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21 November 2000
MONEY LAUNDERING : UK MODIFIES FINANCIAL ADVISORY ON ANTIGUA AND BARBUDA
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The Treasury has issued a modified notice to financial institutions, updating its advice of April 1999, which drew attention to deficiencies in the anti-money laundering system in the Caribbean state of Antigua and Barbuda.
Commenting on the notice, Economic Secretary Melanie Johnson said:
?In early October, a joint UK/US team visited Antigua and Barbuda to evaluate the impact of recent improvements in the anti-money laundering laws and systems there.
?The UK recognises the efforts that the Government of Antigua and Barbuda has made since April 1999 to strengthen the system of supervision and control, with a particular view to strengthening anti-money laundering systems.
?Although it is too early to judge whether these new systems have been fully successful, it is clear that there has been a step-change in the culture of combating money laundering in the Government and supervisory structures. This is welcome. But it has been recognised by the Government of Antigua and Barbuda that there is still room for further improvement before the jurisdiction meets the highest standards of international anti-money laundering laws and practice.
Miss Johnson also noted that the off-shore gaming industry in Antigua was still perceived to pose a high risk to integrity of the global financial system:
?One area of particular concern that did emerge from the visit was in the off-shore gaming sector. Although there are controls on those who wish to run these businesses, in discussions it became clear that in some cases it would be possible to use the gaming industry for the purposes of laundering through players? accounts held with the gaming company.
?As a result, we have advised that UK financial institutions should be aware of concerns that there are serious risks associated with involvement in transactions linked to the off-shore gaming industry.?
Foreign Office Minister Baroness Patricia Scotland said:
"We have worked closely with the Antiguan government to help them make the changes necessary to meet international standards of financial regulation and anti-money laundering practice, and we have been impressed by their commitment to this exercise. I am pleased to note that this work is clearly paying dividends.
?We will continue to provide technical assistance to Antigua and Barbuda and other jurisdictions across the world to help them meet these standards. By doing so, we will improve the world's ability to address the insidious influence of global organised crime."
The Treasury advisory commends the progress made by the Government of Antigua and Barbuda, but notes that many of the recent changes will take time to bed down. The UK therefore continues to advise financial institutions (including professionals - such as lawyers and accountants - engaged in financial business) to consider whether additional due diligence steps are needed when engaging in transactions involving Antiguan offshore financial institutions, and other institutions for which the Antiguan authorities have sole supervisory responsibility.
Where financial institutions regard transactions as suspicious, they should report the transaction to the National Criminal Intelligence Service. It is not necessary to issue a suspicious transaction report in respect of all transactions involving Antigua, and financial institutions are not asked to avoid business with citizens of Antigua. But they should pay particular attention to large or unusual transactions for which there is no clear economic purpose. Particular attention should be paid to transactions linked to, or sourced from, the offshore gaming sector.
The UK government will continue to support actions by the Antiguan government to address particular concerns in the offshore sector. The UK also provides financial support for the Caribbean Financial Action Task Force, of which Antigua is a member and the UK a sponsoring nation. The CFATF will continue to have the lead role in monitoring Antigua's compliance with international standards through its mutual evaluation process.
NOTES FOR EDITORS
1. The UK issued its original advisory to UK financial institutions in April 1999, following legislative changes to the anti-money laundering laws in Antigua and Barbuda that weakened the capacity of that jurisdiction to deal effectively with money laundering, and put the offshore sector there at risk from criminals.
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2. Since then the Government of Antigua and Barbuda has undone many of the more detrimental legislative changes. Further improvements are planned. The Government has also taken steps to ensure the independence of the offshore financial services sector regulatory authorities, and has strengthened the capacity of the financial intelligence unit to handle suspected money laundering cases.
3. These improvements were sufficient to ensure that Antigua and Barbuda was not listed by the FATF as a non-cooperative jurisdiction in the fight against money laundering. Details of this exercise are available at the FATF website.
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4. As part of their obligations under the UK's anti-money laundering laws, where financial institutions know or suspect that transactions result from criminal activity, they are required to file a suspicious transaction report with the National Criminal Intelligence Service (NCIS).
5. The Caribbean Financial Action Task Force is a body that sets anti-money laundering standards for the Caribbean region. It also conducts mutual evaluations of its members, and provides technical support.
6. Guidance on Money Laundering practice for financial institutions can be found at BBA website.
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7. Media enquiries should be addressed to Charles Keseru at the Treasury press office on 020 7270 5188 or Rosemary Waugh at the Foreign Office press office on 020 7270 3595.