Concerns being expressed by informed officials in Barbados and elsewhere in the region over the implications for the country’s international image arising out of the perception that the island is a soft target for money laundering are a microcosm of a wider problem facing other member countries of the Caribbean Community (CARICOM).
The particular criticism being made of the Caribbean is that while the respective territories all have in place legislation that addresses the issue of money laundering, governments in the region may be guilty of evincing a less than assertive posture in the matter of enforcement, thereby causing sections of the international community to see those countries in a negative light.
This view was expressed recently by Barbadian attorney-at-law and the country’s former Director of Business Lynette Eastmond during a television programme. Eastmond is quoted as saying that while Barbados has a “whole suite of legislation” dealing with matters such as anti-money laundering and the proceeds of crime, there is little being done by way of prosecutions. The dearth of official action, she asserts, may raise alarm bells for some of the international organisations, given that there is a pre-existing perception that there is corruption in this country.
Eastman’s perspective on the posture of the authorities towards money laundering may well mirror a much larger regional opinion in relation to the enforcement of money-laundering laws in the region as a whole.
And according to Eastman, the Barbadian authorities and the citizenry as a whole ought not to be surprised when reporting to their respective capitals, diplomats stationed in the country’s capital file reports that reflect the reality of money-laundering in Barbados. Diplo-mats, she asserted, are going to reflect what people say about corruption and bribery in their reporting to their home capitals. This, she says, is likely to raise questions in the minds of other countries about the dichotomy between the existence of anti-money laundering laws (AML), on the one hand, and the fact that there is no evidence of corresponding prosecutions, on the other.
The sentiments expressed by Ms. Eastmond were echoed by Canada-based financial professional, Dr. Terrence Yhip, who, in contributing to the same television programme cautioned that there was the danger of perception often being mistaken for reality. Yhip, who is the author of the book “From Rags to Riches: Is Guyana Ready for the Oil Bonanza?” asserted that he was making the point in the context of Barbados having been slipping on the international Corruption Index since 1979. Yhip said that the European Commis-sion’s faulting of The Bahamas’ anti-money laundering regime was not based on the lack of legislation but on “the lack of enforcement… and I think the same thing probably applies to Barbados, the perception that people are not brought to justice. We could have all the legislation in the world, all the governance rules, but if you have no enforcement it is useless… They might have all the rules of governance and corruption, but what is going to happen if the courts are not powerful enough or independent enough to bring people to justice?” Yhip asked.
Over the years the Caribbean has come to be associated with money-laundering and other forms of financial fraud notwithstanding what governments and professional organisations have said have been their efforts to enact anti-money laundering and counter-terrorism financing rules. The depth of the problem is reflected in extra-regional moves to sanction countries that have been perceived as transgressors of anti-money laundering and tax transparency practices, the shutting down of correspondent bank relations between large extra-regional banks and their Caribbean counterparts arising out of regulatory pressures over money-laundering being one of those.
Analysts of global money-laundering have posited that the advent of COVID-19 has brought with it a number of attendant issues that have challenged state-implemented AML systems. These issues, observers say, are likely to persist and arguably even grow worse in 2021.
Eastmond, meanwhile, has noted that, whereas anti-money laundering attention customarily targets financial institutions, a case exists for the net to be cast even wider. “In any kind of transaction where you can have large amounts of cash being transferred, such as in real estate transactions, we will find that individuals or organisations in the money laundering framework are interested in those. So they’re interested in accountants; they are interested in lawyers; they’re interested in real estate; yes, the financial institutions – anyone who they consider to be a gatekeeper,” she explained.
And alluding to recent European Union criticisms of the prevailing anti-money laundering regime in The Bahamas and Barbados, Yhip said that while the two CARICOM countries both have “all the legislation,… what the EU Commission faulted The Bahamas recently for was not the lack of legislation, but the lack of enforcement, that’s where they nailed them on the blacklist. And I think the same thing probably applies to Barbados, the perception that people are not brought to justice.”
A source close to the financial system in Guyana told the Stabroek Business last week that he believed that the indifference of the authorities here, was, “as is the case elsewhere in the region,” largely responsible for the prevailing ineffectiveness in the application of AML laws and procedures.
