Financial Crime World

Grenada’s Financial Regulators Fall Short in Combating Money Laundering and Terrorist Financing

A recent evaluation by the Caribbean Financial Action Task Force (CFATF) has highlighted several weaknesses in Grenada’s financial regulations, putting the country at risk of being exploited by money launderers and terrorist financiers.

Weaknesses in Investigating Money Laundering Cases

  • The Royal Grenada Police Force (RGPF) has received training on investigating money laundering cases, but most investigations have been related to fraud and theft, with little attention given to drug trafficking offenses.
  • There is no evidence that ML investigations were conducted in relation to drug trafficking matters.
  • Grenada’s legal framework for implementing anti-money laundering (AML) and combating the financing of terrorism (CFT) measures is incomplete.
  • No mechanisms are in place for identifying and proposing targets for designations or freezing assets without delay.

Risk Assessment Concerns

  • The country lacks a targeted risk-based supervision approach to non-profit organizations (NPOs), leaving them vulnerable to being misused for terrorist financing.
  • The evaluation highlighted concerns about the comprehensiveness of Grenada’s risk assessment, which did not identify any evidence of terrorist financing or proliferation financing.

Financial Institution Compliance

  • While some financial institutions and designated non-financial businesses and professions (DNFBPs) have demonstrated a better understanding of their AML/CFT obligations, there are still varying levels of compliance across the sector.
  • The DNFBP sector in particular was found to have less stringent AML/CFT measures, relying on long-standing relationships rather than customer profiling as a risk-mitigating measure.

CFATF Recommendations

  • Grenada must address these weaknesses and strengthen its financial regulations to prevent money laundering and terrorist financing.
  • The country must implement a targeted risk-based supervision approach to NPOs and develop a comprehensive risk assessment that identifies potential vulnerabilities.

Government Response

  • The government of Grenada has committed to implementing the necessary reforms to bring its AML/CFT regime in line with international standards.