Aruba Faces Criticism Over Terrorism Financing and Financial Crime Laws
Weaknesses in Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Measures
A recent report has highlighted concerns over Aruba’s efforts to combat terrorism financing and financial crime, citing significant weaknesses in its AML and CFT measures. The island nation, a member of the Kingdom of the Netherlands, has been criticized for its lack of transparency and integrity in its offshore activities.
Concerns Over Offshore Activities
Aruba’s economic system is largely based on tourism and oil refining, but it has actively sought to diversify its economy through off-shore activities. However, this move has created a significant risk for misuse by launderers and other criminals, as the country’s corporate vehicles are not subject to basic AML/CFT requirements.
Lack of Criminalization of Terrorist Financing
The report also criticized Aruba’s decision not to criminalize terrorist financing as required by international standards. Instead, the country relies on existing provisions of its Criminal Code to deal with the issue. The assessment team urged the government to urgently criminalize TF as a separate and independent offence.
Inadequate AML/CFT System
The report highlighted concerns over the lack of coherence and effectiveness in Aruba’s AML/CFT system, citing gaps in legislation and inadequate resources dedicated to combating financial crime. Additionally, many financial activities are being performed by institutions that are neither regulated nor supervised, creating potential opportunities for money launderers and other criminals.
Recommendations
The report called on Aruba to take urgent action to strengthen its AML/CFT regime, including:
- Reviewing the structure of its system
- Dedicating more resources to agencies in charge of combating financial crime
- Implementing clear tasks and priorities
- Introducing a new and coherent legislative framework to address deficiencies and implement all FATF requirements
International Authorities’ Concerns
Aruba’s failure to effectively combat terrorism financing and financial crime has raised concerns among international authorities, who have urged the country to take immediate action to strengthen its laws and regulations. The report’s findings come as a warning to Aruba that it must take concrete steps to address these weaknesses and protect itself from the risks of financial crime.
Conclusion
Aruba must take urgent action to strengthen its AML/CFT regime and address the deficiencies highlighted in the report. Failure to do so may result in further criticism and potentially severe consequences. It is essential for Aruba to demonstrate its commitment to combating terrorism financing and financial crime, and to work closely with international authorities to ensure that its laws and regulations are effective and robust.