Financial Crime World

Title: Barbados Fortifies Financial System Against Money Laundering Threats: A Look at Legal Frameworks and Compliance Measures

Barbados, an island nation in the Caribbean Sea, is a significant player in the global financial sector. However, this international financial hub faces a pressing concern: money laundering. To safeguard its economy and uphold international standards, the Barbados government has taken proactive steps to combat money laundering and terrorist financing. In this article, we will explore Barbados’ legal frameworks and compliance measures to fortify its financial system against these threats.

Barbados’ legislative arsenal against financial crime includes the following acts and authorities:

  • Anti-Terrorism Act (2002) Barbados’ commitment to the international community against terrorism financing sees the enactment of the Anti-Terrorism Act, aligning with the United Nations (UN) International Convention for the Suppression of Terrorist Financing and UN Security Council Resolution 1373.

  • Money Laundering (Prevention and Control) Act (MLPCA) (1988) This act imposes a maximum penalty of $1 million USD and 25 years in prison for money laundering offenses.

  • Anti-Money Laundering Authority (AMLA) (2000) Serving as Barbados’ Financial Intelligence Unit (FIU), AMLA ensures all financial institutions comply with MLPCA regulations.

Compliance Measures

Barbados’ financial sector adheres to the following AML measures:

  1. Client Verification Strict client identification measures require financial institutions to verify identities and document transactions exceeding $5,000 USD.

  2. Suspicious Activity Reports (SARs) Any unusually large or suspicious transactions must be reported to the AMLA through SARs.

  3. Know Your Customer (KYC) Standards Barbados has implemented KYC standards to verify customer identities, contributing to a robust AML system.

Barbados’ Financial Landscape

The Central Bank of Barbados, based in Bridgetown, plays an essential role in maintaining financial stability, fostering a strong financial foundation, and promoting economic growth. Before the establishment of the Central Bank in 1972, the East Caribbean Currency Authority (ECCA) served as Barbados’ primary financial institution. In contrast to the current Central Bank and its regulatory control and enforcement abilities, ECCA lacked oversight over financial firms.

As international threats related to money laundering, terrorism financing, and weapons proliferation emerged, Barbados’ regulatory response evolved. The nation now relies on a network of regulators and regulations:

  1. Barbados Central Bank (CBB)
  2. Anti-Money Laundering Authority (AMLA)
  3. Financial Services Commission (FSC)
  4. Ministry of International Business and Industry, International Business Unit (IBU)
  5. Corporate Affairs and Intellectual Property Office (CAIPO)
  6. Financial Intelligence Unit (FIU)

Regulations

Barbados’ legislative response to these global threats includes the following acts:

  1. Financial Institutions Act, Section 324A (FIA)
  2. Money Laundering and Terrorist Financing Act, 2011-23 (MLFTA)
  3. Money Laundering and Terrorist Financing Amendment Act, 2019-22 (MLFTAA)
  4. Anti-Terrorism Act (Chapter 158) (ATA)
  5. 2019 Anti-Terrorism (Amendment) Act (ATAA)
  6. National Risk Assessment (NRA)

To uncover and mitigate potential money laundering risks and weaknesses, Barbados recently completed its first risk assessment, identifying drug trafficking as the primary source. The country is currently working on a comprehensive national risk assessment to address any gaps and strengthen its AML defenses.

Thriving International Financial Services Industry

Barbados’ vibrant international financial services industry emphasizes the importance of robust AML measures to protect the sector and Barbados’ reputation. To assist with local and global AML compliance, Sanction Scanner offers a suite of AML solutions, including KYC, Customer Due Diligence (CDD), Transaction Screening, and Transaction Monitoring. Interested parties are invited to learn more and request a demo by contacting Sanction Scanner for further information.