Clarke unfazed as FATF issues another warning
Minister says Ja on track to addressing concerns by October, Opposition concerned
Published:Sunday | June 25, 2023 | 1:54 AMJovan Johnson - Senior Staff Reporter
The Holness administration appears confident that it will meet a new deadline of October 2023 to bring Jamaica’s anti-money laundering and countering of the financing of terrorism (AML/CFT) regime up to international standards and avoid being blacklisted.
The assurance comes from Finance Minister Dr Nigel Clarke following Friday’s latest warning from the Financial Action Task Force (FATF), the global inter-governmental money laundering and terrorist financing watchdog, whose standards are followed by more than 200 countries.
“The FATF again expresses concern that Jamaica failed to complete its action plan, which fully expired in January 2022,” the group said as a week-long meeting of members and observer organisations, including the International Monetary Fund, ended in Paris, France.
“The FATF strongly urges Jamaica to swiftly demonstrate significant progress in completing its action plan by October 2023 or the FATF will consider next steps, which could include calling on its members and urging all jurisdictions to apply enhanced due diligence to business relations and transactions with Jamaica,” it said in a statement.
As a result, Jamaica remains ‘grey-listed’ or among ‘jurisdictions under increased monitoring’, which means a country has “committed to resolve swiftly the identified strategic deficiencies within agreed time frames”. Jamaica has had the designation since at least February 2020. Continued non-compliance could result in the country being blacklisted as a ‘high-risk jurisdiction’, which exposes it to economic sanctions.
The latest FATF warning is similar to another issued in February, though there have been major developments since.
Clarke is suggesting that the worst outcome is not likely.
He said Jamaica has “successfully completed all the legislative requirements” and the focus now is to operationalise the measures by implementing all aspects of the new beneficial ownership framework and completing work on the risk-based supervision framework for trusts, corporate service providers and lawyers.
In February, Jamaica’s highest court, the UK-based Privy Council, ruled that the Government could impose criminal sanctions on lawyers if they fail to report suspicious client transactions to the finance ministry’s chief investigative unit.
Clarke described the decision as a “game changer” and indicated that Jamaica now satisfies the international standard of bringing all designated non-financial businesses and professionals under its AML/CFT regime.
And in March, Parliament approved amendments to the Companies Act to address issues of transparency and beneficial ownership of legal persons. When the Senate was approving the changes, Foreign Affairs Minister Kamina Johnson Smith said “we are in imminent danger of being blacklisted by the FATF and this is a status that would seriously affect our ability to do business”.
Clarke told The Sunday Gleaner on Friday that with the completion of the three outstanding action items, “Jamaica anticipates applying to exit the FATF increased monitoring process (grey list) by the next plenary, scheduled for October 2023”.
He added:”If successful, FATF will schedule an on-site visit to confirm the sustainability of the measures Jamaica has taken to strengthen its AML/CFT framework.”
Reacting to the latest warning, Opposition Spokesman on Finance Julian Robinson said he is “concerned” that the non-implementation of the action plan agreed by the Government “could cause the country to be subjected to enhanced due diligence, which would be detrimental to the smooth functioning of business transactions.
“This can significantly slow down the pace at which transactions are settled, which will impact the efficiency of business relationships,” he said. “I call on the Government to immediately address the outstanding matters and ensure that there is no further negative consequences for the country.”
Jamaica is among 26 countries on the latest FATF grey list.
For the 18-month period up to June last year, Jamaican financial investigators tracked down nearly $2 billion in assets they believed were acquired through illicit activities. The assets – mainly real estate – were included in 27 asset forfeiture or money laundering investigations completed by the Financial Investigations Division, The Sunday Gleaner reported.