FINANCIAL Action Task Force (FATF) President T. Raja Kumar has reiterated a plea for Jamaica to close the gaps in its action plan to avoid a possible move to the dreaded “black” list, which would mean serious implications for the country in carrying out international transactions.

Kumar’s comment comes following the three-day plenary meeting in Paris, France, where delegates from over 200 jurisdictions voted on a number of decisions surrounding the fight against money laundering and terrorism financing. While no country left the grey or black lists, Cameroon, Croatia and Vietnam were added to the grey list which is designated for jurisdictions under increased monitoring for money laundering and terrorism financing.

With respect to the Caribbean, the Cayman Islands got its first signal that it might be removed from the grey list following an on-site visit by designated experts. This also applied to Albania, Jordan and Panama whose progress will be verified as they conclude their action plans. However, the same could not be said for Barbados, Haiti and Jamaica, which have all been given an October 2023 warning before the intergovernmental organisation considers its next steps.

“Jamaica actually entered the grey list in February of 2020. Since then, I note that Jamaica has taken steps towards improving its anti-money laundering [and] combatting the financing of terrorism regime. Some of the things that Jamaica has done to enhance its regime include enhancing the risk understanding on money laundering and terrorism financing, and increasing the capacity in terms of its investigative resources. However, there are still major gaps, and the country needs to take further action as all of the deadlines in its action plan expired last year in January,” Kumar told the Jamaica Observer at the press conference held on Friday.

The FATF highlighted in its February report that it would consider next steps for Jamaica if it didn’t demonstrate significant progress in completing its action plan by this month. This report also highlighted that the next steps would include, “calling on its members and urging all jurisdictions to apply enhanced due diligence to business relations and transactions with Jamaica”. That would mean Jamaicans conducting business outside of the country could find it difficult to do so.

This message was mentioned again in the June report with the October deadline, which highlights the seriousness of the situation.

One doesn’t have to look too far, and a simple observation of the recent addition of Myanmar reveals that it was warned in June 2022 and moved to the black list (or high-risk jurisdictions), subject to a call for action by October. According to a Burma News International (BNI) article on March 7, “Some businessmen have said that being on the FATF black list makes international trading harder for Myanmar and makes moving cash between international bank accounts and Myanmar bank accounts more complicated. Though the value of the Myanmar kyat (MMK) had already dropped before, when Myanmar was put on the FATF black list in October 2021, the kyat’s value dropped even further.” The kyat is Myanmar’s currency.

Jamaica’s fifth enhanced, follow-up report and technical compliance re-rating report for December 2022 highlighted that the country was compliant and/or largely compliant on 33 out of 40 recommendations. Six recommendations were listed as compliant, 27 as largely compliant, and seven as partially compliant.

Jamaica’s upper and lower Houses of Parliament passed the Companies (Amendment) Act 2023 in March, which Finance Minister Dr Nigel Clarke highlighted would address three out of four outstanding items with the FATF. In his parliamentary update Dr Clarke mentioned that nine out of 13 actions were largely met .

Sunday Finance reached out to Dr Clarke for a comment relating to the FATF’s remarks but did not receive a response up to press time.

“The FATF is thus urging Jamaica to address its remaining action items. And let me just cite two examples of what remaining items are: One is ensuring adequate risk-based supervision of its non-financial sector, and the second is demonstrating the implementation of its beneficial ownership framework. Quite a number of these issues actually relate to implementation, and so I urge the Jamaican authorities to continue with the efforts to fully implement the FATF’s standards, and to focus on getting results through sound and good implementation,” Kumar added in his remarks to Sunday Finance.

The June report listed: adequate risk-based supervision of designated non-financial businesses and professions (DNFBPS) sectors; demonstration that the beneficial ownership (BO) information is available on a timely basis to competent authorities; and that effective, proportionate, and dissuasive sanctions are applied, as the key outstanding items.

The Jamaican Government won its case against the Jamaica Bar Association at the Privy Council earlier this year, which was one of the last DNFBPS to bring under an oversight framework. Also, the Financial Service Commission launched a risk-based supervisory framework for the non-deposit taking financial sector in 2022, with the Bank of Jamaica implementing a risk-based supervisory approach for money service businesses as well.

The FATF will continue to drive global compliance in the first half of 2024 regarding virtual assets and virtual asset service providers, at a time when three quarter of jurisdictions are partially compliant or not compliant with the FATF’s requirements under Recommendation 15. The next FATF plenary and working group meetings will be held between October 23 – 27 in Paris.

“This week the FATF determined that the Cayman Islands have substantially completed its action plan and the determination has been made that this warrants an on-site assessment. To give you an idea what this on-site assessment involves, a team of experts will go down to the Cayman Islands and confirm and verify the progress that the Cayman Islands has achieved, and determine that the measures the Cayman Islands has put in place that these are sustainable and, finally, that there is a high-level political commitment to ensuring the continuity and full implementation of the remaining items so the plenary can then decide whether to remove the Cayman Islands from the grey list —and we expect to have the report from the on-site at the plenary in October,” Kumar closed on the possibility of the Cayman Islands being removed from the grey list.