CARICOM knocks EU on blacklist moving targets

The CARICOM Secretariat has conceded that there is little advocacy it can muscle to push member states off a European Union (EU) anti-money laundering blacklist but rapped developed countries for constantly shifting international benchmarks.

CARICOM Secretary General Dr Carla Barnett argued on Tuesday that there must be a unified regulatory process for the international financial system which would assist in eliminating many of the challenges being faced by some states in the 15-member bloc.

“That does not exist. So as a result of that, the impact on our individual territories is that much greater because we then have to be treating with meeting the requirements of four or five different sets of countries,” Barnett told journalists during a virtual end-of-year press conference.

“When you see a blacklist that’s published, sometimes those lists contradict listings that have been issued by other groups.”

Several CARICOM countries, including Jamaica, The Bahamas, and Barbados, were in 2020 blacklisted by the European Union (EU), which accused them of being too soft on money laundering.

In a Gleaner interview in May 2020, Finance Minister Dr Nigel Clarke had explained that in the case of Jamaica, the Financial Action Task Force (FATF) of the EU had turned its focus on countries where the economy’s size is above a certain threshold – having US$5 billion of financial assets using a monetary measure known as M2.

He said then that FATF had arbitrarily changed this measure to what is known as M3, which is a broader measure of the economy.

Clarke said the change meant that for the first time, Jamaica had exceeded the US$5-billion threshold, causing it to be included in the list of countries that FATF would focus on and monitor.

Jamaica is seeking to plug loopholes that are among the 13 areas in which the country is now considered non-compliant with the AML/CFT anti-corruption regime. The island desires to become fully compliant with the AML/CFT arrangements and being removed from the FATF greylist as well as the blacklists of the EU and United Kingdom.

The impact on economies of countries listed has been great, the secretary general said, with many of the local financial institutions finding it difficult to maintain correspondent banking relations that would allow the payment of ordinary transactions.

Payments for exports to the United States and the EU, for example, are oftentimes impacted when member states are listed, as corresponding banking relations are compromised.

Barnett said that a perception of increased risk of doing business in the region caused by the blacklisting often results in the absence of that correspondence.

The secretary general noted that it was difficult for countries to keep up with the changes.

“We change our laws to meet the requirements of the EU. We’ve changed our laws to meet the requirements of the US. We’ve changed our laws to meet the requirements of everybody, but those requirements change as well.

“So, it’s not only the lack of unity on their side, it is also the fact that these requirements are constantly changing. For many of us, we’ve reached a point where we come off a blacklist, we do nothing else and then another year we’re back on the blacklist,” said Barnett.

She said, as a result, CARICOM is not in a position to influence or change the approach to global financial sector supervision.

That reality, she said, was not expected to change any time soon.

“We have never stopped working together as a group on it. We continue to work with the Europeans, the Americans, the OECD (Organization for Economic Cooperation and Development), whichever group, but we advocate. We don’t make the rules,” she said, adding that it is a “huge” issue that will continue to be on the agenda.

kimone.francis@gleanerjm.com