Executive Director of the Financial Services Commission (FSC) Brian Wynter has urged agencies in the financial sector to put appropriate anti-money laundering measures in place, or risk being prosecuted for breaches of the Anti-Money Laundering Act.

“The importance of having appropriate systems in place, which are effectively implemented and maintained, cannot be over-emphasised,” Wynter said.

He was speaking at an Anti-Money Laundering training seminar, on June 28, at the Knutsford Court Hotel in Kingston. The meeting was targeted at professionals in the insurance and securities industries and was designed to promote consistent and effective standards for the regulation and supervision of the financial services sector.

As a competent authority under the Money Laundering Act, the FSC has the responsibility to advise, supervise and provide guidance to regulated entities in the securities and insurance industries in their responsibilities under the Act and Regulations.

Wynter said the FSC has been proceeding with a programme, which involved the development of a regulatory regime, the establishment and maintenance of anti-money laundering and anti-fraud protocols, and the development and implementation of monitoring and enforcement mechanisms.

In developing the regulatory regime, consideration has been given to existing legislation, the 40 recommendations of the Financial Action Task Force (FATF), International Monetary Fund (IMF) and World Bank, criteria and guidelines issued by the international regulatory bodies for securities and insurance.

But Wynter noted that even with these guidelines, it was up to the relevant organisations to make sure that they had appropriate counter-offensive mechanisms in place, including proper documentation and code of conduct, operational policies and procedures and ensuring that staff was properly trained.

“If you take the anti-money laundering programme and seek to achieve best practices, I think you will find that there are indirect benefits to you in terms of the management of your enterprise and knowledge of your customers,” he said.

Meanwhile, Nyron Davidson, Financial Technical Adviser with the Caribbean Anti-Laundering Programme (CALP), said that money laundering was one of the world’s fastest growing crimes, involving highly organised and sophisticated criminal networks, whose primary objective was to legitimise ill-gotten funds through the financial sector.

Because of their enormous wealth and influence, these criminals have the potential to corrupt bankers and public officials, thereby threatening the integrity of the financial and economic systems, governments and society, he stated.

In 1999, it was estimated that US$600 billion in illicit funds was laundered through the world’s financial systems, and by 2002, the figure had risen to US$1.3 trillion.

Davidson said the Caribbean has not been spared, as with the tightening of controls in Europe and the United States, the region was seen as a soft spot for laundering. In fact, in 1999 it was estimated that US$50 billion passed through Caribbean institutions.

In addition, a number of countries in the region have been on the FATF black list as being non-co-operative in the fight against money laundering. These are Cayman Islands, the Bahamas, St Kitts and Nevis, Dominica, Grenada and St Vincent and the Grenadines. By 2003, most of these countries were removed.

The Caribbean Financial Action Task Force (CFATF) and CALP have been at the centre of the region’s response to the scourge. Set up in 1990, CFATF is an inter-governmental organisation comprised of 25 Caribbean and Latin American countries.

CALP was instituted in 1999 through funding from the European Union and the US State Department and supports the work of CFATF by designing strategies and mechanisms to fight against money laundering, including facilitating the investigation and prosecution of money laundering offences and facilitating the seizure and forfeiture of property associated with criminal activity.

In his presentation, Deputy Superintendent of Police Karl Plummer pointed out that with the increase in drug trafficking, drug dons have found new means of laundering their cash, such as promoting dances and stage shows, going into the real estate business or constructing hotels.

He said that financial institutions could assist law enforcement in identifying money launderers by providing biographical information on customers, providing detailed histories of accounts and supplying follow-up information when needed.