Antigua and Barbuda: Concerns Over Money Laundering Regulations
Warning Issued to Banks and Financial Institutions
The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued a warning to banks and financial institutions worldwide to exercise heightened scrutiny when dealing with transactions involving Antigua and Barbuda. The advisory, dated April 1999, raises concerns over the island nation’s lax anti-money laundering laws and oversight of its offshore banking sector.
Changes Weakening Anti-Money Laundering Laws
According to FinCEN, Antigua and Barbuda has amended its Money Laundering (Prevention) Act in a way that significantly weakens it, making it easier for illicit funds to flow through the country’s banks. Additionally, the government has changed the supervision of its offshore financial services sector by vesting authority over it in a new International Financial Sector Authority, whose board of directors includes representatives from the very institutions it is supposed to regulate.
Red Flags Raised Among Regulators and Law Enforcement Officials
These changes have raised red flags among regulators and law enforcement officials worldwide, including those in the US, UK, and other nations. The Treasury Department believes that these actions threaten to create a “haven” for money launderers and other criminals, undermining international efforts to combat financial crime.
Enhanced Scrutiny Advised
As a result, FinCEN is advising banks and financial institutions to exercise enhanced scrutiny when dealing with transactions involving Antigua and Barbuda or its offshore banking sector. This includes:
- Transactions routed into or out of the country
- Those involving entities organized or domiciled in Antigua and Barbuda
Suspicious Activity Reporting
Institutions subject to suspicious activity reporting rules should carefully examine the available facts relating to any such transaction to determine if it requires reporting in accordance with those rules. Enhanced scrutiny is especially important for transactions involving:
- Antigua and Barbuda offshore banks
- Commercial banks licensed to do business in the country
- Institutions that act as intermediaries between these two sectors
Reporting Requirements
The Treasury Department will consider any report related to a transaction described in this advisory to constitute a report of a suspicious transaction relevant to a possible violation of law or regulation.
Contact Information
FinCEN’s Advisory is a product of the Financial Crimes Enforcement Network, U.S. Department of the Treasury, and can be obtained by contacting the Office of Communications at:
(703) 905-3773 (phone) (703) 905-3885 (fax)