Despite making significant progress in strengthening Jamaica’s anti-money laundering/counter-financing of terrorism (AML/CFT) framework, Minister of Finance Dr Nigel Clarke says the court proceedings between the Jamaican Bar Association and the Government will delay the country from leaving international money-laundering lists.

“… Because it is before the court I don’t want to say too much on it, but let me say this, that it is unlikely that Jamaica will emerge from the [Financial Action Task Force] FATF grey listing and from the ancillary listing that other countries or regional blocks have put Jamaica on without a satisfactory resolution… meaning without the legal profession being brought under the AML/CFT framework,” Clarke said during the Jamaica Bankers Association and Jamaica Institute of Financial Services 10th annual AML/CFT virtual conference yesterday.

In June 2014, the order bringing attorneys under the Proceeds of Crime Act as Designated Non-Financial Institutions was passed and the General Legal Council (GLC) was the designated competent authority. However, later in October 2014, the Jamaican Bar Association instituted an action against the Government and the GLC to declare the regime unconstitutional.

Between November 2014 and January 2018 the matter has been visited and revisited in court to have the motion carried. Initially, an injunction was granted to suspend the GLC’s authority to monitor compliance, which was dismissed by the Full Court in 2017.

Following the turn of events, the association appealed the decision, and in 2018 the Court of Appeal reinstated a limited injunction, the effect of which is to prevent the GLC, as competent authority, from monitoring AML compliance by attorneys, which currently remains in effect.

“That provides a little bit of complication…even if we were to address everything and this one was outstanding, whether it’s in the courts or not in the courts, as long as it’s outstanding Jamaica is unlikely to emerge from the grey listing,” he argued.

“Which means there is a lot of work to be done, but I don’t want to comment any further because it is a matter before the court; however, I think I have a duty to ensure that you’re aware of where Jamaica stands,” Clarke contended.

According to the minister, when the country was rated by the FATF in 2015 and the report published in 2017, it highlighted that Jamaica contained structural deficiencies in its AML/CFT regimes.

The FATF is an intergovernmental organisation founded in 1989 to develop policies to combat money laundering.

Jamaica was added to the FATF’s grey list in February 2020 and made a high-level political commitment to work with the FATF and Caribbean Financial Action Task Force to strengthen the effectiveness of its AML/CFT regime.

Additionally, last year the European Union blacklisted Jamaica among other nations that pose financial risks due to their AML/CFT shortfalls.

Clarke pointed out that in December 2020, Jamaica’s framework was reassessed and was found to be compliant in 12 recommendations that were previously non-compliant and/or partially compliant, resulting in the country now being compliant in 27 of the 40 FATF recommendations.

“The other part of the news is that we still have 13 more recommendations on which we have to improve our status. Jamaica’s action plan calls for immediate action to address these 13 which falls into what FATF calls five immediate outcomes,” Clarke continued.

According to him, the outcomes include conducting a national risk assessment, using risk-based supervision, preventing the misuse of legal persons for money laundering and terrorist financing, ensuring that money-laundering offences are prosecuted, and to ensure that the non-profit sector is not vulnerable to terrorism financing.

Dr Clarke noted that Jamaica has undertaken a number of measures to implement the required recommendations.

These include amendments to the Proceeds of Crime Act; the Terrorism Prevention Act; the United Nations Security Council Resolution Implementation Act; amendment to the Companies Act; further enhancement by AML/VET supervisors, such as Bank of Jamaica and Financial Services Commission, targeting their supervisory practices and measures to develop the required risk-based approach to supervision.

“We want to complete our action plan and to get it done within a reasonable period of time, thereby improving our reputation globally, but more important we want to do it for ourselves. The first beneficiary of an improved AML/CFT framework is Jamaica…so we want to do this for us and not for some external force. Long gone are the days, hopefully, when we only act due to external developments,” Clarke said.

“We have other work to do in the betting, gaming and lottery sector, the real estate sector, and the public accountant sector… that work is progressing well and we expect to be able to report further successes,” the minister continued.

Clarke added that the Ministry of Industry, Investment and Commerce and the Ministry of Agriculture are advanced in bringing the beneficial ownership disclosure of Jamaican entities legislation to the Houses of Parliament and will require an amendment to the Companies Act.

An amendment was made in 2017 which required disclosure of beneficial ownership in excess of 50 per cent, however after review from FATF, it indicated that international standards require the disclosure to be made at beneficial levels greater than 20 per cent.

Clarke said, “… More important than the threshold level for disclosure is to ensure that the Companies Act has a range of dissuasive penalties that can be applied against companies and directors who fail to make that disclosure that could be made available to competent and designated authorities”.