Financial Crime World

Aruba: Strong Framework in Place to Fight Financial Crime, But Room for Improvement

ORANjestad, Aruba - The Caribbean Financial Action Task Force (CFATF) has released its fourth round mutual evaluation report on Aruba, highlighting the island’s efforts to strengthen its anti-money laundering and combating the financing of terrorism (AML/CFT) regime.

Positive Aspects

The report praises Aruba’s significant progress in implementing a robust AML/CFT framework, with satisfactory results achieved in areas such as:

  • Risk Understanding: The Financial Intelligence Unit (FIU) and other competent authorities have demonstrated a good understanding of money laundering and terrorist financing risks.
  • Domestic Cooperation: Authorities have shown effective cooperation and coordination to identify targets, conduct investigations, and seize assets.
  • Access to Financial Intelligence: Financial intelligence is used effectively to support investigations and prosecutions.
  • Supervision: The Central Bank of Aruba (CBA) ensures that financial institutions and designated non-financial businesses and professions (DNFBPs) implement preventive measures to prevent and detect money laundering and terrorist financing.
  • International Cooperation: Aruba has demonstrated a good understanding of international AML/CFT standards and has engaged in effective cooperation with other countries.

Areas for Improvement

However, the report identifies areas that require improvement:

  • Targeted Financial Sanctions (TFS): Implementation of TFS against terrorists and proliferators is incomplete, with many legal persons and arrangements lacking transparency.
  • Non-Profit Organizations (NPOs): Supervision of NPOs is deemed inadequate, and money laundering investigations and prosecution need to be strengthened.
  • Money Laundering Investigations: Major improvements are needed in the conduct and outcome of ML investigations.

Vulnerabilities

Aruba’s economy is primarily based on tourism, making it vulnerable to money laundering through sectors such as:

  • Casinos
  • Banks
  • Real Estate
  • Money Transfer Companies

The country has not conducted a risk assessment of virtual assets service providers (VASPs), but authorities have not identified any such activities operating in the jurisdiction.

Recommendations

The CFATF’s fourth round mutual evaluation report provides recommendations for improvement to strengthen Aruba’s financial system and protect its economy from illicit activities. Some key areas for attention include:

  • TFS-TF: Improve implementation of TFS against terrorists and proliferators.
  • NPO Supervision: Enhance supervision of NPOs to prevent money laundering and terrorist financing.
  • ML Investigations: Strengthen ML investigations and prosecution outcomes.

The report concludes that Aruba has made significant progress in implementing its AML/CFT regime, but there is still room for improvement. By addressing these areas, the country can further strengthen its financial system and protect its economy from illicit activities.