United States Says Trinidad and Tobago Vulnerable to Money Laundering

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Because of Geographic Location, Stable Economy and Developed Financial Systems

WASHINGTON – The United States says Trinidad and Tobago’s geographic location, generally stable economy, and developed financial systems make it vulnerable to money laundering.

Washington said that the oil-rich twin-island republic last year, had done much to improve its anti-money laundering (AML) region, one year after developing an action plan to address deficiencies noted by by international experts.

“Despite substantial and continuing efforts to reform the criminal justice system, a lengthy judicial process can still mean years before criminal prosecutions are resolved. While the number of persons charged with money laundering-related offenses continues to increase, there has not yet been a stand-alone conviction for money laundering,” the US State Department said in its 2019 International Narcotics Control Strategy Report released here.
It said that continued legislative and institutional reforms, including adequate resources and implementation, are needed to ensure the proper enforcement of Trinidad and Tobago’s AML regime.

The State Department said that the country’s close proximity to Venezuela and other drug-producing countries, its position as a regional hub for commercial air and shipping, and its relative wealth increase the risk of drug related money laundering in Trinidad and Tobago.
“Along with proceeds from drug trafficking, fraud, forgery, and public corruption are among the most common sources of laundered funds. There are also indications that structuring, commingling of funds, and trade–based money laundering (TBML) are all used to introduce illicit funds into the formal economy.”

Washington said that although public casinos and online gaming are illegal, “private members’ clubs,” which operate as casinos and move large amounts of cash, also exist throughout the country and that oversight of these casinos and other forms of gaming is patchwork and in need of comprehensive reform. It said that reports suggest certain local religious organizations are involved in money laundering, and comprehensive AML oversight of non-profit organisations (NPOs) is still developing.

Member-based financial cooperatives, or credit unions, also present a risk for money laundering,” the Report noted, adding that there are 16 free trade zones (FTZs) in Trinidad and Tobago, which aim to attract both foreign and local investors to set up manufacturing, international trading, and services operations.

“A free zone enterprise must be a company incorporated or registered in Trinidad and Tobago; all foreign companies are required to register a business entity locally. Trinidad and Tobago does not have an offshore banking sector, nor an economic citizenship programme,’ the State Department noted.

It said that the country has comprehensive know your customer (KYC) and suspicious transaction reports (STR) regulations, and requires enhanced due diligence for politically exposed persons (PEPs).

Trinidad and Tobago’s Parliament passed legislation in 2018 that improves the ability of its Financial Intelligence Unit (FIU) and other agencies to cooperate with international partners on tax matters. The bill also broadens the authority of the FIU and facilitates the prosecution of stand-alone money laundering cases.

Parliament also approved amendments to Trinidad and Tobago’s Anti-Terrorism Act, which created several new criminal offenses, including some related to the financing of terrorism and the country also formalized the creation in law of a National Anti-Money Laundering and Counter-Financing of Terrorism Committee to make recommendations and coordinate implementation of AML/CFT policies.

The Report notes that a number of pieces of legislation have been passed by the current government to reform the criminal justice system, and further legislation and institutional reforms are at various stages of development.

“If implemented properly, these efforts should permit more timely money laundering prosecutions in the future,” the State Department said, noting that fraud and corruption in government procurement rarely result in convictions.

“The failure to prosecute financial crimes successfully or in a timely manner has a corrosive impact on the integrity of public finances and may encourage others to engage in financial crimes. While Trinidad and Tobago’s Parliament approved amendments to the country’s public procurement laws in 2017, those changes are not yet fully implemented.

“Trinidad and Tobago is also continuing its efforts to address deficiencies related to the beneficial ownership of corporate and other legal entities and to monitor NPOs properly. Legislation to more comprehensively regulate gaming has also been pending since 2016, though the current government has stated its intention to pass the law and implement it in 2019,” the Report added.

The State Department said that to ensure that Trinidad and Tobago’s positive reform efforts are fully implemented and adequately staffed and resourced, it is “critical to Trinidad and Tobago’s ability to consistently comply with international standards regarding its AML legal and regulatory frameworks, as well as its efforts to investigate and prosecute money laundering cases adequately and in a timely manner”. – CMC

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