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UPDATE: Jamaica eyes greylist deliverance

Suspicious transactions related to money laundering are on the increase in Jamaica, but so also are convictions, says the Financial Investigations Division.

Jamaica has successfully navigated the requirements of the Financial Action Task Force, FATF, the global watchdog over the illicit movement of money, the agency said.

“Within two weeks [of an upcoming FATF Plenary] we will know our official status. There were 13 items for which Jamaica was greylisted and we have cleared 12 with one remaining. I believe we will be cleared after the meeting,” said Keith Darien, principal director of the Financial Investigations Division, in an interview last Friday.

Bank of Jamaica officials are expected to lead a delegation to the FATF working group meeting from October 23 to 27 in Paris, France, which will assess Jamaica’s progress.

Given the progress made by Jamaica in addressing previous issues raised by FATF, it’s likely that Jamaica could see a change in its status within two weeks of the meeting in Paris, Darien said.

“An interim assessment was made of risk-based supervision and the recommendation was that we have largely addressed this. The only outstanding item was the beneficial ownership regime which will be reviewed during the October meeting.”

Jamaica also received a green light on financial investigations, he added. FATF wanted Jamaica to implement proper measures regarding AML or anti-money laundering investigations that utilise financial intelligence.

“This action item is largely addressed. There has been an increase in the number of ML [money laundering] investigations that are using domestic and foreign financial intelligence information that result in ML charges.”

Another major item, which has been addressed, was the risk-based supervision of attorneys, trust companies and microcredit companies.

“We must undertake supervision based on those deemed to be high risk. FATF must be satisfied that framework is in place and working,” he said.

Laws were also amended, and a new supervisory framework put in place for TCSPs or trust, merchant bank and corporate services providers.

And motor vehicle importers and real estate developers and contractors are also being assessed for addition to the supervisory framework.

Additionally, a big ticket item – amending the Companies Act to include the identification of beneficial ownership, that is the true owner or controlling entity of registered companies – has also been addressed.

Darien, meanwhile, identified over 1,700 reporting entities in Jamaica that have been sending to the FID information on which its financial intelligence findings are based. But among the many, most of the information regarding suspicious transactions flows from just three companies.

A suspicious transaction report is filed where companies believe that a transaction is related to money laundering based on what they know of the customer.

“If it is complex, unusual, or out of the norm they will file a report to the FID. It does not matter whether the method is cash, cheque or wire transfer,” Darien explained.

Financial entities are also required by law to report large cash transactions, which is mandatory under POCA or the Proceeds of Crime Act. Once a customer does a transaction of US$15,000 or more the institution is required to report it. For cambios that threshold is US$8,000 or more, and US$5,000 remittance companies.

Flagged transactions fell at the start of the pandemic and began rising again the following year.

In 2019 there were 75,000 reports, which fell to but in 2020 this was reduced to 66,000 “because the country was locked down. This was in keeping with the international trend,” said Darien.

Since then, however, the number of reports climbed back to 72,000 and to 86,000 last year, rising above prepandemic levels.

“This was also in keeping with international trends where a substantial increase was seen in pre-COVID levels. This was a 15 per cent increase in both types of reporting,” said the FID director.

So far in 2023, FID has received 64,122 reports covering the period January to August.

“Considering that most reports are filed in the months of September and December each year, relating to back to school and Christmas, I am projecting well over 96,000 reports for 2023,” he said.

The reports have been useful in detecting fraud, lottery scamming, illegal moneylending, tax evasion, and even corruption, Darien added, leading to an increase in the number of cases taken before the court.

It takes about three years to try a case, he said.

“We have seen suspicious transactions filed regarding cryptocurrency and we are in the process of recovering significant assets linked to one of these cases,” said the FID director. “I want to thank the reporting entities for their vigilance in keeping with the law. It provides valuable information and helps in stalling illicit flows,” he said.


UPDATE: This article has been updated to remove information regarding the EU tax greylist. Jamaica was removed from the EU list in February.

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