Financial Crime World

Aruba’s Efforts to Combat Money Laundering and Terrorist Financing Fall Short

A recent report by the Caribbean Financial Action Task Force (CFATF) has highlighted significant weaknesses in Aruba’s efforts to combat money laundering (ML) and terrorist financing (TF). The report assessed the island nation’s progress in implementing international anti-money laundering and combating the financing of terrorism (AML/CFT) standards, finding that Aruba is failing to effectively implement several key measures.

Lack of Consistent Training for Law Enforcement Agencies

One of the main concerns is the lack of consistent training for law enforcement agencies (LEAs) and prosecutors on TF investigations and prosecutions. This has resulted in a lack of expertise and resources to tackle these complex crimes.

  • The report highlights that LEAs and prosecutors need more comprehensive training to effectively investigate and prosecute TF cases.
  • A systematic approach to training would help ensure that LEAs have the necessary skills and knowledge to combat ML/TF.

Financial Investigations

The report also noted that financial investigations, which are crucial in identifying and tracing proceeds of crime, are not being conducted consistently or effectively. While the Asset Recovery Team (ART) has seized significant assets related to drug trafficking, there is a need for more robust and systematic approaches to asset recovery.

  • The report recommends conducting more thorough financial investigations to identify and trace proceeds of crime.
  • A more systematic approach to asset recovery would help ensure that criminals are held accountable for their actions.

Targeted Financial Sanctions

Another area of concern is the implementation of targeted financial sanctions (TFS) against TF entities. While Aruba has made progress in designating TFS-TP entities, there are concerns about the lack of transparency and effective oversight mechanisms.

  • The report recommends improving transparency and oversight mechanisms for TFS-TP entities to prevent ML/TF.
  • A more transparent approach would help ensure that sanctions are effectively implemented and monitored.

Supervision of Non-Profit Organizations

The report also highlighted weaknesses in the supervision of non-profit organizations (NPOs), which have been identified as potential channels for ML/TF. Additionally, the investigation and prosecution of ML cases is hampered by a lack of resources and expertise.

  • The report recommends strengthening supervision of NPOs to prevent ML/TF risks.
  • A more robust approach to supervising NPOs would help ensure that these organizations are not used as channels for illicit activities.

Recommendations

To address these concerns, the CFATF recommends that Aruba:

  1. Enhance training for LEAs and prosecutors on TF investigations and prosecutions.
  2. Conduct more robust financial investigations to identify and trace proceeds of crime.
  3. Improve transparency and oversight mechanisms for TFS-TP entities.
  4. Strengthen supervision of NPOs to prevent ML/TF risks.
  5. Increase resources and expertise for investigation and prosecution of ML cases.

By addressing these concerns, Aruba can strengthen its efforts to combat ML/TF and protect the integrity of its financial system.