Antigua and Barbuda: Corporate Governance and Financial Crime in the Caribbean Paradise
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As organizations operating in Latin America and the Caribbean, it is crucial to understand the unique challenges of anti-money laundering (AML) compliance in each jurisdiction. In this article, we delve into the key AML risks and laws in Antigua and Barbuda, highlighting the country’s strengths and weaknesses.
Corruption Risks Abound
Antigua and Barbuda has been plagued by corruption risks, particularly in its Citizenship by Investment program, which has drawn criticism from the US government. The country is also a major hub for drug trafficking, with cocaine and cannabis being the most commonly trafficked drugs. Additionally, fraud and tax evasion are significant concerns, particularly in the entertainment industry.
Key Corruption Risks
- Citizenship by Investment program
- Drug trafficking
- Fraud
- Tax evasion
Human Trafficking and Cybercrime on the Rise
Human trafficking is another pressing issue, with victims often entering the situation voluntarily only to be forced into exploitation. The country has also seen a surge in cybercrime, including phishing scams, account takeover schemes, and “mystery shopper” scams.
Key Cybercrime Risks
- Phishing scams
- Account takeover schemes
- Mystery shopper scams
Estimated $34-$86 Million Laundered Annually
AML experts estimate that between $34 million and $86 million of criminal proceeds is laundered every year in Antigua and Barbuda. The country’s AML policy has been criticized for its narrow focus on drug trafficking, making it weak in prevention and detection of money laundering crime.
Key Challenges
- Narrow focus on drug trafficking
- Weak prevention and detection measures
- High volume of criminal proceeds laundered annually
Reform Efforts Underway
Antigua and Barbuda was one of the first Caribbean countries to reform its AML framework after a 2008 mutual evaluation. Since then, the country has focused on training reporting entities, with supervisory agencies well-informed about AML requirements and risks.
Key Reforms
- Training for reporting entities
- Supervisory agency awareness of AML requirements and risks
Key Conduits for Financial Crime
Professional services such as lawyers, accountants, real estate agents, and money services businesses are considered high-risk conduits for financial crime. Car dealerships and international banks also pose significant risks, particularly in the unregulated used car market.
High-Risk Sectors
- Lawyers
- Accountants
- Real estate agents
- Money services businesses
- Car dealerships
- International banks
Weaknesses Abound
Coordination between authorities is lacking, and AML efforts are hindered 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 financial crime investigations are often overlooked unless they have a connection to drugs.
Key Challenges
- Lack of coordination between authorities
- Low-quality SARs
- Narrow focus on drug trafficking
Strengths and Opportunities
Despite these challenges, Antigua and Barbuda has shown strong political will to tackle financial crime, along with technical knowledge and capacity in the finance sector. The country has recently collaborated with Interpol and the Canadian government to combat human trafficking.
Key Strengths
- Strong political will to address financial crime
- Technical knowledge and capacity in the finance sector
- Collaboration with international organizations
Conclusion
As organizations operating in Antigua and Barbuda or planning to expand into the region, it is essential to understand the unique AML challenges and laws in this Caribbean paradise. VinciWorks’ free guide provides an overview of key AML risks and issues, including a country-by-country assessment of AML risks and laws.
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