Financial Crime World

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Risk Assessment in Financial Services in Grenada Under Scrutiny

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Grenada has been rated “largely compliant” (LC) by the Financial Action Task Force (FATF) in its latest Follow-Up Report 2023, which assesses the country’s implementation of technical requirements to combat money laundering and terrorist financing.

Areas of Progress

The report highlights several areas where Grenada has made significant progress:

  • Risk assessment processes: The island nation has demonstrated a robust approach to risk assessment, identifying key vulnerabilities in its financial system.
  • National cooperation and coordination: Grenada has shown effective collaboration between government agencies, law enforcement, and the private sector to combat financial crime.
  • Targeted financial sanctions related to terrorism and terrorist financing: The country has implemented targeted sanctions against individuals and entities suspected of supporting terrorism.

Shortcomings

However, the report also identifies some shortcomings:

  • Confiscation and provisional measures: Grenada’s laws and regulations in this area need improvement to effectively combat money laundering and terrorist financing.
  • Terrorist financing offences: The country’s laws and regulations are not fully effective in preventing and punishing terrorist financing.
  • Transparency and beneficial ownership of legal persons and arrangements: Grenada needs to improve its transparency and disclosure requirements for companies and trusts.

International Cooperation

The FATF report notes that Grenada has made efforts to strengthen its financial system, including:

  • Implementation of new laws and regulations aimed at preventing money laundering and terrorist financing.
  • Demonstrated commitment to international cooperation:
    • Mutual legal assistance: Grenada is fully compliant in this area.
    • Extradition: The country has a robust extradition regime in place.
    • Other forms of international cooperation: Grenada has shown willingness to cooperate with other countries in combating financial crime.

Future Recommendations

The report provides a comprehensive assessment of Grenada’s risk assessment processes, covering 40 different criteria related to financial services, money laundering, and terrorist financing. The findings will be used by the FATF to inform its recommendations for future action in the country.

Conclusion

While there are areas where Grenada can improve, the report highlights the country’s progress in implementing key measures to combat financial crime. The island nation’s continued efforts to strengthen its financial system will be closely monitored by the FATF and other international organizations.