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St Vincent denounces label as ‘prime money laundering destination’

Published:Wednesday | November 1, 2017 | 12:00 AM
Former campaign chairman for the Donald Trump presidential campaign, Paul Manafort.

St Vincent & the Grenadines has dismissed international media reports describing it as a "prime money-laundering destination" that is "notorious for money laundering".

The characterisations followed the indictment in the United States of Paul Manafort, the former chairman of the Donald Trump's presidential campaign, and his long-time associate, Rick Gates, on money-laundering and tax-evasion charges.

In a joint statement, St Vincent's National Anti-Money Laundering Committee, the Financial Services Authority, and the Financial Intelligence Unit denounced the reports, saying they consider such descriptions linking the country with money laundering to be uninformed, outdated, erroneous, and inaccurate.

"The authorities further underscore that there is no basis for such descriptions, particularly as the country is not on any international sanction list as a money laundering haven, nor on any other international sanction list," the agencies said.

The indictment refers to two companies, Global Endeavour Inc, whose date of incorporation is listed as unknown, and Jeunet Limited, said to have been be incorporated in August 2011 in the Grenadines.

According to the indictment, between at least 2006 and 2015, Manafort and Gates generated tens of millions of dollars in income as a result of work in Ukraine, and in order to hide the payments from US authorities, the defendants laundered the money through scores of United States and foreign corporations, partnerships, and bank accounts.

In furtherance of the scheme, the men were alleged to have funnelled millions of dollars in payments into foreign nominee companies and bank accounts in various foreign countries, including Cyprus, St Vincent & the Grenadines, and the Seychelles, the indictment said.

But St Vincent said in its statement that at all material times, appropriate customer due diligence, and customer verification procedures were undertaken in relation to the company formed in its jurisdiction.

"The authorities note that even the most effective systems around the world sometimes may not prevent a criminal intention to commit fraudulent or money laundering activities, especially where legitimate names and business are utilised to incorporate a company or establish a business relation," the agencies said.

"The authorities recognise that this is so notwithstanding that satisfactory customer due diligence and customer-verification procedures are obtained," they added, while noting that St Vincent is an active member of the Caribbean Financial Action Task Force, the Caribbean arm of the international anti-money-laundering standard-setter, and the OECD Global Forum, the international tax-transparency standard-setter, and is compliant with FATCA, the US initiative to ensure tax reporting by its US citizens holding assets outside of the US.

The agencies noted that following St Vincent's blacklisting in 2000, the country has substantially reformed its offshore sector, while suggesting that the current reports appear to have discounted that history.

"The global stigma attached to offshore industries should not be broad-brushed to this country, as St Vincent & and the Grenadines has substantively reformed its offshore industry since the early 2000s and currently operates a very small, well- regulated industry, governed by effective sector-specific and general regulatory laws specifically covering anti-money laundering compliance," the joint statement added.