Financial Crime World

Financial Crime Investigation Procedures in Grenada Under Scrutiny

Warning Issued to Financial Institutions Operating in the US

Washington D.C., April 2002 - The United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued a warning to financial institutions operating in the US to exercise enhanced scrutiny when dealing with transactions originating from or routed through Grenada.

Systemic Problems in Grenada’s Anti-Money Laundering Regime

The advisory, FinCEN Advisory Issue 31, highlights systemic problems in Grenada’s anti-money laundering regime, which have been identified by the Financial Action Task Force on Money Laundering (FATF) as non-cooperative in the fight against money laundering. The country’s domestic financial sector is composed of:

  • Five commercial banks
  • 15 insurance companies
  • Over 4,000 international business companies

Deficiencies in Grenada’s Supervisory and Regulatory Systems

The report notes that Grenada’s supervisory authorities lack the power to compel financial institutions to produce customer account information without a court order, and its secrecy laws prevent them from sharing such information with law enforcement agencies. Additionally:

  • Grenada has failed to respond in a timely fashion to US law enforcement requests for information under a mutual legal assistance treaty.

Efforts to Strengthen Anti-Money Laundering Regime

Despite recent efforts by Grenada to strengthen its anti-money laundering regime, the country’s legal, supervisory, and regulatory systems still pose significant opportunities for money laundering and the protection of criminal proceeds. The advisory urges banks and other financial institutions operating in the US to give enhanced scrutiny to all transactions involving entities or persons connected to Grenada.

Technical Assistance and Due Diligence

The Treasury Department is working with Grenadian officials to provide technical assistance to remedy the deficiencies in the country’s anti-money laundering systems. Financial institutions are advised to carefully examine any suspicious transactions relating to Grenada to determine if they require reporting under relevant laws and regulations.

The advisory does not recommend that US financial institutions curtail legitimate business with Grenada, but rather emphasizes the need for enhanced due diligence and scrutiny in transactions involving the country.