Abstract

Money Laundering is how criminals disguise the source of illegal funds into origination from a legitimate source. To combat money laundering, the Financial Action Task force ‘FATF’, a policy-making body was initiated to provide counter-measures against money laundering. In 1992, Jamaica endorsed its commitment to implement the recommendations of the FATF to combat its increasing record of money laundering.

This article provides an overview of Jamaica’s journey to Anti-money Laundering and the measures taken to end illicit financial flows.

Introduction

Like other Caribbean nations, Jamaica suffers from drug trafficking, Money Laundering ‘ML’ and Illicit Finance. Following international persuasions, Jamaica is increasing its controls to combat ML, boosting its domestic law enforcement and recovery procedure, thereby walking away from illicit financial flows.

Jamaica’s Journey to AML

Money illegally earned, transferred or used is the most common definition of illicit finance ‘IlF’. Its source is usually disguised because it is derived from criminal activities. This disguise is known as ML.  In 1989, a group of countries and organizations formed the Financial Action Task Force ’FATF’, an inter-governmental body which sets standards, develops and promotes policies to combat ML via its :1990- 40 Recommendations providing counter-measures against ML, 2001- 8 special Recommendations combatting terrorism financing, 2005- ninth special Recommendation addressing cross border movement of funds, now known as the FATF 40 AML Recommendations +9 Combat the Financing of Terrorism ‘CFT’ Recommendations.

The FATF provides the Universal framework for AML efforts, allowing for flexibility in implementation by individual countries. The Caribbean-FATF ‘CFATF’, of which Jamaica is a founding member has fully adopted the FATF 40+9 Recommendations and developed its own regulations which resembles the FATF’s.

According to the FATF list, Jamaica has been identified as having strategic AML deficiencies. In 2019, she recorded a large number of financial crimes related to advance fee fraud, corruption, counterfeit goods, illegal arms and cybercrimes. However, In February 2020, Jamaica made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime.

The Jamaican Bank also developed and issued its own ‘Guidance Notes’, assisting its financial institutions ‘FIs’ fight against ML. The most basic procedure- Know your customers ‘KYC’, mandates them to develop complete profiles of customers: Full name (pet names, aliases), address, contact-details, financial history, employment status, business location, business type, employer’s detail, irregular transactions. Financial sanctions are imposed on non-compliant FIs.

The KYC is applicable to regular, one-off and repeat customers, persons directly or indirectly carrying out transactions with FIs in Jamaica. This ensures the FIs system is not used to launder money or assist terrorist groups to further such purposes.

Recommendations

Jamaica, though compliant with AML standards, needs to develop a communication strategy that effectively conveys that the government and private sectors embrace the ML issue and are committed to the implementation of AML efforts.