28/08/20

BARBADOS: Jurisdiction hires consultants to meet financial compliance standards.

As published on consultancy.lat, Tuesday 25 August, 2020.

The Barbados government has dug into its war chest to shell out nearly $1 million on consultancies, in a bid to get compliant with Financial Action Task Force (FATF) stipulations.

The parliament’s Standing Finance Committee approved a grant of $840,000 to be shelled out from the Consolidated Fund to pay the fee of unidentified consultants. Following years of poor ratings on FATF reports, the new Barbados administration that came into power in 2018 sought to put things right and get compliant as soon as possible.

The administration entered an agreement with the FATF that would see its compliance come up to standards over the next two years, although the latest push is directed at early completion of the process. Speaking on the agreement, Barbados Attorney General and Minister of Legal Affairs Dale Marshall highlighted some of the challenges that emerged in reaching an agreement.

“The FATF has given us two years to complete the process. The process has been consultative. We had a meeting with their side. Some of the practical difficulties have had to do with our court system,” said Marshall.

The practical difficulties reportedly pertain to a difference of opinion between Brabadoes officials and the FATF over a low rate of convictions in Barbados. According to Marshall, higher conviction rates are a key indicator that compliance measures are working, which did not sit right with the ministry.

“Our approach is very different. We feel if you are successful in fighting it the number of convictions that we could have would be few,” he said. Nevertheless, the government soon had to give up ground, with Marshall indicating that they will comply with FATF requirements.

Consultants have been brought on board to help the government meet these strict compliance standards. According to Marshall, there are a lot of changes to be made in the legislative framework in order to cover the current gaps in the money laundering and anti-terrorism legislation.

The Caribbean is reportedly the world’s second largest tax haven, which harbors nearly $100 billion each year. No doubt, the region draws attention from global regulatory bodies, although keeping tabs on these large sums is a significant challenge.