Suspicious Transactions in Antigua and Barbuda: A Concern for Financial Institutions

Introduction

The United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued an advisory warning financial institutions to exercise enhanced scrutiny on transactions involving Antigua and Barbuda, a small island nation in the Caribbean Sea. The advisory highlights concerns over the country’s offshore financial sector and its potential use as a haven for money laundering and other criminal activities.

Concerns Over Offshore Financial Sector

• Antigua and Barbuda licenses approximately 50 offshore banks, which operate under a different regulatory framework than the nine commercial banks licensed to do business within the country.
• The government’s recent amendments to its Money Laundering (Prevention) Act have weakened its anti-money laundering laws, raising concerns over the effectiveness of supervisory authorities.

Enhanced Scrutiny Required

The FinCEN advisory notes that institutions subject to suspicious activity reporting rules should carefully examine transactions involving Antigua and Barbuda offshore banks, as well as those involving both offshore and commercial banks. The Treasury Department considers any report relating to such transactions to be a report of a suspicious transaction relevant to possible violations of law or regulation.

Reporting Requirements

• Institutions subject to suspicious activity reporting rules should report transactions that meet the threshold amount of $5,000 or more in U.S. dollars equivalent.
• Those not yet subject to specific reporting rules should consider such transactions with relation to their reporting obligations under other applicable law.

Importance of Enhanced Scrutiny

The advisory emphasizes the importance of enhanced scrutiny in detecting and preventing financial crimes. Financial institutions are advised to carefully examine available facts relating to any transaction routed into or out of Antigua and Barbuda, or involving entities organized or domiciled, or non-resident persons maintaining accounts, in Antigua and Barbuda.

About FinCEN

The FinCEN advisory is a product of the Financial Crimes Enforcement Network, which aims to prevent and detect financial crimes through international cooperation and coordination. For more information on FinCEN’s programs, visit its website at http://www.ustreas.gov/fincen.