Thu | Nov 26, 2020

Will Jamaica still be blacklisted? - Opposition senator questions scale of COVID-19 effect on economy

Published:Monday | May 25, 2020 | 12:16 AMRomario Scott/Gleaner Writer

Opposition Senator Lambert Brown is questioning whether Jamaica would be removed from the European Union financial blacklist, given the expected more than five per cent contraction in the economy because of the COVID-19 pandemic.

Jamaica was among 12 countries added to the latest list labelled as high risk and having strategic deficiencies in their regime regarding anti-money laundering (AML) and counterterrorism financing (CTF).

Finance Minister Dr Nigel Clarke had said that Jamaica, like other countries, had been impacted by a shift in Financial Action Task Force (FATF) standards of measurement.

“If a country has strategic AML/CTF deficiencies and its financial assets are deemed to be larger than the threshold of US$5 billion, the country’s financial sector is seen as large enough, in an international context, to warrant the direct, enhanced monitoring of the international body FATF – a process commonly known as greylisting.

“FATF suddenly changed the variable used to measure the size of financial assets from M2 to M3, a broader measure, without a corresponding increase in the threshold value. This happened a mere six months before the assessment date,” the finance minister said.

But Brown, during a debate on the Terrorism Prevention (Designated Reporting Entity) (Financial Holding Companies) Order, 2020, in the Upper House on Friday, questioned whether the country’s status was likely to improve, given COVID-19’s hit to the economy.

“The minister of finance of Jamaica, in respect to the greylisting of our country because of our non-fulfilment of the Financial Action Task Force obligation, has said that this is because of our change in our economic status.

“Given what the minister has said, given the impact of COVID on the country and the calamity that faces our economic reality, we need to find out whether or not the prediction by the governor of the Bank of Jamaica – where it has moved from a three per cent decline in the economy to a four to seven per cent decline – whether that will change the status of Jamaica under the FATF situation,” the opposition senator said.

“And would that mean Jamaica would be no longer greylisted or blacklisted?”

The finance minister, however, made it clear that Jamaica will never be removed from the list of non-financial businesses and professions that do not provide data on its dealings.


Clarke explained some of the challenges facing Jamaica, pointing specifically to the non-financial businesses.

“There has been very limited activity in the area of AML/CTF supervision in these professions and businesses,” Clarke said.

“The non-financial businesses and professions, which represent an outer fence, are riddled with strategic weaknesses. It’s far too easy for those with ill-gotten gains to transact in real estate, acquire cars and jewellery, participate in gaming, and channel funds through unregulated money-lending institutions without any alarms being triggered.”

Jamaica completed its National Risk Assessment (NRA) in 2016. However, in reviewing Jamaica’s progress in October 2019, FATF indicated that the NRA did not include sufficient data from the non-profit sector and from non-financial businesses and professions.

“We, therefore, have to do it again. More importantly, we must keep the National Risk Assessment up to date so that we can know if and when the AML/CTF risks in the country are changing so that we can have a strategic response,” said Clarke.