Financial Crime World

Barbados Makes Progress towards Compliance with Global Financial Regulators

As Barbados continues to navigate its economic recovery strategy in the wake of the COVID-19 pandemic, the island nation has made significant strides towards compliance with global financial regulators.

Identifying Risks and Implementing Initiatives

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

To address these risks, Barbados has implemented several initiatives aimed at strengthening its anti-money laundering and counter-terrorist financing (AML/CFT) framework. These initiatives include:

  • Risk-based supervision and sanctions on financial institutions and trusts and corporate services providers (TCSP)
  • Conducting a risk assessment of the TCSP sector
  • Increasing outreach to clients on the importance of filing suspicious activity reports (SARs)
  • Publishing guidelines for designated non-financial businesses and professions (DNFPS)

Recognition by International Regulators

Barbados’ efforts have been recognized by international financial regulatory bodies, including the Financial Action Task Force (FATF) and the Caribbean Financial Action Task Force (CFATF). In its second Enhanced Follow-up Report in February 2020, CFATF acknowledged Barbados’ progress on technical compliance, with upgrades to ratings on 11 recommendations.

Commitment to Compliance

The island’s commitment to AML/CFT compliance is crucial as it seeks to increase foreign direct investment inflows and attract new investors. The COVID-19 pandemic has accelerated the digitalization of financial services in Barbados, with online submission of applications and filing for several services now available through the Corporate Affairs and Intellectual Property Office.

“We recognize the importance of being regarded as a compliant jurisdiction,” said an official from the Ministry of International Business. “We are committed to prioritizing addressing existing deficiencies in our AML/CFT/PF framework and ensuring that our financial sector is robust and resilient.”

Impact on Businesses

Barbados’ progress towards compliance has been welcomed by the global business community, with businesses in the sector able to pivot and maintain operations despite the pandemic. The island’s hosting of the UNCTAD XV Quadrennial in hybrid format in October 2021 was a testament to its ability to adapt and thrive in challenging times.

Future Outlook

With increased trade and investment opportunities on the horizon, Barbados is well-positioned for recovery and growth. As Alicia Nicholls, a research fellow and part-time lecturer at the University of the West Indies, notes, “Barbados’ commitment to AML/CFT compliance sends a strong signal to investors that the island is serious about attracting foreign investment and doing business responsibly.”