AML in Barbados

Money laundering poses a significant challenge in Barbados, given its role as a transit point for illegal substances. To combat this issue and discourage the spread of money laundering and terrorist financing, the government of Barbados has implemented several measures.

In 2002, Barbados approved the Anti-Terrorism Act, incorporating the United Nations (UN) International Convention for the Suppression of Terrorist Financing and UN Security Council Resolution 1373. Additionally, money laundering was criminalized through the Money Laundering (Prevention and Control) Act (MLPCA) in 1988. The MLPCA imposes strict penalties, including a maximum fine of $1 million USD and up to 25 years in jail for money laundering offenses. In 2000, the Anti-Money Laundering Authority (AMLA) was established as Barbados’ Financial Intelligence Unit (FIU) to ensure the compliance of all financial institutions with the MLPCA.

Barbadian financial institutions are required to adhere to a rigorous client verification policy, reporting and recording all transactions exceeding $5,000 USD. If a transaction is deemed exceptionally substantial or suspicious, Suspicious Activity Reports (SARs) must be filed with the AMLA. Moreover, the country has established Know Your Customer (KYC) standards to verify the identification of each customer and ensure their adherence to Barbados’ expanding AML system. These efforts collectively strengthen the country’s stance against money laundering and enhance its ability to combat financial crimes effectively.

Situated in Bridgetown, the Central Bank of Barbados bears the responsibility of fostering financial stability, upholding a robust financial framework, facilitating capital market growth, and directing bank credit towards productive ventures to support Barbados’ well-organized and sustained economic progress. Moreover, it aims to promote favorable credit and exchange conditions conducive to the country’s economic growth.

Before the establishment of the Central Bank in 1972, the major financial institution in Barbados was the East Caribbean Currency Authority (ECCA). However, unlike the current Barbados Central Bank, the ECCA lacked the authority to regulate financial institutions and could not provide guarantees for its policies.

The global threats posed by money laundering, terrorism financing, and the proliferation of weapons of mass destruction have compelled financial industry regulators and institutions to bolster their monitoring efforts. They are actively cooperating with governments to mitigate these risks and prevent their countries or organizations from getting entangled in such illicit activities.

Regulatory Authorities:
1. The Barbados Central Bank (CBB) Anti-Money Laundering Authority (AMLA)
2. Financial Services Commission (FSC)
3. International Business Unit (“IBU”) of the Ministry of International Business and Industry
4. Corporate Affairs and Intellectual Property Office (CAIPO)
5. Financial Intelligence Unit (FIU)

Key Regulations:
1. Financial Institutions Act, Section 324A (FIA)
2. Money Laundering and Terrorist Financing Act, 2011-23 (MLFTA)
3. Money Laundering and Terrorist Financing Amendment Act, 2019-22 (MLFTAA)
4. Anti-Terrorism Act (Chapter 158) (ATA)
5. 2019 Anti-Terrorism (Amendment) Act (ATAA)

Barbados has made some progress in enhancing its anti-money laundering system. An initial risk assessment revealed drug trafficking as the primary source of money laundering in the country. Moreover, Barbados is currently working on a comprehensive national risk assessment (NRA) to address any potential shortcomings in identifying significant national money laundering threats and weaknesses. Despite these challenges, Barbados boasts a thriving international financial services industry.