Financial Crime World

Financial Compliance in Antigua and Barbuda: Understanding the Risks and Challenges

Introduction

Antigua and Barbuda, a twin-island nation in the Caribbean, has been identified as having a weak framework for preventing and detecting money laundering. Despite its strong enforcement mechanisms, the country’s focus on drug trafficking has led to a narrow approach to addressing financial crime.

Key AML Risks

Areas of Concern

The Antiguan government has highlighted several key areas of concern:

  • Citizenship by Investment (CBI): Corruption risks associated with CBI have been flagged by the US, making it sensitive for the government to tackle.
  • Drug Trafficking: Cocaine and cannabis are the most commonly trafficked drugs in the country.
  • Fraud and Tax Evasion: These cases are often referred for further investigation, particularly when linked to the entertainment industry.
  • Human Trafficking: Victims often enter situations voluntarily but are then forced into exploitation, which can occur in plain sight.
  • Cybercrime: Phishing, account takeover scams, payment redirection to illegitimate sites, and ‘mystery shopper’ scams are a growing concern.

Estimated Annual Losses

An estimated $34 million to $86 million of criminal proceeds is laundered every year in Antigua and Barbuda. The country’s focus on drug trafficking has led to a narrow approach to addressing financial crime.

AML Policy Summary

Antigua and Barbuda’s AML framework was reformed after the country’s 2008 mutual evaluation. The focus since then has been on training reporting entities, with supervisory agencies well-informed of AML requirements and risks.

Key Laws

The following laws are in place to combat money laundering:

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

Weaknesses

Key Conduits for Financial Crime

The key conduits for financial crime in Antigua and Barbuda include:

  • Professional services such as lawyers, accountants, real estate, and money services businesses
  • Car dealerships and international banks
  • The used car industry is unregulated and unsupervised, making it vulnerable to abuse by drug traffickers

Coordination between authorities is lacking, and Antigua and Barbuda’s AML efforts are hampered by very low numbers and low-quality SARs from financial institutions.

Strengths

The country has a strong political will to tackle financial crime, along with the technical knowledge and capacity in the finance sector. Recently, the country has worked with Interpol and the Canadian government to tackle human trafficking.

Support for Businesses

VinciWorks has created a guide designed to support businesses that currently operate in Latin America and the Caribbean or are planning to expand to new countries in the region. The guide provides an overview of some of the key AML challenges and issues, including a country-by-country assessment of AML risks and laws.