Financial Crime World

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Due Diligence Procedures Crucial for Businesses Operating in Aruba Amid AML/CTF Concerns

Aruba, a small island nation in the southern Caribbean, has been identified by the Financial Action Task Force (FATF) as having strategic Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) deficiencies. As a result, businesses operating in Aruba must ensure they comply with the country’s AML/CTF regulations to avoid fines and reputational damage.

The Role of FIU Aruba

The Financial Intelligence Unit of Aruba (FIU Aruba), an independent government agency, is responsible for supervising AML/CTF compliance. The FIU Aruba collects, processes, and analyzes data to identify and prevent money laundering and terrorism financing.

Compliance Requirements

To comply with AML/CTF regulations in Aruba, financial or designated non-financial service providers must adhere to specific requirements outlined in the State Ordinance for the Prevention and Combating of Money Laundering and Terrorist Financing (AML/CFT State Ordinance). This includes:

  • Conducting customer due diligence (CDD) or enhanced CDD when a business relationship or transaction poses a higher risk of money laundering or terrorism financing
  • Reporting unusual transactions to the FIU Aruba as soon as they are aware of their irregular nature

Identifying Unusual Transactions

Unusual transactions can be detected using both objective and subjective measures.

Objective Measures

Objective measures include reporting any transaction made by or on behalf of individuals or entities listed on verified lists, such as:

  • The UN Taliban and Al-Qaeda lists
  • Transactions exceeding certain thresholds, including:
    • Wire transfers above 500,000 Afl
    • Cash transactions above 25,000 Afl

Subjective Measures

Subjective measures involve reporting transactions that may potentially be related to money laundering or terrorism financing. Reports must include specific information about:

  • The client’s identity document
  • Transaction details
  • Circumstances suggesting the transaction is unusual

Consequences of Non-Compliance

Failing to comply with AML/CTF regulations in Aruba can result in severe consequences, including:

  • Fines
  • Reputational damage

As such, businesses operating in the country must prioritize due diligence procedures to ensure they are meeting their regulatory obligations.