The amount of cash laundered in Jamaica annually is unknown but the 'guesstimates' appear to put it at billions of dollars.

Eaton. says $50-b lost to corrupt practices

According to attorney Shirley-Ann Eaton, former legal advisor to the Jamaica Banker's Association, the financial sector is losing about $50 billion to corrupt practices, money laundering and fraud included.

The authorities know that much of the dirty money in the system comes from illegal narcotics trading. The Financial Investigation Department (FID), a division of the Ministry of Finance, says an estimated 120 metric tonnes of cocaine was transhipped through Jamaica last year, about three per cent or 3.6 tonnes of which was detected and seized.

The market value of the drug which moved through Jamaica, according to FID, was US$899 million ($55 billion); while the seizures were valued at US$123.5 million ($7.6 billion).
It is FID's job, along with law enforcement and regulators, to identify the loopholes for illegal money, plug them, and prosecute the money launderers.

The consequence of it all is that it erodes some of your privacy as government increasingly takes on the role of big brother, and it requires financial companies to keep a wary eye on clients.

Regular bank customers or persons doing business with a financial institutions are now required to provide sufficient personal details to the companies so that the authorities can satisfy themselves that the funds were legally obtained.

Transactions over US$50,000 - over US$8,000 for cambios - have to be reported and are liable for investigation.
And, any change in your transactional behaviour that your financial service provider deems as suspect, could be investigated, even if you were only depositing funds obtained, say, as a beneficiary of a will.

In short, your financial activities are under closer scrutiny than ever before. And, it all evolves out of our international undertaking to help make the world safer by stemming money laundering and terrorism financing.

It remains unclear whether Jamaica has any sort of link to the latter, but the Americans believe that drug proceeds are a strong source of revenue for terrorists.

The finance ministry - as part of its institutional preparedness to administer the laundering laws - has reformatted its Revenue Protection Department and renamed it the Financial Intelligence Unit (FIU).

The FIU, under which FID falls, has sections dealing with administration, asset management, legal issues, law enforcement, intelligence and investigation.
FIU analyses; FID investigates.

Robert Farr, FID director of intelligence, says his department not only investigates corporate fraud and other financial crimes, but also tax evasion. "Knowing your customers is key to the whole anti-money laundering fight, of which financial service workers are the gate keepers," said Farr.

In fact, when a financial crime is committed, FID also checks to see if the institution effectively followed the rules to prevent its occurrence.

Those rules include:

. filing threshold reports in relation to cash transactions of US$50,000 and over, or US$8,000 in the case of cambios;

. proper customer identification and verification;

. creating a risk profile of the customer, which includes source of funds, frequency and scale of activity, and the customer's geographical sphere of activity;

. determining whether the customer is acting on his/her own behalf or an unseen third party's; and

. ongoing scrutiny of transactions and reporting of behaviour that does not fit the client's original profile, or behaviour that is otherwise suspicious.

And if there is even a suspicion that the financial institution's staff failed to carry out the required due diligence checks, they may be charged and tried before the courts. Penalties include imprisonment.

If a financial service employee attempts to warn the client that he/she is been investigated, said Eaton, that person can be fined up to $2 million and/or imprisoned for up to two years.
The fine for disclosure by a corporate body is $6 million.

But, said Eaton, in circumstances where the company files a suspicious transaction report, and the funds are found to have been laundered, the directors and employees of the financial institution are exempt from prosecution or criminal, civil or administrative liability.

The attorney believes the stricter guidelines will help to weed out fraudsters and dilute some of the losses from fraud.
"Often times, criminals do not go back to a financial institution that seeks too many specifics. So when they are turned down by one, they will go to others," said Eaton.

"It is the institutions' responsibility to notify others of those turned down."

Eaton names banks, credit unions, building societies, mortgage companies, trust companies, insurance companies, mutual funds, savings and loans institutions, development institutions, cash remittances firms, underground banking systems, travel agencies, hotels, attorneys, accountants, Internet service providers and automobile dealers as high risk money laundering sectors.

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