Financial Crime World

Aruba’s Financial Sector Under Scrutiny: Mutual Evaluation Report Reveals Mixed Results

Introduction

The Caribbean Financial Action Task Force (CFATF) has released its Fourth Round Mutual Evaluation Report on Aruba, highlighting both strengths and weaknesses in the island’s efforts to combat money laundering, terrorist financing, and proliferation financing.

Economy and Financial Sector

Aruba’s economy is largely driven by tourism, with a small but growing financial sector. The country has implemented various legislative amendments and developed effective institutional policies and procedures to strengthen its anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.

Strengths

  • Aruba has a good understanding of money laundering and terrorist financing risks.
  • Competent authorities utilize financial intelligence and relevant information to identify targets, conduct investigations, and seize assets.
  • The Central Bank of Aruba has adopted a risk-based approach to supervision, ensuring that financial institutions and designated non-financial businesses and professions (DNFBPs) are implementing preventive measures to prevent and detect these types of crimes.

Weaknesses

  • Implementation of terrorist financing and proliferation financing regulations is lacking.
  • Supervision of non-profit organizations (NPOs) and legal persons and arrangements needs improvement.
  • Aruba has not conducted a risk assessment on virtual asset service providers (VASPs), despite being a jurisdiction where such activities have been identified.

Recommendations for Improvement

The CFATF is urging Aruba to take concrete steps to strengthen its regime and improve cooperation with international partners to combat financial crime. Specifically, the report recommends:

  • Implementing terrorist financing and proliferation financing regulations
  • Improving supervision of NPOs and legal persons and arrangements
  • Conducting a risk assessment on VASPs

Conclusion

While Aruba’s AML/CFT framework has shown some effectiveness, major improvements are needed to address the identified weaknesses. The CFATF is committed to supporting Aruba in this effort and looks forward to seeing concrete improvements in the coming years.

“We recognize the progress made by Aruba in strengthening its AML/CFT regime,” said a CFATF spokesperson. “However, we also urge the country to continue working towards addressing the identified weaknesses and vulnerabilities. We are committed to supporting Aruba in this effort and look forward to seeing concrete improvements in the coming years.”"