Financial Crime World

Jamaica’s Revamped AML/CFT Guidance Notes: Combating Money Laundering and Terrorist Financing

Updating Regulatory Expectations in the Caribbean Island Nation

The evolving global financial landscape has led to an overhaul of Jamaica’s Guidance Notes on the Prevention of Money Laundering and Countering the Financing of Terrorism, Proliferation and Managing Related Risks. Released by the Asset Recovery Agency (ARA), these updates aim to strengthen Jamaica’s regulatory regime against money laundering and terrorist financing.

  • New version of Guidance Notes: The revised Guidance Notes, published on June 14, 2018, in The Jamaica Gazette Extraordinary 352, encourage financial institutions to adopt a risk-based approach for their AML/CFT policies and procedures.

Key Changes in the Guidance Notes

  • PEPs and virtual currencies: A refocused approach to Politically Exposed Persons (PEPs) and the phenomena of virtual currencies.
  • Consequences of non-compliance: Obligations under the new guidelines could result in sanctions for violation of the AML/CFT Rules issued under the Banking Services Act (BSA) and the Bank of Jamaica Act.

Understanding the Guidance Notes

  • Section 1: Outlines the legal status and applicability of the document.
  • Key terms: Defines terms such as “financial institution,” “competent authority,” and “designated non-financial institutions.”

Background Information

  • Section IA: Presents background information on money laundering and terrorist financing, emphasizing financial institutions’ obligation to take active steps to prevent these illegal activities.

Compliance Requirements

AML/CFT laws in Jamaica require reporting entities to consider any relevant regulatory guidance, including these Guidance Notes, when determining whether an offense has been committed. Failure to comply may result in legal and regulatory consequences, including fines, sanctions, and license revocation for financial and non-financial institutions.

Mandatory Obligations

Under the revised Guidance Notes, financial institutions are expected to adhere to mandatory obligations, including:

  1. Risk-based frameworks
  2. Know your customer (KYC) requirements
  3. Customer due diligence (CDD)
  4. Special guidance for listed entities and UNSCR resolutions
  5. Nomination officer regimes
  6. Compliance monitoring
  7. Board responsibility
  8. Employee integrity and awareness
  9. Transaction monitoring and reporting
  10. Record keeping
  11. Additional guidance for listed entities and UNSCR resolutions

Conclusion

The revised Guidance Notes for the Prevention of Money Laundering and Countering the Financing of Terrorism, Proliferation and Managing Related Risks have been substantially updated to align with international standards and help prevent Jamaica from becoming a hub for illicit financial activities. The revised Guidance Notes incorporate the latest FATF 40 Recommendations and guidance papers and seek to encourage financial institutions to apply a risk-based approach to their respective AML/CFT policies and procedures.