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Saturday, October 19, 2019
Financial Intelligence Unit of Barbados

FAQs

What is money laundering?

Money laundering is the process of making dirty money appear clean. Criminals clearly wish to secure the profit of their nefarious activities.  Through money laundering, criminals process the criminal proceeds in order to disguise their illegal source.

How is money laundered?

In the initial – or placement – stage of money laundering, the launderer introduces his illegal profits into the financial system. After the funds have entered the financial system, the second – or layering – stage takes place. In this phase, the launderer engages in a series of conversions or movements of the funds to distance them from their source. Having successfully processed his criminal profits through the first two phases, the launderer then moves them to the third stage – integration – in which the funds re-enter the legitimate economy. For more information, please contact the FIU.

What is terrorist financing?

Terrorist financing is the process of financing terrorist acts. One of the main  differences between this and money laundering is that the source of the money used in terrorist financing may be perfectly legitimate. The source of money in money laundering is always an illegal source.

What model is the Barbados Financial Intelligence Unit?

We are an administrative Financial Intelligence Unit.

What are the different models of FIUs?

  • The Judicial Model is established within the judicial branch of government wherein “disclosures” of suspicious financial activity are received by the investigative agencies of a country from its financial sector such that the judiciary powers can be brought into play e.g. seizing funds, freezing accounts, conducting interrogations, detaining people, conducting searches, etc.
  • The Law Enforcement Model implements anti-money laundering measures alongside already existing law enforcement systems, supporting the efforts of multiple law enforcement or judicial authorities with concurrent or sometimes competing jurisdictional authority to investigate money laundering.
  • The Administrative Model is a centralized, independent, administrative authority, which receives and processes information from the financial sector and transmits disclosures to judicial or law enforcement authorities for prosecution. It functions as a “buffer” between the financial and the law enforcement communities.
  • The Hybrid Model serves as a disclosure intermediary and a link to both judicial and law enforcement authorities. It combines elements of at least two of the FIU models. (www.egmontgroup.org)

What is the FATF ?

The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing.  The Task Force is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

Since its creation the FATF has spearheaded the effort to adopt and implement measures designed to counter the use of the financial system by criminals.  It established a series of Recommendations, known as the 40 Recommendations in 2012 to ensure that they remain up- to- date and relevant to the evolving threat of money laundering that set out the basic framework for anti-money laundering efforts and are intended to be of universal application. The FATF has 36 members. Barbados is not a member of the FATF. Barbados is a member of the Caribbean Financial Action Task Force, an FATF- Style Regional Body that is an associate member of the FATF. For more information, direct your search to www.fatf-gafi.org.

What is the CFATF?

The Caribbean Financial Action Task Force (CFATF) is an organisation of twenty-nine states of the Caribbean Basin, which have agreed to implement common countermeasures to address the problem of criminal money laundering. Barbados is a member of the CFATF. For more information, direct your search to www.cfatf-gafic.org.

What is the Egmont Group of FIUs?

Recognising the benefits inherent in the development of a FIU network, in 1995, a group of FIUs met at the Egmont Arenberg Palace in Brussels and decided to establish an informal group for the stimulation of international co-operation. Now known as the Egmont Group of Financial Intelligence Units, these FIUs meet regularly to find ways to cooperate, especially in the areas of information exchange, training and the sharing of expertise. There are currently approximately 150 member FIUs. Barbados has been a member of the Egmont Group since 2002. For more information, direct your search to www.egmontgroup.org.

Who are the financial institutions that must report in accordance with the Money Laundering and Financing of Terrorism (Prevention and Control) Act (MLFTA), 2011-23

Financial Institutions are those entities identified in Section 2 of the MLFTA that are required to adhere to a number of obligations including record-keeping of financial transactions, implementing a compliance program and reporting to the FIU of Barbados.

Any business transaction where the identity of the person involved, the transaction or any other circumstance concerning that business transaction gives any officer or employee of the financial institution reasonable grounds to suspect that the transaction

(i) involves proceeds of crime;

(ii) involves the financing of terrorism; or

(iii) is of a suspicious or an unusual nature;

What is reported?

Any business transaction where the identity of the person involved, the transaction or any other circumstance concerning that business transaction gives any officer or employee of the financial institution reasonable grounds to suspect that the transaction

(i) involves proceeds of crime;

(ii) involves the financing of terrorism; or

(iii) is of a suspicious or an unusual nature;

(iv) is conducted by, or relates to, a person against whom a terrorist designation or a counter-proliferation designation order is in force or relates to the property of such a person;

Who are the DNFBPs that must report?

Second Schedule of the Money Laundering & Financing of Terrorism (Prevention & Control) Act,
2011-23

Non-Financial Business Entities and Professionals

A real estate agent involved in transactions concerning the purchase, sale or other disposal of real property A dealer in precious metals or precious stones engaged in financial transactions equal to or above the value set out in guidelines of the Authority.

An independent attorney-at-law or accountant engaged in any of the following:

a. the purchase, sale or other disposal of real property
b.the management of the money, securities or other assets of a customer
c.the management of bank savings or securities accounts
d.the organisation of contributions for the creation, operation or management of bodies corporate
e. the creation, operation or management of legal persons or arrangements; or
f. the purchase or sale of business entities.

A corporate or trust service provider engaged in any of the following:

a. acting as a formation, registration or management agent of legal persons;
b. acting or arranging for another to acts a director or secretary of a company, partner of a partnership or in a similar position in relation to other legal persons;
c. providing a registered office, business address or accommodation, or a correspondence or administrative address for a body corporate, partnership or other legal person or arrangement
d. acting or arranging for another to act as trustee of an express trust; or
e. Acting or arranging for another to act as a nominee shareholder for another person.

A person who operates a gaming institution engaged in financial transactions equal to or above the value set out in the guidelines of the Authority.

Can an individual forward information to the FIU?

The FIU receives information either from individuals who have disclosed their identity to the FIU or from anonymous individuals with respect to money laundering and terrorist financing. There is however no obligation for the FIU to provide feedback in such circumstances.

Is there a Reporting Form?

Yes. It is known as the Suspicious /Unusual Transaction Report (STR) Form. Please use this link to file a report.

How do I file a Report?

Reports can be forwarded to the FIU’s mailing address. Alternatively, one may forward the report by facsimile in urgent cases.

Can the financial institution disclose that an STR was filed with the FIU?

There are legislative provisions under the MLFTA prohibiting financial institutions from informing anyone including the client of the filing of the STR. Penalties or imprisonment accrue for failure to adhere with these legislative provisions.

What methods does the FIU employ to protect the information filed in the STR?

The FIU’s processes to protect the information in the STR are inter alia:-

  • The maintenance of high standards relating to confidentiality, security and integrity within the FIU and with its stakeholders.
  • Access to the FIU and its information is monitored and controlled.
  • In accordance with the MLFTA, information is only disclosed to, received by and disseminated from the FIU in the course of the duties of the relevant officer/agency relating to matters that may involves proceeds of crime, the financing of terrorism or is of a suspicious or an unusual nature.