Aruba Adopts Risk-Based Approach to Anti-Money Laundering Regulations
The Central Bank of Aruba (CBA) has issued a revised handbook for financial service providers and designated non-financial service providers operating in the country, aimed at enhancing the prevention and detection of money laundering and terrorist financing.
New Risk-Based Approach
The revised handbook introduces a risk-based approach to anti-money laundering and combating the financing of terrorism (AML/CFT) regulations. This new approach provides more tailored guidance on AML/CFT regulations, allowing supervised entities to adapt their procedures to their specific risk profile.
Key Updates
- The handbook includes updated guidelines on conducting business risk assessments
- Information on funds transfers, sanctions, terrorist financing, and proliferation financing is also included
- Entities are required to have a money laundering compliance officer based in Aruba
- Specific risk indicators for various sectors are outlined
Structure of the Handbook
The revised handbook is divided into three sections:
Statutory Requirements
- Includes information on AML/CFT State Ordinance requirements
- Outlines regulatory obligations for supervised entities
Regulatory Requirements
- Provides detailed guidance on AML/CFT regulations
- Emphasizes the importance of compliance with AML/CFT State Ordinance
Guidance Notes
- Offers practical advice and examples to support compliance with AML/CFT regulations
- Highlights best practices for AML/CFT risk management
Supervision and Compliance
The CBA is responsible for supervising designated non-financial service providers and other service providers in Aruba, including:
- Lawyers
- Civil notaries
- Tax advisors
- Accountants
- Jewelers
- High-value dealers
- Casinos
- Investment brokers
- Factoring and leasing companies
These entities must comply with the AML/CFT requirements of the State Ordinance on Prevention and Combating Money Laundering and Terrorist Financing (AML/CFT State Ordinance) and register with the CBA. They are also required to take notice of Financial Action Task Force (FATF) and Caribbean Financial Action Task Force (CFATF) warning lists.
Conclusion
The revised handbook is intended to provide more flexibility for supervised entities while maintaining the effectiveness of AML/CFT measures. The CBA emphasizes that the handbook should be used as a reference tool for compliance with AML/CFT regulations, rather than an internal AML/CFT procedures manual. By adopting a risk-based approach, Aruba aims to strengthen its anti-money laundering and combating terrorist financing framework.