Aruba’s Anti-Money Laundering and Combating the Financing of Terrorism Efforts Under Scrutiny
ORANjestad, Aruba - A new report by the Caribbean Financial Action Task Force (CFATF) has raised concerns over Aruba’s efforts to combat money laundering and the financing of terrorism. The Fourth Round Mutual Evaluation Report, released today, highlights several areas where improvements are needed to strengthen the island’s anti-money laundering and combating the financing of terrorism (AML/CFT) regime.
Economic Risk Assessment
Aruba’s economy is heavily reliant on tourism, with a growing risk of money laundering (ML) and terrorist financing (TF) activities. The country has conducted three National Risk Assessments (NRAs), including two ML risk assessments in 2012 and 2021, and one TF and proliferation financing (PF) risk assessment.
Major Proceeds-Generating Crimes
- Drug trafficking
- Bulk cash smuggling
- Bribery and corruption
- Fraud
- Underground banking
- Organized crime
- Human trafficking
- Migrant smuggling
Sectors Vulnerable to Money Laundering
- Casinos
- Banks
- Real estate
- Money transfer companies
- Notaries
Risk Assessment for Terrorist Financing
Aruba’s TF/PF NRA rated the TF risk as medium, although the country has never been the subject of any terrorist activities. The report notes that the TF risk assessment was based on intelligence received from competent authorities, known regional TF typologies, experts’ opinions, and open sources of information.
CFATF Evaluation Findings
The CFATF evaluation found that Aruba’s AML/CFT regime has been strengthened through legislative amendments and effective institutional policies and procedures. However, major improvements are needed in several areas, including:
- Implementation of targeted financial sanctions (TFS) for TF and PF
- NPO supervision
- ML investigations and prosecution
- Transparency of legal persons and arrangements
Strengthened AML/CFT Regime
Aruba’s competent authorities have a good understanding of ML/TF risks, with the Financial Intelligence Unit (FIU) utilizing financial intelligence and relevant information to identify targets, conduct investigations, and confiscate assets. The Central Bank of Aruba has adopted a risk-based approach to supervision and ensured that financial institutions and designated non-financial businesses and professions are implementing preventive measures to prevent and detect ML/TF/PF.
Technical Compliance with International Standards
Technical compliance with international standards has been improved through revisions to the AML/CFT State Ordinance, Criminal Code, Code of Criminal Procedure, and AML/CFT Handbook. However, further revisions are needed to cover virtual asset service providers (VASPs) and other areas.
Conclusion
The CFATF report provides a comprehensive assessment of Aruba’s AML/CFT regime and identifies key areas for improvement. The island’s authorities will need to address these concerns to maintain the country’s reputation as a stable and secure financial hub in the region.