Barbados PM challenges global AML regime
A Caribbean leader struck a blow against the world’s most powerful countries — those that control what she warned is a flawed global anti-money laundering regime — during a multilateral meeting attended yesterday by the Premier, David Burt.
Barbados Prime Minister Mia Mottley was speaking at the Caribbean Financial Access Roundtable in which she was highly critical of those controlling the AML regime as disproportionately targeting small, developing countries, considering “the small risk they represent compared to large developed nations where most of the actual money laundering is taking place”, the Cayman Compass reported.
She called for reform, as reported by the Barbados Government Information Service, including more focus on money laundering itself.
The BGIS quoted her suggestion: “An example of this would be for us to demand that no country can be placed on anti-money laundering sanctions lists unless there is also actual evidence of the material money laundering.”
She argued that to simply sanction a country on the basis of a list because officials wanted them to do better would be to have a disproportionate consequence on the country without evidence of there being money laundering.
She said the current system of AML sanctions actually enables criminals because they just need to simply avoid the small, undeveloped countries bearing the weight of the sanctions and opt for the large rich countries that never get sanctioned.
In fact, the Barbados PM suggested, according to the Cayman Compass, that the current system makes it too easy for money launderers.
They quoted her: “And if we doubted how easy it was for them, we only need to follow the trail of the confiscations taking place globally, as a result of the war in Ukraine, and where the properties are being confiscated, where the yachts are being confiscated.”
Those present for the remarks included a delegation of Financial Services Committee members of the US Congress, Caricom heads of state and government, as well as senior North American banking executives.
She was not the only one raising concern.
Maxine Waters, chairwoman of the US House Committee on Financial Services, said no matter the good faith efforts by Caribbean nations, they continue to face considerable challenges in accessing financial services.
Barbados and the Cayman Islands are on the FATF list of jurisdictions under enhanced monitoring because of perceived weaknesses in their AML regimes.
Wayne Panton, the Cayman Islands Premier, also present for the event, issued a statement saying Cayman must be involved in any discussions moving the matter forward.
Mr Burt’s communications office said a statement from the Premier was anticipated later.
The Barbados Prime Minister said Caribbean leaders had provided huge support for international efforts to stop crime, terrorism and their financing.
But they expected a risk-based approach, rather than placing prohibitive burdens on small nations.
She said the system was transparently flawed to the point of being counterproductive, and inadvertently supporting crime.
There were countries, she argued, on the AML lists issued by the Financial Action Task Force, the OECD or the European Union which typically had very little international financial activity at all.
Yet the rich, developed countries, where most international finance and money laundering takes place, “have never been listed and will never be listed”.
“We know that transactions are routed through Sydney, to London, Dublin, Toronto, to other countries in Europe, through New York and through some of the states regrettably in [the US] as well,” she said.
“We do not hear any of these centres being sanctioned, nor do they face the spectacle of enhanced due diligence.
“The sanctioned countries are Haiti, Nauru, South Sudan, Senegal, Uganda, Jamaica, Barbados, Bahamas. I can go on.”
Ms Mottley said weak beneficial ownership rules in the US and Britain are critical elements in money laundering.
“Yet, we are having to restructure our laws and processes to ensure that all beneficial ownership is disclosed to everyone.”
She said the small countries were asked to carry out the same level of regulation as large countries that have that capacity to distort global systems, leading to a flawed and discriminatory outcome.
And the effect of being listed, the Barbados prime minister said, is financial exclusion, as for banks the cost of enhanced due diligence is too high compared with the relative profitability of doing business with small developing nations.
She added that the reduced banking footprint and decline in correspondent banking in the region has a detrimental effect on trade, commerce and economic growth.
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