News Americas, NEW YORK, NY, Fri. Mar. 24, 2017: The US has named 21 Caribbean countries among a wider global list of Major Money Laundering Countries of 2016. The US State Department this week released the countries in its 2017 International Narcotics Control Strategy Report on Money Laundering and Financial Crimes. The countries making the list are:
- Antigua and Barbuda
The US report says that money laundering, narcotics trafficking, gaming, and firearms trafficking are major sources of illicit funds in Antigua and Barbuda. It added that funds are laundered through the purchase of real estate, vehicles, vessels, and jewelry as well as through a variety of businesses. The State Department also slammed the country’s Citizenship By Investment Program (CIP), calling it ”among the most lax in the world.”
Aruba, the US State Department says is a transshipment point for drugs from South America bound for the United States and Europe, and for currency flowing in the opposite direction. Bulk cash smuggling represents a risk due to the location of Aruba between North and South America. Money laundering, according to the report, is primarily related to proceeds from illegal narcotics trafficked by criminal organizations and occurs through real estate purchases and international tax shelters. There is no significant black market for smuggled goods on Aruba.
The US claims The Bahamas is a major sources of laundered proceeds are drug trafficking, firearms trafficking, gaming, and human smuggling. The report says “Money laundering trends include the purchase of real estate, large vehicles, boats, and jewelry, as well as the processing of money through a complex web of legitimate businesses and IBCs registered in the offshore financial sector.” Researchers added that drug traffickers and other criminal organizations take advantage of the large number of IBCs and offshore banks registered in the Bahamas to launder money, despite transaction reporting requirements.
Narcotics trafficking, money laundering, and firearms trafficking are major sources of illicit funds in Barbados, the US report states. “In addition to the use of financial institutions, money is laundered through the purchase of real estate, vehicles, vessels, and jewelry as well as through a variety of businesses, the report added.
Belize, was slammed by the US State Department as being “vulnerable to money laundering due to the lack of enforcement of its laws and regulations, strong bank secrecy protections, geographic location, and weak investigatory and prosecutorial capacity.” The report added that the sources of money laundering in Belize are drug trafficking, tax evasion, securities fraud, and conventional structuring schemes.
- British Virgin Islands
In the BVI, the US reports says potential misuse of BVI corporate vehicles remains a concern since criminal proceeds laundered in the BVI derive primarily from domestic criminal activity and narcotics trafficking.
7: Cayman Islands
According to the US, most money laundering in the Cayman Islands is related to foreign criminal activity and involves fraud, tax evasion, and drug trafficking. “Money laundering in the Cayman Islands is primarily related to foreign criminal activity and involves fraud, tax evasion, and drug trafficking, largely cocaine,” the State Department report stated.
While no exact sources of money laundering was found in Cuba, the US report claims that Cuba’s geographic location puts it between drug supplying and drug consuming countries and as such, the government of Cuba should increase the transparency of its financial sector and expand its capacity to fight illegal activities while increasing the transparency of criminal investigations and prosecutions.
The US claims money laundering in Curacao is primarily related to proceeds from illegal narcotics. The State Department report says money laundering organizations take advantage of the availability of U.S. dollars, offshore banking and incorporation systems, to launder through real estate purchases, international tax shelters, wire transfers, and cash transport among Curacao, the Netherlands, and other Dutch Caribbean islands.
In The Commonwealth of Dominica, the US says money laundering cases involve external proceeds from fraudulent investment schemes, advance fee fraud schemes, and the placement of Euros related to questionable activities conducted in other surrounding jurisdictions. The State Department report also said domestic money laundering is chiefly linked to narcotics activities while slamming the country’s Citizenship By Investment Program as “vulnerable,” making it susceptible to abuse by criminal actors.
11: Dominican Republic
In The Dominican Republic, (DR), the US report says corruption within the government and the private sector, the presence of international illicit trafficking cartels, a large informal economy, and weak financial controls make the country vulnerable to money laundering threats. The US says the major sources of laundered proceeds stem from illicit trafficking activities, tax evasion, and financial fraud, particularly transactions with forged credit cards.
