Financial Crime World

Financial Crime Prevention in Grenada: A Review of Progress and Future Directions

Grenada’s financial sector has made significant strides in preventing financial crimes, but there are areas that require attention to ensure the country remains compliant with international standards. In this article, we examine the current state of financial crime prevention in Grenada and identify key areas for improvement.

Technical Compliance: A Mixed Picture

The Financial Action Task Force (FATF) Recommendations provide a framework for countries to implement effective measures against money laundering and terrorist financing. Our analysis shows that Grenada has achieved significant compliance with some technical requirements, but there are still gaps in others.

Areas of Compliance

  • Financial institution secrecy laws: Grenada is compliant with FATF Recommendation 9 (R.9), ensuring the country’s financial institutions have adequate secrecy laws in place.
  • Powers of supervisors: The country has also achieved compliance with R.27, giving its supervisory bodies the necessary powers to effectively regulate and supervise financial institutions.
  • Risk-based approach: Grenada is largely compliant with R.1, assessing risk and applying a risk-based approach to prevent money laundering and terrorist financing.
  • National cooperation and coordination: The country has made significant progress in national cooperation and coordination (R.2) and targeted financial sanctions related to terrorism and terrorist financing (R.6).

Areas Requiring Attention

  • Transparency and beneficial ownership: Grenada is non-compliant with R.24, which requires transparency and accountability in the beneficial ownership of legal persons, and R.25, requiring transparency in the beneficial ownership of legal arrangements.
  • Confiscation and provisional measures: The country is partially compliant with R.4, confiscation and provisional measures, and terrorist financing offence (R.5).
  • Money or value transfer services: Grenada is also partially compliant with R.14, money or value transfer services.

Future Directions

To ensure Grenada remains a safe haven for legitimate financial activity, the government must prioritize the following areas:

1. Strengthening AML/CFT Framework

  • Develop a comprehensive AML/CFT strategy that addresses the gaps identified in our analysis.
  • Ensure effective implementation and monitoring of the strategy.

2. Improving Transparency and Beneficial Ownership

  • Implement measures to ensure transparency and accountability in the beneficial ownership of legal persons and arrangements.
  • Establish a beneficial ownership register or similar mechanism to track beneficial owners.

3. Enhancing Customer Due Diligence

  • Strengthen customer due diligence requirements for financial institutions and designated non-financial businesses and professions (DNFBPs).
  • Ensure that customer due diligence is risk-based, ongoing, and proportionate to the level of risk posed by a customer or business relationship.

4. Regulating and Supervising DNFBPs

  • Establish effective regulations and supervision of DNFBPs to prevent their use in money laundering and terrorist financing activities.
  • Ensure that DNFBPs comply with AML/CFT requirements, including customer due diligence, reporting suspicious transactions, and maintaining records.

By addressing these areas, Grenada can ensure its financial sector remains compliant with international standards and continues to provide a safe and stable environment for legitimate financial activity.