the former prime minister and former president of the central bank. The report acknowledges the two multi-year money laundering prosecutions that are ongoing as well as the conviction that was confirmed by a higher court in 2017. Those statements in the report confirm that important improvements have been made in the enforcement of the comprehensive anti-money laundering legal framework that is already in place.

The report also mentions the ongoing activities under the MOU with the United States for joint training activities and sharing of information in the area of criminal investigation and law enforcement signed in 2016. And the fact that our authorities continue to sign Tax Information Exchange Agreements (TIEAs) and double taxation agreements with other jurisdictions to prevent tax fraud, terrorist financing, and money laundering. The report also mentions all the relevant international conventions that are applicable to our jurisdiction (such as the 1988 UN Drug Convention and the UNTOC) and forums and bodies that Curaçao is a member of. Important memberships include the Global Forum on Transparency and Exchange of Information for Tax Purposes, the CFATF (a FATF-style regional body) and, through the Kingdom, the FATF. “The CFATF allowed Curaçao to exit the Third Round of the Mutual Evaluations in November of 2016, precisely because we have strengthened our legal and regulatory anti-money laundering and financing of terrorism framework,” says Cova. “It’s regrettable that the media failed to mention that the report recommends that we continue our supervision of the offshore sector and FTZs and further investigate the unlicensed banking phenomenon, which to us that are actively engaged in maintaining the reputation and integrity of our financial sector is a positive statement.

It means that, although there are deficiencies in the legal and regulatory framework and enforcement and implementation issues exist, we are well on our way towards being fully compliant with the relevant regulations. And if you read the entire report you’ll notice there are many other jurisdictions, just like us, that have a sturdy legal and regulatory framework, but are not yet fully compliant. It’s always a work in progress,” concludes Cova.

The Mutual Evaluations Report Cova refers to does seem to support her view. A comparative table in the report suggests that the main area that requires improvement is the internet gaming sector. Curaçao is currently drafting a revised supervisory law for internet gaming, which once adopted will bring the jurisdiction one step closer to full compliance with AML requirements. Curacao is also in the process of conducting an AML national risk assessment, starting in 2018, supported by the World Bank. Cova also adds that the Prime Minister Eugene Rhuggenaath, as well as the Central Bank of Curaça and St. Maarten, support the ongoing efforts in combatting money laundering and terrorism financing and are actively engaged in all the assessments mentioned above.

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