In Grenada, the US government says money laundering is principally connected to smuggling and narcotics trafficking by local organized crime rings. Illegal proceeds are laundered through a variety of businesses, as well as through the purchase of real estate, boats, jewelry and cars.
The US says, the primary sources of laundered funds in Guyana is believed to be narcotics trafficking and corruption. However, the laundering of proceeds from other illicit activities, such as human trafficking, contraband, illegal natural resource extraction, and tax evasion, is substantial, the State Department report added. Common money laundering typologies include the use of fictitious agreements of sale for non-existing precious minerals to support large cash deposits at financial institutions; cross border transport of small volumes of precious metals, declared as scrap or broken jewelry to avoid scrutiny by the relevant officials and the payment of relevant taxes and duties; using gold; and the use of middle and senior aged cash couriers for the cross border transport of large sums of U.S. dollars, the report added.
In Haiti, the US says most of the identified money laundering schemes involve significant amounts of U.S. currency held in financial institutions outside of Haiti or non-financial entities in Haiti, such as restaurants and other small businesses. The report points out that a great majority of property confiscations to date have involved significant drug traffickers convicted in the United States. Illicit proceeds are also generated from corruption, embezzlement of government funds, smuggling, counterfeiting, kidnappings for ransom, illegal emigration and associated activities, and tax fraud, The State Department says.
In Jamaica, the US says money laundering is primarily related to proceeds from illegal narcotics, financial scams, and extortion and is largely controlled by organized criminal groups. The US State Department also said “there are dozens of violent Jamaican gangs on the island. Jamaica continues to experience a large number of financial crimes related to cybercrime and advance fee fraud (lottery scams), which primarily target U.S. citizens.”
16: Sint Maarten
The US says money laundering in Sint Maarten, centers around criminal profits that occur through business investments and international tax shelters. The State Department slammed the island’s government as “weak” adding that it continues to be vulnerable to integrity-related crimes.
17: St. Kitts and Nevis
The US State Department says St. Kitts and Nevis remains susceptible to corruption and money laundering because of the high volume of narcotics trafficking around the islands. “The growth of its offshore sector coupled with unusually strong bank secrecy laws also remains problematic,” the report added, while slamming the country’s Citizenship by Investment Program as “afflicted by significant deficiencies in vetting candidates and conducting due diligence on passport and citizenship recipients after they receive citizenship.”
18: St. Lucia
Money laundering in St. Lucia, according to the US government, is linked primarily to drug trafficking. “Illicit drug trafficking by organized crime rings and the laundering of drug proceeds by domestic and foreign criminal elements remain serious problems for St. Lucia. It is believed financial institutions unwittingly engage in currency transactions involving international narcotics trafficking proceeds,” the State Department report said.
19: St. Vincent and the Grenadines
The US says St. Vincent and the Grenadines remains vulnerable to money laundering and other financial crimes as a result of drug trafficking and its offshore financial sector. “The set of islands remains a small but active offshore financial center with a relatively large number of IBCs. United States currency is often smuggled into the country via couriers, go-fast vessels, and yachts,” the State Department report said, while added that money laundering on the island is principally affiliated with the production and trafficking of marijuana in SVG, as well as the trafficking of other narcotics from within the Caribbean region.
Money laundering in Suriname, according to the US report, is closely linked to transnational criminal activity related to the transshipment of cocaine, primarily to Europe and Africa. Most of the laundered proceeds, according to the report, are primarily invested locally in casinos, real estate, foreign exchange companies, car dealerships, and the construction sector. The report also slammed public corruption in the country, which it says contribute to money laundering.
21: Trinidad and Tobago
In Trinidad & Tobago, the US government says proceeds from drug trafficking, illegal arms sales, fraud, tax evasion, and public corruption are the most common sources of laundered funds and are derived from both domestic and international criminal activity. “Narcotics trafficking organizations and organized crime entities, operating locally and internationally, control the majority of illicit proceeds moving through the country,” the State Department report says, while adding that money laundering also occurs outside the traditional financial system.