Financial Crime World

Central Bank of Jamaica Adopts Risk-Based Approach to Combat Money Laundering and Terrorist Financing

The Central Bank of Jamaica has taken a significant step in strengthening its anti-money laundering (AML) and combating the financing of terrorism (CFT) measures by adopting a risk-based approach. This approach aims to identify and mitigate potential threats to the financial system and national security.

Identifying Risks

In 2021, the Central Bank conducted a second national risk assessment, which identified several risks related to money laundering and terrorist financing. While some of these risks have been mitigated through regulatory measures for financial institutions (FIs) and designated non-financial institutions (DNFIs), others remain significant.

Key Risks

The report highlights that the Central Bank’s main AML/CFT/CFP risks stem from:

  • Corrupt officers and employees
  • Undue influence from the private sector or politically exposed persons
  • The use of its services to commit or facilitate money laundering or terrorist financing

Additionally, the Banking Department within the Central Bank has identified specific operating risks related to:

  • Transactions involving changing out local coins for Jamaican dollar notes
  • High cash value transactions
  • Handling mutilated bank notes

Measures Taken

To address these risks, the Central Bank has implemented measures to:

  • Enhance due diligence processes
  • Improve risk assessments
  • Strengthen internal controls
  • Increase awareness and commitment to AML/CFT/CFP among clients and stakeholders

“We recognize that money laundering and terrorist financing pose significant threats to our financial system and national security,” said a Central Bank spokesperson. “By adopting a risk-based approach, we aim to proactively identify and mitigate these risks, ensuring the integrity of our operations and maintaining public trust.”

Ongoing Efforts

The adoption of this risk-based approach is seen as a critical step in the Central Bank’s efforts to combat money laundering and terrorist financing. The bank has committed to regularly reviewing and updating its AML/CFT/CFP policies and procedures to ensure compliance with international standards.

As part of its ongoing efforts, the Central Bank will:

  • Continue to engage with stakeholders, including financial institutions, government agencies, and law enforcement authorities
  • Share information and best practices in AML/CFT/CFP
  • Invest in training programs for employees
  • Support national initiatives aimed at strengthening the country’s AML/CFT/CFP framework

Conclusion

The Central Bank of Jamaica’s adoption of a risk-based approach to combat money laundering and terrorist financing demonstrates its commitment to ensuring the integrity of its operations and maintaining public trust. The bank’s efforts will contribute significantly to the overall effectiveness of Jamaica’s anti-money laundering and combating the financing of terrorism regime.