Financial Crime World

Grenada’s Struggle to Combat Drug Trafficking and Terrorist Financing

Concerns Raised by Recent Evaluation

A recent evaluation has raised concerns about Grenada’s ability to effectively combat drug trafficking and terrorist financing. Despite efforts to implement anti-money laundering (AML) and combating the financing of terrorism (CFT) measures, significant weaknesses in its legal framework and lack of oversight have been identified.

  • There is no evidence of subsequent Money Laundering (ML) investigations conducted in relation to drug trafficking matters.
  • A single civil recovery matter was initiated in 2016 but has yet to be concluded.
  • The jurisdiction has not used the full extent of the Proceeds of Crime Act (POCA) law to deprive criminals of the instrumentalities of their crime.

Comprehensiveness of Terrorist Financing Risk Assessment

  • Grenada claims that there is no evidence of terrorism, terrorist financing or proliferation financing in Grenada.
  • However, the report notes that there is a need for specialized training for potential terrorist financing analysis and investigations.
  • The country’s vulnerability to terrorist financing has been assessed as medium-low.

Implementation of United Nations Security Council Resolutions

  • Grenada does not have mechanisms in place to identify and propose targets for designations or to freeze assets without delay.
  • The country’s laws do not provide for the freezing of assets without delay, even if entities are designated.

Non-Profit Organization (NPO) Sector Misused for Terrorist Financing

  • NPOs are required to register with the Financial Intelligence Unit and the Anti-Money Laundering/CFT Commission.
  • However, there is no risk-based supervisory approach in place, leaving NPOs vulnerable to terrorist financing abuse.

Recommendations and Conclusion

  • Grenada must take immediate action to address its weaknesses and implement effective measures to combat drug trafficking and terrorist financing.
  • The country needs to sustain a targeted risk-based supervision approach and monitoring of the NPO sector.
  • Implementation of measures to address proliferation financing (PF) is also necessary.

Inconsistent Compliance Across DNFBP Sector

  • Some financial institutions and designated non-financial businesses and professions (DNFBPs) have demonstrated a better understanding of their AML/CFT legal obligations.
  • However, there are varied levels of understanding across the sector, with some DNFBPs relying on long-standing relationships rather than customer profiling as a risk-mitigating measure.

Conclusion

Grenada’s lack of oversight and enforcement of AML/CFT measures has led to inconsistent compliance across the DNFBP sector, leaving it vulnerable to drug trafficking and terrorist financing. The country must take immediate action to address these weaknesses and implement effective measures to combat these threats.