Grenada’s Efforts to Combat Money Laundering and Terrorist Financing Face Scrutiny

A recent evaluation report by the Caribbean Financial Action Task Force (CFATF) has highlighted several concerns regarding Grenada’s efforts to combat money laundering (ML) and terrorist financing (TF).

Investigative Capacity and Risk Assessment

While the Royal Grenada Police Force (RGPF) has demonstrated its capacity to investigate complex ML cases, there are concerns about the comprehensiveness of the country’s TF risk assessment. Grenada has indicated that it has not identified any evidence of terrorism or TF in the country, which has placed its vulnerability to TF at medium-low.

Legal Framework and Designation Mechanisms

The report also noted that Grenada does not have mechanisms in place for identifying and proposing targets for designation pursuant to United Nations Security Council Resolution (UNSCR) 1267 and its successor resolutions. Additionally, the country’s legal framework for implementing anti-terrorist financing measures is lacking, with no mechanism for freezing assets without delay.

Non-Profit Organizations and Oversight

Furthermore, the report highlighted concerns about the misuse of non-profit organizations (NPOs) for TF criminality. While NPOs are required to register with the Financial Intelligence Unit (FIU) and the Anti-Money Laundering/Combating the Financing of Terrorism Commission, there is a lack of oversight and guidance provided to these organizations.

Proliferation Financing and International Obligations

The report also noted that Grenada does not have laws or measures in place to address proliferation financing. However, some financial institutions and designated non-financial businesses and professions (DNFBPs) were aware of their international obligations and regularly referred to the United Nations Security Consolidated List when on-boarding new customers.

Preventive Measures

In terms of preventive measures, while some FIs in the sector have demonstrated a better understanding of their AML/CFT legal obligations, there are varied levels of understanding across the DNFBP sector. There is a high level of compliance resources available, but these are not consistently enforced across all sectors.

Recommendations and Next Steps

The CFATF report has called on Grenada to address these concerns and strengthen its efforts to combat ML and TF. The country must take steps to improve its risk assessment, legal framework, and oversight mechanisms to prevent the misuse of NPOs and ensure effective implementation of anti-terrorist financing measures.