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US Warns Financial Institutions to Scrutinize Transactions with Antigua and Barbuda
The US Treasury Department has issued an advisory warning financial institutions to exercise enhanced scrutiny over transactions routed into or out of Antigua and Barbuda, citing concerns over weakened anti-money laundering laws and lax supervision in the island nation’s offshore banking sector.
Concerns Over Weakened Anti-Money Laundering Laws
According to the advisory, recent actions taken by the government of Antigua and Barbuda have significantly eroded its ability to prevent money laundering through its offshore accounts. The changes include:
- Strengthening bank secrecy laws
- Limiting the scope of investigations
- Undermining international cooperation
“We believe that these actions will undermine US efforts to crack down on international money laundering,” said Under Secretary for Enforcement James E. Johnson. “It’s essential 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.”
Importance of Vigilance in Detecting Money Laundering
The advisory notes that in November 1998, the government of Antigua and Barbuda amended its Money Laundering (Prevention) Act, which had a significant weakening effect on the law. The changes also included vesting authority for supervising the offshore financial services sector with a new International Financial Sector Authority, whose board includes representatives from the offshore banks it is supposed to regulate.
This move violates the Basle Principles, widely accepted international standards for bank supervision. The Treasury Department’s advisory is available online and serves as a reminder of the importance of vigilance in detecting and preventing money laundering activities.
Financial Institutions in Antigua and Barbuda Must Comply with Regulations
The US warning comes at a time when small financial institutions in Antigua and Barbuda are under increased scrutiny to comply with anti-money laundering regulations. The island nation’s compliance programs must be robust enough to prevent money laundering activities, which could lead to severe penalties for non-compliance.
Financial institutions in Antigua and Barbuda should take note of the US Treasury Department’s advisory and review their existing policies to ensure they meet international standards. Failure to comply with anti-money laundering regulations may result in reputational damage and regulatory consequences.