Editorial: Achievements against money laundering: case for national pride

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By Sir Ronald Sanders

(The author is Antigua and Barbuda’s Ambassador to the United States and former Chairman of the Caribbean Financial Action Task Force against money laundering and drug trafficking)

For over 20 years, successive governments of Caribbean countries, including Antigua and Barbuda, have objected to the findings of the International Narcotics Control Strategy Report (INCSR) of the US State Department that names jurisdictions as “major money launderers.”

The term “major money launderers,” applied to jurisdictions such as Antigua and Barbuda, is emotive, deceptive and vexatious, particularly when the facts prove that its application is unjust and unfair. Read by banks in the US, especially those that provide vital correspondent relations to banks in Caribbean jurisdictions, the annual INCSR has contributed to the withdrawal of such banking relations, threatening to cut off the region from the world’s financial and trading system.

That is why, for years, Antigua and Barbuda has rightfully led strong objections by Caribbean jurisdictions to the INCSR. It is also why we have consistently pointed out that the US is one of the top five major money laundering jurisdictions in the world. It is wrong for the US State Department to identify other jurisdictions while omitting the US, particularly as the scale of any money laundering in the US has, per force, to be greater than the majority of other countries, given the humongous size of its economy and the daily transactions of billions of dollars through its financial system.

To the credit of the US State Department, that omission has now been corrected.  The INCSR names the United States among the 82 countries it identifies as “major money launderers.”  It also names Canada, Belgium, the United Kingdom, Italy, Netherlands and Spain (the latter five are members of the European Union), as well as 19 Caribbean countries, among which Antigua and Barbuda is one.

In a sense, therefore, the branding of 82 countries in the 2019 INCSR as “major money launderers” has lost any constructive meaning. The very inclusion of poor jurisdictions such as Haiti and Dominica with the US, the UK, Canada and Italy in the same equal group underscores the fundamentally unrealistic categorisation.

It is, for this reason, that when, as Ambassador to the United States, I wrote to the US State Department immediately after the INCSR was released on 28 March, I said: “I note that the State Department has included the United States among the countries believed to be ‘major money launderers.’   However, the size of US money laundering events dwarfs the proven money laundering cases in small jurisdictions.”

To exemplify this latter point, the IMF reckons that the world Gross Domestic Product (GDP) in 2018 was US$135.24 trillion.  In that reckoning, the size of the US economy was US$20.89 trillion, while Antigua and Barbuda’s was US$1.5 billion.  Even if one were to insanely attribute 10% of the GDP of each country to money laundering, Antigua and Barbuda would account for US$150 million and the US for US$2.08 trillion – hardly in the same league.   

It is nonsense to contemplate that 10% of any country’s GDP involved money laundering.  That figure is used here only to illustrate why small economies such as Antigua and Barbuda cannot be realistically equated to the US, the UK, Canada and others as “major money launderers.” 

In the event, last year, up to the end of October, the International Banking Sector in Antigua and Barbuda had only US$2.1 billion in total assets; the US would have had tens of trillions.

The INCSR 2019 has to be read for its detail and not only for the broad-brush paragraph that names 82 jurisdictions, including the US and Antigua and Barbuda, as “major money launderers.” 

The US State Department states that the inclusion of a jurisdiction in the INCSR “is not an indication that a jurisdiction is not making strong efforts to combat money laundering or that it has not fully met relevant international standards.”  It emphasizes that: “The INCSR is not a “black list” of jurisdictions, nor are there sanctions associated with it.” Its purpose is to report to the US Congress, under the Foreign Assistance Act of 1961, about the adoption of laws and regulations to prevent narcotics-related money laundering by countries that receive US aid.

However, up until the 2019 INCSR, the State Department has included unofficial and unsubstantiated claims in the reports – a process to which Antigua and Barbuda has been in the forefront of those countries that have objected.

On 29 March, the day after the US State Department published the INCSR, I stated the following publicly:

“The 2019 Report is far fairer and more balanced than previous reports. It takes account of scrupulous assessments of the Antigua and Barbuda jurisdiction conducted by the Caribbean Financial Action Task Force that found the country to be one of the top performers in the Caribbean on its anti-money laundering and counter terrorism financing regimes.

“The report states that in its first sentence: ‘Antigua and Barbuda has improved its AML regime.’ It also recognizes that, ‘The government has developed a national action plan to address the issues’ noted in a National Risk Assessment, and that ‘the National Anti-Money Laundering Oversight Committee and other relevant agencies are also amending their policies and procedures accordingly.’

“With regard to drug trafficking, Antigua and Barbuda was assessed as part of the Eastern Caribbean which, the report states, ‘have strong working relationships with the United States on drug control operations’. The report points out that, during the first nine months of 2018, “Antigua and Barbuda reported 142 drug-related arrests with 70 prosecutions and 66 convictions.” 

“The 2019 US INCSR confirms that Antigua and Barbuda, as a jurisdiction, is aggressive in enforcing both its drug interdiction policies and its anti-money laundering regime. I commend the authors for a fairer and more balanced report.”

As a jurisdiction, Antigua and Barbuda has worked assiduously to comply with the highest standards imposed by the OECD Global Forum and the Financial Action Task Force, and it has been tried and tested by both those organisations and been adjudged either to be compliant or near compliant.

That accomplishment was attained with hard work, tough legislative and enforcement measures and at great expense of financial resources that could have been deployed elsewhere.

There is still work to be done. And it is being done by the Office of National Drug Control Policy, the Financial Services Regulatory Commission, the Eastern Caribbean Central Bank and others, in a supportive framework established and maintained by the government. 

This is one of those international accomplishments that was achieved despite the odds. It should be cause for national pride. 

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