Financial Crime World

Title: Antigua and Barbuda’s Weakened Anti-Money Laundering Laws: U.S. Financial Institutions Alerted to Enhanced Scrutiny

April 7, 1999

The Financial Crimes Enforcement Network (FinCEN), part of the U.S. Treasury Department, issued a stark warning to American banks and financial institutions on April 7, 1999, to implement heightened scrutiny towards all financial transactions linked to Antigua and Barbuda. The advisory came about following concerns over recent amendments to the Caribbean twin-island nation’s anti-money laundering laws and supervision of its offshore banking sector.

Concerns Regarding Weakened Money Laundering Laws of Antigua and Barbuda

The Financial Crimes Enforcement Network’s warning was issued following concerns regarding the Government of Antigua and Barbuda’s moves to weaken its anti-money laundering regulations and supervision. Some of the main issues are:

  1. Undermining US efforts to combat international money laundering: U.S. regulators and law enforcement officials fear that these weakening measures will lead to increased secrecy, limited investigation scope, and decreased international cooperation.

  2. Amendments to the Money Laundering (Prevention) Act (November 1998): In November 1998, the Antigua and Barbuda government amended its Money Laundering (Prevention) Act, leading to significant weaknesses in the law, such as:

    • Strengthening bank secrecy
    • Limiting the scope of potential investigations
    • Infringing upon international cooperation

  3. Modification of Supervision in the Offshore Financial Services Sector: Antigua and Barbuda also modified the supervision of its offshore financial services sector by creating the International Financial Sector Authority (IFSA), a regulatory body that includes representatives from the regulated offshore banks. This structure contradicts the Basle Principles, the widely acknowledged international standards for banking supervision.

U.S. Regulators’ Urgent Call for Enhanced Scrutiny

Under Secretary for Enforcement at the Treasury Department, James E. Johnson, expressed concerns about these recent actions by Antigua and Barbuda. He stated, “Recent actions taken by Antigua and Barbuda will undermine U.S. efforts to combat international money laundering through offshore accounts. U.S. financial institutions must give enhanced scrutiny to all transactions involving Antigua and Barbuda to protect against the laundering of criminal proceeds.”

Protecting Against Money Laundering Activities

Financial institutions are urged to stay informed and exercise caution when dealing with transactions related to Antigua and Barbuda. The full advisory can be accessed via the internet for further information.

  • Protect against potential money laundering activities: By increasing scrutiny, financial institutions can help prevent transactions linked to Antigua and Barbuda from being used as conduits for money laundering activities.
  • Stay informed: Keep abreast of any developments or changes in the regulations and supervision of the financial sector in Antigua and Barbuda.
  • Exercise caution: When engaging in financial transactions with parties connected to Antigua and Barbuda, always prioritize due diligence and risk assessment.