Financial Crime World

Antigua and Barbuda Faces Challenges in Preventing Financial Crime

A Narrow Focus on Drug Trafficking Leaves Antigua and Barbuda Vulnerable

Antigua and Barbuda, a twin-island nation in the Caribbean, is struggling to prevent financial crime despite having strong laws in place. The country’s narrow focus on drug trafficking has left it vulnerable to other forms of financial malfeasance, including corruption, fraud, tax evasion, human trafficking, and cybercrime.

Estimated Annual Losses due to Financial Crime

  • Between $34 million and $86 million in criminal proceeds are laundered every year in Antigua and Barbuda.
  • This is a significant burden on the country’s economy and undermines its efforts to combat financial crime.

AML Framework Criticized for Being Too Narrow

The country’s AML framework was reformed after its 2008 mutual evaluation, but it has been criticized for being too narrow in its focus on drug trafficking. This limited approach leaves the country vulnerable to other forms of financial malfeasance.

Key Laws in Place to Combat Financial Crime

  • The Misuse of Drugs Act 1974
  • The Proceeds of Crime Act 1993
  • The Money Laundering Prevention Act of 1996
  • The Prevention of Terrorism Act of 2005

High-Risk Conduits for Financial Crime

  • Professional services such as lawyers, accountants, real estate, and money services businesses are considered high-risk conduits for financial crime.
  • Car dealerships and international banks are also at risk of being exploited by money launderers.

Vulnerabilities in the Used Car Industry

  • Almost all cars in Antigua and Barbuda are part of the second-hand market, making it a vulnerable industry to exploitation by money launderers.

Coordination between Authorities Lacking

The AML efforts of Antigua and Barbuda are hampered by low-quality SARs (Suspicious Activity Reports) from financial institutions. The Royal Police Force of Antigua and Barbuda’s narrow focus on drug trafficking means that a financial crime investigation is unlikely to occur unless it has a connection to drugs.

Strong Political Will to Tackle Financial Crime

Despite the challenges, Antigua and Barbuda has shown strong political will to tackle financial crime. The country has worked with Interpol and the Canadian government to combat human trafficking.

Recommendations for Businesses Operating in or Planning to Expand to Latin America and the Caribbean

  • Be aware of the AML challenges and issues in Antigua and Barbuda.
  • Take steps to mitigate your risks, such as conducting thorough due diligence on customers and suppliers.
  • Consider seeking guidance from a compliance expert or using a compliance software solution.

Country-Specific Guide to Support Businesses in the Region

VinciWorks has created a guide to support businesses in Latin America and the Caribbean. The guide provides an overview of key AML challenges and issues, as well as a country-by-country assessment of AML risks and laws.