Financial Crime World

Financial Crime Risks Rise in Antigua and Barbuda, Warns US Treasury Department

The United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued a warning to financial institutions worldwide to exercise enhanced scrutiny over transactions involving Antigua and Barbuda. The advisory, issued in April 1999, highlights concerns over the island nation’s weakened anti-money laundering laws and lack of effective oversight of its offshore banking sector.

Weakened Regulatory Environment

Antigua and Barbuda has nine commercial banks licensed by its government, as well as around 50 offshore banks that operate globally. However, the country’s reputation has been marred by regulatory lapses and concerns over bank secrecy laws.

  • In 1997, the European Union Bank, an Antiguan-based institution, collapsed, prompting regulators to raise concerns about the nation’s financial sector.
  • Subsequent amendments to the Money Laundering (Prevention) Act in 1998 weakened its effectiveness, while changes to the supervision of offshore financial services raised questions over the independence and regulatory capabilities of the International Financial Sector Authority.

Threats to Global Efforts Against Financial Crime

The US Treasury Department warns that these developments have created a “haven” for money launderers and other criminal elements, threatening international efforts to combat financial crime. The advisory urges banks and financial institutions worldwide to carefully examine transactions involving Antigua and Barbuda or its offshore banking sector, particularly those with a value of $5,000 or more.

  • Enhanced scrutiny is recommended for transactions involving Antiguan offshore banks, as well as those that involve both the nine commercial banks and offshore institutions.
  • The Treasury Department has also warned that any reports relating to suspicious transactions may be considered relevant to possible violations of law or regulation, and will be protected from liability under US regulations.

Call for International Cooperation

The advisory highlights the need for international cooperation in combating financial crime and warns that Antigua and Barbuda’s weakened regulatory environment could undermine global efforts to combat money laundering and other criminal activities.