Compliance Challenges Plague Antigua and Barbuda’s Financial Services Sector

A recent evaluation by the Financial Action Task Force (FATF) has revealed significant compliance challenges in Antigua and Barbuda’s financial services sector, highlighting the need for urgent reforms to prevent money laundering and terrorist financing.

FATF Evaluation Reveals Mixed Results

According to the evaluation, Antigua and Barbuda is “largely compliant” with only 14 of the FATF’s 40 Recommendations. While some areas have shown significant improvement, others remain plagued by weaknesses.

National Cooperation and Coordination: A Critical Area of Concern

One of the most critical areas of concern is national cooperation and coordination, where Antigua and Barbuda was found to be “largely compliant.” However, its efforts in this regard are hindered by inadequate communication and information sharing between different government agencies.

• Inadequate communication and information sharing between government agencies
• Limited coordination and collaboration among relevant authorities

Terrorist Financing Offences: A Major Weakness

Antigua and Barbuda’s terrorist financing offence was rated “partially compliant.” While the country has made some progress in addressing this issue, it still lacks a comprehensive legal framework to effectively criminalize terrorist financing.

• Lack of a comprehensive legal framework to criminalize terrorist financing
• Inadequate investigation and prosecution of terrorist financing cases

Financial Institution Secrecy Laws: A Risk for Money Laundering

The country’s financial institution secrecy laws were deemed “compliant” but still pose risks for money laundering and other financial crimes.

• Financial institution secrecy laws may be exploited by criminals to hide illegal activities
• Lack of transparency and accountability in financial transactions

Customer Due Diligence Requirements: Weaknesses Remain

Antigua and Barbuda’s customer due diligence requirements were found to be “largely compliant,” but some weaknesses remain in its record-keeping systems.

• Inadequate monitoring and reporting of suspicious transactions
• Limited access to information on customers and their financial activities

Correspondent Banking Relationships: A Concern

The FATF expressed concerns over Antigua and Barbuda’s ability to effectively monitor and report suspicious transactions in correspondent banking relationships.

• Inadequate risk assessment and mitigation measures for correspondent banking relationships
• Limited cooperation with international partners to combat money laundering and terrorist financing

Recommendations for Reform

The evaluation recommended that Antigua and Barbuda take immediate action to address these compliance challenges. The country must:

• Strengthen national cooperation and coordination mechanisms
• Improve its legal framework for terrorist financing offences
• Enhance customer due diligence requirements and record-keeping systems
• Address weaknesses in correspondent banking relationships

Government Response: A Commitment to Reform

In a statement, Antigua and Barbuda’s government acknowledged the importance of addressing these compliance challenges and vowed to work closely with international partners to implement reforms.

Conclusion

The FATF evaluation is a critical step in ensuring that Antigua and Barbuda’s financial services sector operates in a safe and transparent environment. The country must now take concrete action to address these compliance challenges and restore confidence in its financial system.