Blacklist threat
FATF gives Jamaica June deadline to deal with money laundering risks

The Financial Action Task Force (FATF) has given Jamaica and other Caribbean territories a deadline of June to demonstrate significant progress in completing their action plans or possibly be moved to the dreaded 'black' list currently encompassing Myanmar, Iran and the Democratic Republic of Korea (North Korea).

Although Jamaica had recent success at the Privy Council against the Jamaica Bar Association with respect to the anti-money laundering reporting regime for attorneys, the global money laundering and terrorist financing watchdog said in its update, "The FATF strongly urges Jamaica to swiftly demonstrate significant progress in completing its action plan by June 2023 or the FATF will consider next steps, which could include calling on its members and urging all jurisdictions to apply enhanced due diligence to business relations and transactions with Jamaica."

The warning was given at the FATF's plenary and working group meetings which were held between February 20 and 24 with the next meeting to be held between June 18 and 23 in France. The FATF's plenary year ends in June with three meetings held in October, February and June.

Jamaica's original timeline to complete its action plan was January 2022 after it was initially placed on the 'grey' list in February 2020. Following that period, the FATF noted in its October report that Jamaica had to demonstrate significant progress by February 2023 in completing its action plan or the international entity would consider next steps if there is insufficient progress.

Jamaica is compliant and/or largely compliant with 27 out of 40 action items with the remaining 13 related to bringing all designated non-financial businesses and professions (DNFBPs) into the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regime and ensuring adequate, risk-based supervision in all sectors and ensuring that the beneficial ownership (BO) definition is in line with the FATF standards.

Minister of Finance Dr Nigel Clarke noted that the amendments to the relevant legislations, including the Companies Act and finalisation of charities regulations should be brought to Parliament by March 2023. Jamaica was just removed from the European Union's (EU's) list of non-cooperative jurisdictions for tax purposes last week.

The FATF is an intergovernmental organisation aimed at combating money laundering and terrorism financing. Jurisdictions under increased monitoring are described as being on the 'grey' list while others on a subject to a call for action, are placed on the 'black' list. There are currently 26 jurisdictions on the 'grey' list and three on the 'black' list. Cambodia and Morocco were removed from the 'grey' list while Nigeria and South Africa were added to the list. Barbados and The Cayman Islands are also on the 'grey' list with the FATF considering the 'next steps' for both Caribbean jurisdictions. Russia was suspended as a member of the FATF on the anniversary of its invasion of Ukraine.

Myanmar was the latest country to be added to the 'black' list in October after being given the current warning Jamaica is facing. The consequences of being on the list are quite significant for any country.

An article in Central Banking stated, "The move could severely impair Myanmar's ability to participate in international financial transactions."

The Financial Action Task Force (FATF) has set a June deadline for Jamaica to make significant progress on its action plan. (Photo: Victor Tonelli)
BY DAVID ROSE Observer business writer

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