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Senate approves anti-money laundering order

Provision is expected to assist with removing Jamaica from EU’shigh-risk’ list

Published:Wednesday | January 26, 2022 | 12:09 AM

The Senate recently approved the Proceeds of Crime (Designated Non-Financial Institution) (Trust and Corporate Services Providers) Order, 2022.

The order provides for the designation of trust and corporate services providers as designated non-financial institutions.

Minister without portfolio in the Ministry of Economic Growth and Job Creation, Senator Matthew Samuda, who brought the order before the Senate, said the designation reiterates Jamaica’s stance in the fight against money laundering and also signals Jamaica’s compliance with set international obligations and practices.

He noted that in February 2020, Jamaica was placed on a ‘grey list’ by the Financial Action Task Force (FATF) for weaknesses in its anti-money laundering/combating the financing of terrorism (AML/CFT) regime.

Samuda explained that once the FATF ‘grey lists’ a country, the European Union (EU) parliamentary law requires that the European Commission put that country on a list referred to as the ‘Blacklist’, deeming it a high-risk third country.

“In light of our inclusion on the grey list and its implications, crucial steps are being taken to strengthen the effectiveness of Jamaica’s AML/CFT framework and address identified technical compliance deficiencies with the Financial Action Task Force recommendations,” he said.

The senator pointed out that the Proceeds of Crime Act, 2007 is a critical legislative tool in Jamaica’s fight against AML/CFT regime.

He added that the act provides for money-laundering offences, outlines and imposes obligations on businesses in regulated sectors to take active steps to prevent and detect money laundering.

“It should be noted that the designation of the trust and corporate services providers as designated non-financial institutions under the act will allow any person or entity providing (a) a trust service, or (b) a corporate service to fall within the regulated sector.

“This will also support the International Corporate and Trust Services Providers Act passed in December 2021 that came into effect on December 24, 2021,” he said.

Additionally, Samuda said trust and corporate services providers are categorised under Recommendation 24 of the FATF Methodology as designated non-financial businesses and professions.

He noted that Recommendation 24 makes it a requirement for countries to ensure that this class of businesses are subject to effective systems of monitoring and are compliant with anti-money laundering and countering financing of terrorism measures.

It was highlighted within the ‘Jamaica: 3rd Follow-Up Report and Technical Compliance Re-Rating’ in 2021 that the country is only partially compliant with Recommendation 24, due to deficiencies in the monitoring of trust and corporate services providers.

“The designation of trust and corporate services providers will ensure Jamaica’s compliance with Recommendation 24. The result of this designation will also enable the Financial Services Commission to be given the requisite authority to ensure that trust and corporate services providers operate in compliance with the Proceeds of Crime Act and its regulations,” he said.

In supporting the order, Opposition Senator Donna Scott-Mottley said it is necessary and strengthens the country’s anti-money laundering regime.

“There can be no disagreement about the importance of Jamaica abiding by and recognising its international obligations. Although this was put in the context of moving Jamaica out of the ‘grey list’, we here recognise that it is important for our own international regulations and the proper functioning of our country,” she said.