Financial Crime World

Grenada’s Financial Intelligence Unit Faces Concerns Over Money Laundering and Terrorist Financing

Caribbean Financial Action Task Force Raises Red Flags

The Caribbean Financial Action Task Force (CFATF) has released its Fourth Round Mutual Evaluation Report on Grenada, highlighting concerns over the country’s financial intelligence unit’s ability to investigate money laundering (ML) and terrorist financing (TF).

Investigations and Training

  • Investigators within the Financial Intelligence Unit (FIU) have received continuous training in investigating ML, but these investigations were primarily related to fraud and theft cases.
  • The report noted that drug trafficking offenses rarely result in ML investigations.

Power to Investigate and Confiscate

The FIU was criticized for not using the full extent of its powers under the Proceeds of Crime Act (POCA) to deprive criminals of the instrumentalities of their crime. Additionally, there was no evidence of confiscation of falsely or undeclared cross-border movement of currency or bulk cash payments.

Terrorist Financing Concerns

  • The report highlighted concerns over Grenada’s comprehensive risk assessment, citing a lack of understanding about the country’s vulnerability to terrorist financing.
  • The Royal Grenada Police Force (RGPF) has designated a TF desk at Special Branch, but there is a need for specialized TF training for potential TF analysis and investigations.
  • The report criticized Grenada’s legal framework for implementing TF sanctions under United Nations Security Council Resolutions 1267 and 1373. The country lacks mechanisms for identifying and proposing targets for designation and does not have legislation in place to freeze assets without delay.
  • Non-profit organizations (NPOs) are required to register with the FIU and the AML/CFT Commission, but there is no risk-based supervisory approach or oversight of the sector.

Proliferation Financing

The report concluded that Grenada has not implemented measures to address proliferation financing (PF), citing a lack of laws or measures in place to combat PF under United Nations Security Council Resolutions.

Response and Reforms

In response to the report’s findings, Grenada has committed to implementing several reforms, including:

  • Improving its risk assessment
  • Enhancing TF training for investigators
  • Improving its legal framework for implementing TF sanctions

The CFATF evaluation is a critical assessment of Grenada’s financial systems and institutions, providing recommendations for improvement to combat ML, TF, and other financial crimes.