Jamaica - FATF-GAFI.ORG

1 Anti-money laundering and counter-terrorist financing measures Jamaica Mutual Evaluation Report January 2017. 1. CONTENTS. EXECUTIVE SUMMARY ..5. Key Findings ..5. Risks and General Situation ..7. Overall Level of Compliance and Terrorist financing and proliferation financing ..8. Priority Actions ..14. Effectiveness & Technical Compliance Ratings ..16. MUTUAL EVALUATION REPORT OF Jamaica ..17. Preface ..17. CHAPTER 1. ML/TF RISKS AND CONTEXT ..18. ML/TF Risks and Scoping of Higher-Risk Issues ..18. Materiality ..21. Structural Elements ..23. CHAPTER 2. NATIONAL AML/CFT POLICIES AND Key Findings and Recommended Actions ..29. Immediate Outcome 1 (Risk, Policy and Coordination).

2 30. CHAPTER 3. LEGAL SYSTEM AND OPERATIONAL ISSUES ..37. Key Findings and Recommended Actions ..37. Immediate Outcome 6 (Financial intelligence ML/TF) ..39. Immediate Outcome 7 (ML investigation and prosecution) ..46. Immediate Outcome 8 (Confiscation) ..53. CHAPTER 4. TERRORIST FINANCING AND FINANCING OF Key Findings and Recommended Actions ..58. Immediate Outcome 9 (TF investigation and prosecution)..60. Immediate Outcome 10 (TF preventive measures and financial sanctions) ..62. Immediate Outcome 11 (PF financial sanctions) ..64. CHAPTER 5. PREVENTIVE MEASURES ..65. Key Findings and Recommended Actions ..65. Immediate Outcome 4 (Preventive Measures) ..67. CHAPTER 6. SUPERVISION.

3 77. Key Findings and Recommended Actions ..77. Immediate Outcome 3 (Supervision) ..78. CHAPTER 7. LEGAL PERSONS AND ARRANGEMENTS ..89. Key Findings and Recommended Actions ..89. Immediate Outcome 5 (Legal Persons and Arrangements) ..90. CHAPTER 8. INTERNATIONAL Key Findings and Recommended Actions ..94. Immediate Outcome 2 (International Cooperation) ..95. 2. TECHNICAL COMPLIANCE Recommendation 1 - Assessing Risks and applying a Risk-Based Weighting and Recommendation 2 - National Cooperation and Coordination ..104. Weighting and Recommendation 3 - Money laundering offence ..105. Weighting and Recommendation 4 - Confiscation and provisional measures ..106. Weighting and Recommendation 5 - Terrorist financing offence.

4 107. Weighting and Recommendation 6 - Targeted financial sanctions related to terrorism and terrorist financing ..109. Weighting and Recommendation 7 Targeted financial sanctions related to Weighting and Recommendation 8 Non-profit organisations ..112. Weighting and Recommendation 9 Financial institution secrecy laws ..115. Weighting and Recommendation 10 Customer due diligence ..116. Weighting and Recommendation 11 Record-keeping ..120. Weighting and Recommendation 12 Politically exposed persons ..121. Weighting and conclusions ..122. Recommendation 13 Correspondent banking ..122. Weighting and Recommendation 14 Money or value transfer services ..123. Weighting and Recommendation 15 New technologies.

5 125. Weighting and Recommendation 16 Wire Weighting and Recommendation 17 Reliance on third parties ..128. Weighting and Recommendation 18 Internal controls and foreign branches and subsidiaries ..129. Weighting and Recommendation 19 Higher-risk countries ..131. Weighting and conclusions: ..132. Recommendation 20 Reporting of suspicious transaction ..132. Weighting and Recommendation 21 Tipping-off and confidentiality ..132. Weighting and Recommendation 22 DNFBPs: Customer due diligence ..133. Weighting and Recommendation 23 DNFBPs: Other measures ..136. Weighting and Recommendation 24 Transparency and beneficial ownership of legal persons ..137. Weighting and 3. Recommendation 25 Transparency and beneficial ownership of legal arrangements.

6 141. Weighting and Recommendation 26 Regulation and supervision of financial institutions ..143. Weighting and Recommendation 27 Powers of supervisors ..146. Weighting and Recommendation 28 Regulation and supervision of DNFBPs ..148. Weighting and Recommendation 29 - Financial intelligence units ..150. Weighting and Recommendation 30 Responsibilities of law enforcement and investigative authorities ..152. Weighting and Recommendation 31 - Powers of law enforcement and investigative authorities ..153. Weighting and Recommendation 32 Cash Weighting and Recommendation 33 Statistics ..157. Weighting and Recommendation 34 Guidance and feedback ..158. Weighting and Recommendation 35 Sanctions.

7 159. Weighting and Conclusions ..160. Recommendation 36 International instruments ..160. Weighting and Recommendation 37 - Mutual legal assistance ..161. Weighting and Recommendation 38 Mutual legal assistance: freezing and confiscation ..162. Weighting and conclusions ..163. Recommendation 39 Extradition ..163. Weighting and Recommendation 40 Other forms of international cooperation ..164. Summary of Technical Compliance Key Deficiencies ..169. Table of 4. EXECUTIVE SUMMARY. 1. This report provides a summary of the AML/CFT measures in place in Jamaica as at the date of the on- site visit (1st 12th June, 2015). It analyses the level of compliance with the FATF 40 Recommendations and the level of effectiveness of Jamaica 's AML/CFT system, and provides recommendations on how the system could be strengthened.

8 Key Findings Jamaica does not have a completed National Risk Assessment (NRA), but as a result of the National Security Policy (NSP) and subsequent work done by the National Anti-Money Laundering Committee (NAMLC), there is a reasonable level of understanding of ML/TF risk at the country level and mitigation strategies have been put in place to address those risks. However, greater effort needs to be made to involve all stakeholders. Jamaica cooperates with its international law enforcement counterparts, which has resulted in the prosecution and conviction of persons in some instances. Mutual legal assistance and extradition mechanisms are also used. In general, there is a high level of cooperation amongst domestic competent authorities, which is facilitated by NAMLC.

9 ML/TF measures are being implemented by the competent authorities some of whom have implemented a risk-based approach. Jamaica 's AML/CFT supervisory regime for financial institutions is adequate. There is a fairly robust licensing regime in place which deters criminals from holding senior management positions or becoming significant shareholders. The risk based approach (RBA) is still in its embryonic stage. The Bank of Jamaica (BOJ) has not yet revised its AML/CFT Guidance Note to incorporate a risk based approach in line with FATF Recommendations and local legislation. The AML/CFT regime does not extend to the microfinance sector which makes it vulnerable to ML/TF abuse. The NSP has identified attorneys as facilitators who are considered a high risk of ML/TF.

10 The General Legal Council (GLC) has been established and appears willing to implement a robust system of AML/CFT compliance for attorneys that conduct transactions specified by the FATF. Recommendations. However, the current injunction filed by the Jamaica Bar Association (JBA). against the implementation of the law in this regard increases the vulnerability of the sector to ML/TF. abuse. DNFIs/DNFBPs are currently not subject to the Terrorism Prevention Act (TPA) and Regulations made thereunder. Jamaica does not have sufficient measures in place to prevent the misuse of legal persons, legal arrangements and micro finance institutions for ML/TF. 5. The FIU has been able to execute its mandate to assist with the conduct of financial investigations, and the intelligence analyzed and disseminated by the FIU is used by LEAs and other competent authorities as a basis to conduct joint operations, audits and inspections.