Financial Crime World

Belize Financial Services Sector Faces Compliance Issues After Latest Round of CFATF Evaluations

Background

In a recent move, the Cabinet of the Financial Services Commission in Belize has approved the removal from the Register of over 1,600 companies that failed to comply with the country’s new Companies Act. This decision comes on the heels of the Caribbean Financial Action Task Force (CFATF) completing its latest evaluation round, which raised concerns about Belize’s anti-money laundering and combating the financing of terrorism (AML/CFT) regime.

CFATF Evaluation Round

The CFATF’s public statement in November 2013 listed Belize as a jurisdiction with strategic deficiencies in its AML/CFT regime. However, following a comprehensive revision of its legislative framework and implementation by the public and private sector, Belize was removed from the list and monitoring process in May 2015.

In preparation for the latest evaluation round, which began in December 2022, Belize amended several laws to bring them up to date with international standards on transparency and AML/CFT. The new Companies Act, enacted in 2022, introduced controls on beneficial ownership, nominee directors, and accounting records at registered agents’ offices.

Non-Compliance Issues

Despite these efforts, it appears that many companies failed to comply with the “re-registration” process required under the new law. The affected companies have been struck off the Register and are no longer able to commence legal proceedings, carry out business, or deal with their assets.

Consequences of Non-Compliance

  • Companies that remain in this state for five consecutive years will be dissolved by the Registrar.
  • A restoration process is available, subject to certain conditions, which allows companies to continue operating and avoid dissolution.

Impact on the Financial Services Sector

The removal of these companies from the Register is seen as another control and transparency mechanism aimed at combating money laundering and terrorist financing. Belize continues to work towards demonstrating strong technical compliance and effective implementation of international standards.

Next Steps

For more information on this story or compliance issues in Belize’s financial services sector, contact Eyra Perdomo, VP Compliance at Morgan & Morgan, [email protected].