Aruba Takes Steps to Prevent Money Laundering, But More Work Needed

A recent report has assessed the measures in place to prevent money laundering and combat terrorist financing (CFT) in Aruba, highlighting both progress made and areas that require improvement. The report used the Financial Action Task Force (FATF) 40+9 Recommendations as a benchmark for assessing Aruba’s compliance with international standards.

Money Laundering Risks

According to the report, money laundering is primarily linked to drug trafficking and cross-border cash movements, particularly in the real estate and jewelry sectors. The island’s economic system is largely based on tourism and oil refining, but efforts have been made to diversify the economy through offshore activities, including licensed offshore banks and companies.

Real Estate and Jewelry Sectors: These industries are identified as high-risk areas for money laundering.
Economic Diversification: Aruba has attempted to diversify its economy by introducing offshore activities, but this has created new risks that need to be addressed.

Measures in Place

Aruba has taken steps to prevent money laundering, including:

Enhancing the money laundering offense
Taking effective prosecution action against money launderers
Implementing measures to ensure transparency and integrity of corporate vehicles

However, there are still significant weaknesses in the system, including:

Lack of Regulation: Financial institutions not subject to anti-money laundering (AML) and CFT requirements lack adequate supervision.
Gaps in Legislative Framework: The legislative framework needs to be reviewed and updated to ensure compliance with FATF standards.

Recommendations for Improvement

The report recommends urgent action to:

Implement UNSCR 1267 and 1373
Review the structure of the regime, including legislation
Dedicate more resources to agencies responsible for AML/CFT
Reorganize supervision of financial institutions to ensure a consistent and effective approach

Conclusion

While Aruba has taken steps to prevent money laundering, there is still much work needed to strengthen the system and ensure compliance with international standards. Urgent action is required to address these weaknesses and protect the island’s economy from the threat of money laundering.