Financial Crime World

Aruba’s Financial Sector Shows Mixed Progress in Combating Money Laundering and Terrorism Financing

ORANJESTAD, ARUBA - A recent report by the Caribbean Financial Action Task Force (CFATF) has highlighted both strengths and weaknesses in Aruba’s efforts to combat money laundering and terrorism financing.

Strengthened Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Framework

According to the 9th Round Mutual Evaluation Report, released today, Aruba’s financial sector has made significant strides in strengthening its AML/CFT framework. The report praises the country’s commitment to implementing a risk-based approach to supervision, as well as its efforts to utilize financial intelligence and relevant information to identify and investigate suspicious activities.

Areas for Improvement

However, the report also identifies several areas that require improvement:

  • Virtual Asset Service Providers (VASPs): Aruba has not conducted a comprehensive risk assessment of VASPs operating in the jurisdiction, despite their growing importance in the global financial system.
  • Terrorist Financing and Proliferation Financing Measures: There is still room for improvement in implementing measures to prevent terrorist financing and proliferation financing.
  • NPO Supervision: Improvement is needed in supervising non-profit organizations (NPOs) to prevent them from being misused for money laundering or terrorism financing.
  • ML Investigations and Prosecution: Aruba’s law enforcement agencies should improve their investigation and prosecution of money laundering cases.
  • Transparency of Legal Persons and Arrangements: The country needs to improve the transparency of legal persons and arrangements, including companies and trusts.

Economic Vulnerability

Aruba’s economy, primarily based on tourism, is vulnerable to money laundering risks. Major proceeds-generating crimes in the country include:

  • Drug trafficking
  • Bulk cash smuggling
  • Bribery
  • Corruption
  • Fraud
  • Underground banking
  • Organized crime
  • Human trafficking
  • Migrant smuggling

The following sectors were identified as particularly vulnerable to money laundering:

  • Casinos
  • Banks
  • Real estate sector
  • Money transfer companies
  • Notaries

Terrorism Risk

While Aruba has not been the subject of any terrorist activities in recent years, it is still at risk due to its geographic location and economic ties with other regions.

Conclusion

Overall, while Aruba’s financial sector has made progress in combating money laundering and terrorism financing, the CFATF report highlights the need for continued improvement and cooperation between government agencies, financial institutions, and other stakeholders to ensure the integrity of the country’s financial system.