The Caribbean: Trouble in Paradise — The Paradox of Anti Money Laundering Initiatives
| Published date | 01 March 1995 |
| Date | 01 March 1995 |
| DOI | https://doi.org/10.1108/eb025712 |
| Pages | 209-211 |
| Author | John S. Jeremie |
INTERNATIONAL
The Caribbean: Trouble in Paradise — The Paradox
of Anti Money Laundering Initiatives
John S. Jeremie
Journal of Financial Crime — Vol. 3 No. 2 — International
Despite recent signs of activity, the Caribbean1 has
not as a whole embraced the anti money-launder-
ing initiatives which have defined the legislative
agendas of many territories for the last decade.
Much of the problem is perhaps endemic.
Buf-
feted by hostile global economic conditions and
soft international demand for traditional products
several Caribbean economies have been buoyed,
albeit in discreet fashion, by the proceeds of illicit
drug trafficking.2 In many cases therefore, there
has been little in terms of an impetus to encourage
governments to decisive action.
The literature and evidence paint a caricature of
disembodied and ineffective action. Coopers and
Lybrand3 note that although practically all Car-
ibbean territories are signatories to the Vienna
Convention, only 30 per cent have taken the next
but necessary step to have the treaty ratified. The
position is even worse insofar as the Organization
of Eastern Caribbean States4 (OECS) is concerned.
Coopers and Lybrand note that 60 per cent of the
member states of the OECS have yet to take the
initial step of signing the Vienna Convention.
International law obligations apart, no independent
Commonwealth Caribbean territory (the British
dependencies are different)5 with the notable
exception of the Bahamas boasts of a developed
anti money-laundering law. There are encouraging
signs that the tide may be turning.
Anti money-laundering initiatives in the Car-
ibbean are of embarrassingly recent origins. They
have been led recently in large measure by a rush
of international and regional cooperative action
undertaken by the UN, the G7 and G10, the EC
and the OAS.
THE BAHAMAS
Traditionally perhaps the Caribbean territory with
the greatest notoriety in the lexicon of the inter-
national drug trade, the Bahamas, has legislated in
comprehensive fashion on money laundering. The
Bahamian legislation, Ch. 86 of 19816 provides for
the confiscation of the proceeds of predicate offen-
ces,
all referable to drug trafficking.
The Act makes it an offence punishable on con-
viction to imprisonment for 14 years, in the case of
an indictable proceeding, or five years in the case
of a summary proceeding, for a person to enter
into or be involved in any arrangement by virtue
of which the proceeds of another's drug trafficking
are controlled, used, managed or invested in such a
way as to make them still available to the owner.
The enabling prohibition in respect of forfeiture
empowers the courts to make or grant a confisca-
tion order in an amount equivalent to its assess-
ment of the value of the defendant's proceeds from
the predicate offence — drug trafficking. The mens
rea
or scienter requirement is established by proof
of
a
knowledge or suspicion in the affected person
that the relevant person is or has carried on drug
trafficking or has benefited from it. Zagaris7
describes the law to be 'among the most compre-
hensive of
its
kind in the developing world'.
The legislation notwithstanding the Bahamas
docs not entirely escape from the taint of inade-
quate action which sullies the images of many
Caribbean territories. In other key areas of anti
money-laundering activity the details reveal the
existence of
a
critical enforceability gap. Suspicious
transactions reporting, for example, remains volun-
tary although the Trading and Forfeiture law out-
laws a failure to report a suspicious transaction of
which a banker is aware. There is a critical lacuna
in the legislative edict in the extensive knowledge
requirement. Similarly, although there is a record-
ing norm which is sanctioned by the Banks and
Trust Companies Regulation Act,8 there is no gen-
eral disclosure obligation.
There is also no express domestic law 'Know
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