Illicit financing remains a significant threat to the socio-economic stability and security of the Caribbean region. Activities such as money laundering, terrorist financing, tax evasion, and the financing of organized crime undermine governance, distort economies, and hinder sustainable development. Illicit financing is the lifeline of criminal enterprise as its tentacles can be traced to most criminal activity affecting the Caribbean landscape. Considering the complex interconnectedness of organised crime across jurisdictions, severing this lifeline requires a strategic reset, focusing on regional cooperation, capacity building, and the strengthening of legal and regulatory frameworks.
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Background and Rationale
The Caribbean, with its economies and financial systems, is susceptible to illicit financial flows due to factors such as porous borders and archipelagic geography, heavy investments in its offshore banking sectors, disparities in governance/regulation of anti-money laundering, counter financing of terrorism and proliferation financing, established corridors for illicit trafficking in the vast maritime space, and the slow pace at which adjustments to legal and operational provisions are made in response to trends in AML/CFT/CPF.
The region is not immune to financial and trade-based money laundering, narcotics trafficking, irregular migration and weapons trafficking- all vehicles which facilitate, or end-products of, illicit financial flows to and through the region. The challenge with Tackling illicit financing flows is exacerbated by rapid evolution of international compliance frameworks aimed to protect the financial integrity of states operating within the global financial system. Economic instability, weak compliance systems for AML/CFT/CPF and ambivalence towards deep international and regional judicial cooperation amplify the deleterious effect on the safety of our domestic space.
Transnational criminal networks often exploit these weaknesses, facilitating the movement of funds derived from illegal activities. Addressing illicit financing is essential for safeguarding theintegrity of Caribbean financial systems, attracting legitimate investment, and promoting the sustainable development of the region.
The region is not immune to financial and trade-based money laundering, narcotics trafficking, irregular migration and weapons trafficking- all vehicles which facilitate, or end-products of, illicit financial flows to and through the region. The challenge with Tackling illicit financing flows is exacerbated by rapid evolution of international compliance frameworks aimed to protect the financial integrity of states operating within the global financial system. Economic instability, weak compliance systems for AML/CFT/CPF and ambivalence towards deep international and regional judicial cooperation amplify the deleterious effect on the safety of our domestic space.
Transnational criminal networks often exploit these weaknesses, facilitating the movement of funds derived from illegal activities. Addressing illicit financing is essential for safeguarding theintegrity of Caribbean financial systems, attracting legitimate investment, and promoting the sustainable development of the region.
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Objectives
- Strengthen regional cooperation and information sharing among Caribbean countries to combat illicit financing.
- Enhance capacity of financial institutions, law enforcement, and regulatory bodies to detect, prevent, and prosecute illicit financial activities.
- Improve compliance systems for AML/CFT/PF commensurate with the national security interest of Caribbean states
- Harmonize framework for AML/CFT/CPF to avoid regulatory arbitrage and loopholes.
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Proposed Strategic Pillars
- Regional Coordination and Information Sharing
- Standard mechanism to facilitate cross-border collaboration, intelligence sharing, and joint investigations.
- Develop regional databases and platforms for real-time exchange of suspicious transaction reports and typologies.
- Professionalisation of Criminal Justice Practitioners
- Organise training programmes, workshops, and technical assistance for financial institutions, law enforcement, and regulatory agencies. Focus on forensic accounting, digital forensics, and anti-money laundering (AML) procedures.
- Accreditation of financial investigators and regulators
- Legal and Regulatory Strengthening
- Support Caribbean jurisdictions in updating and harmonising laws and regulations to address emerging threats such as cryptocurrency-related laundering, trade-based money laundering, and terrorist financing. Encourage adoption of international best practices and periodic peer reviews.
- Public Awareness and Engagement
- Launch region-wide campaigns to educate the public and private sector stakeholders about the risks and consequences of illicit financing. Promote reporting mechanisms and encourage compliance with AML/CFT obligations.
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Expected Outcomes
- Improved detection and disruption of illicit financial flows within and across Caribbean jurisdictions.
- Enhanced institutional capacity and professional expertise in AML/CFT practices.
- Greater alignment of Cariof the Caribbeanbbean legal frameworks with international standards, reducing the risk of blacklisting.
- Increased public and private sector vigilance, resulting in fewer opportunities for illicit financing.