Financial Crime World

Barbados Makes Strides Towards Compliance with New Proceeds and Instrumentalities of Crime Act

Bridgetown, Barbados - The island nation has made significant progress in addressing deficiencies outlined in its technical compliance rating under Recommendation 4, as part of its ongoing efforts to strengthen its anti-money laundering (AML) and counter-terrorist financing (CFT) framework.

Addressing National Risk Assessment Deficiencies

In 2019, Barbados conducted its second Report on Assessment of National Money Laundering and Terrorist Financing Risk (National Risk Assessment), which identified the highest threats for money laundering as fraud and drug trafficking. The assessment also highlighted the threat of terrorist financing as low, but took into account the island’s proximity to jurisdictions with high terrorist financing risks.

Implementing Initiatives

To address these risks, Barbados has implemented several initiatives:

  • Risk-based supervision and sanctions on financial institutions and trusts and corporate services providers (TCSPs)
  • The Financial Services Commission requires entities to know and articulate possible AML/CFT risks they may be exposed to
  • The Ministry of International Business’ International Business Unit conducts a risk assessment of the TCSP sector

Outreach Efforts

Regulators have also increased outreach efforts to clients on the importance of filing suspicious activity reports (SARs), with guidelines published for:

  • Designated non-financial businesses and professions (DNFPs)
  • Not-for-profit organizations (NPOs)

Compliance-Based Recovery

Barbados’ progress towards compliance is crucial as it seeks to increase foreign direct investment (FDI) inflows as part of its COVID-19 pandemic economic recovery strategy. In February 2020, the Caribbean Financial Action Task Force (CFATF) acknowledged Barbados’ progress on technical compliance in its second Enhanced Follow-up Report, with ratings upgrades on 11 recommendations.

Digitalization and Technology Adoption

Barbados has accelerated its digitalization and technology adoption reforms, even prior to the COVID-19 pandemic. The Corporate Affairs and Intellectual Property Office (CAIPO) has taken steps to allow for online submission of applications and filing for several services.

Conclusion

As Barbados positions itself for recovery, prioritizing compliance with AML/CFT/PF framework is crucial. The global business sector remains a key driver of the economy, and increased foreign investment will be essential in driving growth and development. With its progress towards compliance, Barbados is well-positioned to attract new investments and cement its position as a reliable and transparent financial hub.

Contact Information

Alicia D. Nicholls International Trade Consultant & Research Fellow, University of the West Indies Email: anicholls@caribbeantradelaw.com Website: www.caribbeantradelaw.com