Strengthening financial integrity and combating economic crimes in the post-pandemic Caribbean: what lies ahead!

Published date09 August 2021
Date09 August 2021
Subject MatterAccounting & finance,Financial risk/company failure,Financial crime
AuthorRohan Duane Clarke
Strengthening f‌inancial integrity
and combating economic crimes in
the post-pandemic Caribbean:
what lies ahead!
Rohan Duane Clarke
Centre of Development Studies, University of Cambridge, Cambridge, UK
Purpose This paper aimsto map key strategic concerns that CommonwealthCaribbean States will face in
combatingeconomic crimes and strengthening f‌inancial integrityin the post-pandemic era.
Design/methodology/approach Horizon scanning was used to conduct a qualitative policy
analysis of key regulatory developments in international anti-money laundering and combating the
f‌inancing of terrorism (AML/CFTP) and tax governance, from the perspective of Commonwealth
Caribbean countries.
Findings This paper f‌inds that the COVID-19pandemic might widen several fault lines, along the Global
North/Southaxis, in international AML/CFTP and tax regulatory governance.These include the sustainable
developmentgap in AML/CFTP norm-making; making the Financial Action Task Force f‌it-for-purpose;
renewed campaignsagainst harmful tax competition; and international commitmentto scaling up technical
assistanceto combat economic crimes in developing countries. It questionsthe sustainability of the prevailing
levelling the playing f‌ieldregulatory approach to AML/CFTP and tax matters and whether serious
consideration ought not to be given to mainstreaming differential treatmentin international AML/CFTP
and tax standards,for resource-strapped Caribbeancountries.
Originality/value To the best of the authors knowledge, this paper is the f‌irst attempt to assess the
strategic policy risksand challenges that will arise from balancing economicrecovery and f‌ighting economic
crimes bysmall and vulnerable Commonwealth CaribbeanStates in the post-pandemic era.
Keywords Tax havens, Money laundering, COVID-19 pandemic, Commonwealth Caribbean
Paper type Research paper
The COVID-19 pandemic has created a new threat environment for Commonwealth
Caribbean States. Emerging threats relate not only to the expected impact of economic
dislocation on their capacity to combat money laundering and f‌inancing of terrorism and
mitigate other economic crimerisks. Rather, transnational regulatory responses to stimulate
economic recovery from the pandemic by powerful Group of Seven (G7) and the
Organisation for Economic Cooperation and Development (OECD) States might become a
source of threats. This will be especially so for the regions offshoref‌inancial centres (OFCs)
and tax shelters. Curbing capital f‌light will likely be elevated on the political agenda of
powerful onshore welfarestates as they seek to scale up tax revenues. This has broughtthe
sustainable development dimension of international anti-money laundering and combating
the f‌inancing of terrorism(AML/CFTP) as well as tax governance into sharp focus.
The sustainable development exigencies that prompted the development of Caribbean
offshore f‌inancial services sectors (Ogle, 2017) that, in turn, catapulted the region to the
centre stage of internationalAML/CFTP regulatory governance, have not waned. In fact, the
Journalof Financial Crime
Vol.29 No. 1, 2022
pp. 20-33
© Emerald Publishing Limited
DOI 10.1108/JFC-06-2021-0142
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