The Caribbean Financial Action Task Force: its mission, operations and future prospects
| DOI | https://doi.org/10.1108/13590790710758468 |
| Date | 24 July 2007 |
| Published date | 24 July 2007 |
| Pages | 227-249 |
| Author | Calvin E.J. Wilson,Kurt B. Rattray |
| Subject Matter | Accounting & finance |
The Caribbean Financial Action
Task Force: its mission,
operations and future prospects
Calvin E.J. Wilson
Caribbean Financial Action Task Force, Trinidad and Tobago, and
Kurt B. Rattray
Legal Reform Department, Ministry of Justice, Jamaica
Abstract
Purpose – To outline the role of the Caribbean Financial Action Task Force (CFATF), which has the
remit to spearhead the implementation of internationally recognized anti-money laundering and
combating the financing of terrorism (AML/CFT) benchmarks in the Caribbean Basin region.
Design/methodology/approach – The first part of the paper sets out the mandate and structure of
the CFATF, and describes the range of activities in which it has been engaged, together with some
triumphs and challenges experienced over its history. The second part focuses on a critical component
of the CFATF’s remit, namely, the conduct of the mutual evaluation (MVE) programme, a peer review
process by which member states within the CFATF family are assessed for compliance with
AML/CFT requirements. The third part constitutes the conclusion and offers some observations on the
way forward for the CFATF in its ongoing campaign against financial crime.
Findings – The Caribbean Basin region is ad idem with its international partners in the fight against
money laundering and the financing of terrorism. Member governments of the CFATF have embraced
this commitment because it is in the region’s best interests to protect first and foremost the regional
financial system from criminal activity and by extension the global financial system. In so doing we
are able to position ourselves as well regulated, clean jurisdictions which are firmly committed to
adherence to international best practices. The ongoing stance of the CFATF is one of constant
vigilance with regard to international developments, their potential impact on members and the
Caribbean Basin region and the way in which the region’s interests could be best protected.
Originality/value – The task of the CFATF is to ensure that throughout the membership all the
domestic stakeholders be it the National Anti Money Laundering Committee, the attorney general’s
department, the central bank, police, customs, immigration, defence departments, the financial
intelligence units (FIUs), the judiciary and the magistracy all must take on the responsibility for
ensuring that in the AML/CFT arena a culture of compliance is engendered throughout the national
consciousness. The MEV reports on all CFATF members as the outcome of the monitoring for
compliance process are now being published on the CFATF web site and will be of value to our
international partners and in particular to the global investment community. The Caribbean Basin
region through concerted action must strive for a positive and responsible international image and
reputation and the publication of this paper is a step in that direction.
Keywords Money laundering,Terrorism, Caribbean
Paper type General review
Introduction
One of the virtues of living in the modern age is the capacity to benefit from the
staggering advances in technology, especially in the field of communications, which
have characterised the last couple of decades. Once far-flung corners of the world have
been brought within ready reach of one another, and the modalities of local and
The current issue and full text archive of this journal is available at
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Caribbean
Financial Action
Task Force
227
Journal of Financial Crime
Vol. 14 No. 3, 2007
pp. 227-249
qEmerald Group Publishing Limited
1359-0790
DOI 10.1108/13590790710758468
international business dealings have been transformed almost beyond recognition.
Perhaps, not surprisingly, along with the undoubted benefits to humankind come
severe disadvantages. Many persons involved in economic crime have restructured
their operations, aided by the technological innovations, so as to maximise their
transnational reach, and ultimately, their profit-earning prospects. In the context of the
“global village” practically no area of the world is immune from the risk of infiltration
by these practitioners of financial crime. Local and international law enforcement
agencies therefore face a stiff challenge in their mission of crime deterrence and
detection.
Against this background, it has been widely recognised that the threat of criminal
infiltration requires, among other strategies, not only the establishment of lead
agencies such as the Paris-based Financial Action Task Force (FATF), but also of
associated entities whose mandate is to promote appropriate anti-economic crime
measures in defined geographical areas. Accordingly, throughout several geopolitical
blocs of the world, member governments have set up entities along the lines of the
FATF with the remit to spearhead regional anti-money laundering and – financin gof
terrorism (AML/CFT) initiatives. The Caribbean Financial Action Task Force
(CFATF), the subject of this paper, is one such organ.
This paper has been contributed by two authors and is divided into three parts:
Part I[1] sets out the mandate and structure of the CFATF, and describes the range of
activities in which it has been engaged, together with some triumphs and challenges
experienced over its history. Part II[2] focuses on a critical component of the CFATF’s
remit, namely, the conduct of the mutual evaluation (MVE) programme, a peer review
process by which member states within the CFATF family are assessed for compliance
with AML/CFT requirements. Part III[3] constitutes the conclusion and offers some
observations on the way forward for the CFATF in its ongoing campaign against
financial crime.
Part I
The Caribbean Financial Action Task Force: mandate, structure and activities
In 1989 the Group of Seven industrialized nations, in recognition of the dangers posed
to the international financial system by the predations of criminal organisations,
moved to establish the FATF in order to foster international co-operation against
money laundering. Subsequently, the FATF 40 recommendations, the international
benchmarks to combat financial crime were launched. However, in order to be effective,
this defensive mechanism and adherence to the new benchmarks required global
coverage. Accordingly, rather than being confined to the developed countries, the
FATF encouraged the formation of FATF style regional bodies (FSRBs) around the
world.
Recognising the merits of these developments and responding swiftly to the call,
representatives from countries in the Caribbean and Central America convened to
develop a common approach against the phenomenon of the laundering of the proceeds
of crime, and as a result of meetings in May 1990 in Aruba and in November 1992 in
Jamaica, the CFATF was born.
Whilst affirming the intention to implement the FATF 40 recommendations to
combat money laundering, these Caribbean Basin countries showed an independence
of thought. Initially, the Aruba Conference on Money Laundering in June 1990
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