Financial Crime World

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Money Laundering Techniques and Prevention in Trinidad and Tobago: Key Risks and Challenges

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Trinidad and Tobago, one of the largest trading nations in the Caribbean, has been plagued by money laundering challenges for years. With its strategic location seven miles from Venezuela, the country is a key transit point for human trafficking, drug trafficking, and illegal activities.

Key Risks

Human Trafficking, Drug Trafficking, and Money Laundering

Human trafficking, drug trafficking, and money laundering are significant risks in Trinidad and Tobago. The country has been criticized for its lack of political will to tackle these issues, with less than 10% of criminal proceeds detected by the government.

Illicit Activities

  • Illicit tobacco is a major issue, and illegal gambling costs almost half a billion dollars in lost revenue.
  • Fraud is another major concern, with pyramid and Ponzi schemes being common, as well as informal savings and loan clubs which are unregulated.
  • In one notable case, an army official laundered $3.5 million in dirty money through such a scheme.

Casinos and Terrorism Financing

  • Casinos have also been a source of concern, having operated illegally until recently as private member clubs that were unregulated.
  • The country has also been plagued by terrorism financing risks, with a large number of citizens traveling to Syria and Iraq to fight for Islamic State.

Criminal Proceeds

An estimated $337 million to $844 million is laundered every year in Trinidad and Tobago, making it a significant concern for organizations operating in the region.

AML Policy Summary

Trinidad and Tobago has been criticized for its lack of political will to tackle money laundering, with low prosecution rates and weak capacity to detect and prevent these activities.

Although the legislation exists, enforcement is a key weakness. Officials are required to disclose income, assets, and liabilities annually, but hundreds do not comply.

  • Beneficial ownership reporting has been required since 2019, and the register is accessible to law enforcement.
  • The judiciary is also slow, with cases taking years to resolve.

Weaknesses

  • The gambling sector is a significant vulnerability due to its recent legalization, which has delayed legislative changes by six years.
  • The majority of laundering in Trinidad and Tobago takes place with cash, as the economy is mainly cash-based and one-third informal.
  • Unregulated financial systems such as informal savings clubs are often fronts for fraudulent schemes.

Corruption

Corruption is also a significant issue in the country, with law enforcement officials, customs agents, and government members being prosecuted for bribery and money laundering. The instability in Venezuela has contributed to an increase in trafficking through the country, including people, drugs, and cash.

Strengths

  • Trinidad and Tobago works closely with the US on drug control and law enforcement, as well as exchanging tax information.
  • The country participates in the Caribbean Basin Security Initiative, which aims to combat money laundering and other financial crimes.

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