Financial Crime World

Money Laundering Threats in Trinidad and Tobago: A Growing Concern for AML Compliance

Trinidad and Tobago, a major trading hub in the Caribbean, faces numerous challenges in the fight against money laundering. In this article, we will discuss the specific money laundering risks and regulatory landscape in Trinidad and Tobago.

Key Risks

  • Trafficking: Trinidad and Tobago’s strategic location has made it a significant transit point for humans, drugs, and money. Its proximity to Venezuela contributes to its role as a key source of drugs and people for trafficking.
  • Enforcement: With less than 10% of criminal proceeds being detected by the government, issues like illicit tobacco sales and illegal gambling contribute to a significant strain on the country’s resources, amounting to almost half a billion dollars.
  • Fraud: Fraud, including tax evasion, is a significant issue, accounting for many suspicious transaction reports. Pyramid and Ponzi schemes, unregulated savings and loan clubs,and other forms of fraud pose a significant risk.
  • Casinos: The recent legalization of casinos in Trinidad and Tobago brings new challenges. Previously, casinos operated as unregulated private member clubs, contributing to money laundering.
  • Terrorism: Trinidad and Tobago has had a concerning number of citizens traveling or attempting to travel to Syria and Iraq to fight for the Islamic State. Money remittance services and prepaid debit cards are possible channels for terrorist financing.

Criminal Proceeds

An estimated $337 million to $844 million is laundered annually in Trinidad and Tobago.

AML Policy Summary

Trinidad and Tobago is viewed as having a low level of political will and weak capacity to address money laundering. Some weaknesses include:

  • Legislative gaps: While there are laws in place, such as the Proceeds of Crime Act 2000, enforcement remains a significant issue. Hundreds of officials fail to disclose their income, assets, and liabilities annually. Since 2019, beneficial ownership reporting has been required, and the register is accessible to law enforcement.
  • Slow judiciary: The judicial system is seen as extremely slow, with cases taking years to be resolved.
  • Pyramid schemes: The government is currently considering legislation to outlaw pyramid and Ponzi schemes.

Main Money Laundering Laws

To strengthen the fight against money laundering in Trinidad and Tobago, familiarize yourself with the key legislation:

  • Proceeds of Crime Act 2000
  • Civil Asset Recovery and Management and Unexplained Wealth Act of 2019
  • Anti-Terrorism Act of 2005
  • Prevention of Corruption Act of 1987
  • Integrity in Public Life Act of 2000
  • Companies Act of 2019
  • E-Money Issuer Order of 2020
  • Gambling (Gaming and Betting) Control Act of 2021

Weaknesses

  • Gambling sector: With recent legalization, the sector poses an increasing risk. Powerful lobbies delay legislative changes.
  • Informal economy: Over one-third of the economy is informal, and unregulated financial systems like informal savings clubs can serve as fronts for fraudulent schemes.

Corruption and instability in Venezuela have also contributed to money laundering concerns.

Strengths

Trinidad and Tobago maintains close collaborations with the US on drug control and law enforcement, as well as sharing tax information. The country is also a participant in the Caribbean Basin Security Initiative.

For a comprehensive analysis of AML challenges and laws in Trinidad and Tobago and other Latin American and Caribbean countries, download the free VinciWorks guide.