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Antigua and Barbuda’s Banking Secrecy Laws Under Fire as US Warns of Money Laundering Concerns
The US Treasury Department has issued a stern warning to American banks and financial institutions, urging them to exercise heightened scrutiny over all transactions linked to Antigua and Barbuda due to concerns that the island nation’s government is significantly weakening its anti-money laundering laws and oversight of offshore banking.
Background
Antigua and Barbuda’s offshore financial sector has been under scrutiny for some time. The Treasury Department has cited lax supervision and a culture of bank secrecy as major concerns.
Recent Developments
In November 1998, the Antiguan government amended its Money Laundering (Prevention) Act in a way that:
- Strengthened bank secrecy
- Limited the scope of investigations
- Hindered international cooperation
Additionally, the government shifted oversight of the offshore financial services sector to a new International Financial Sector Authority. However, this move has been deemed a violation of the Basle Principles, widely accepted international standards for bank supervision.
US Warning
Under Secretary for Enforcement James E. Johnson stated: “We believe that recent actions taken by Antigua and Barbuda will undermine US efforts to crack down on international money laundering through its offshore accounts. It is important for US financial institutions to give enhanced scrutiny to all transactions into or out of Antigua and Barbuda to guard against the laundering of criminal proceeds.”
Advisory
The Treasury Department’s advisory has been made available online, urging American banks and financial institutions to exercise heightened scrutiny over all transactions linked to Antigua and Barbuda.
Key Points
- The US Treasury Department is concerned about the weakening of anti-money laundering laws in Antigua and Barbuda
- Recent actions by the Antiguan government have undermined international efforts to combat money laundering through offshore accounts
- American banks and financial institutions are urged to exercise heightened scrutiny over all transactions linked to Antigua and Barbuda