Jamaica is well on the way to having its name removed from the international watch list of countries with weak Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) regime.

This is based on the fact that Jamaica has just had its AML/CTF ratings upgraded by the Caribbean Financial Action Task Force (CFATF). Since being placed on the watch list earlier this year, Jamaica has been working assiduously to improve its AML/CTF framework to meet international standard.

This work is paying off, resulting in the upgrade to the country’s ratings by the CFATF. The CFATF is an organisation of states and territories of the Caribbean basin, which have agreed to implement common counter-measures against money laundering and terrorism financing recommended by the Financial Action Task Force (FATF), which is a global money laundering and terrorist financing watchdog.

Minister of Foreign Affairs and Foreign Trade, Senator Kamina Johnson-Smith, who made the disclosure pointed out that a review meeting of the CFATF took place two weeks at which time Jamaica got an upgrade in its AML/CFT framework. She stated that Jamaica has been upgraded in 12 recommended areas of concern.

Jamaica got upgrade after requesting a reclassification

Speaking in the Senate recently whilst piloting two Ministerial Banking Orders, Johnson-Smith stated, “We applied for reclassification and we have been upgraded…The Government is actively seeking to continue to improve our ratings by taking the necessary legislative and administrative measures to address deficiencies.”

The two banking orders, which she successfully piloted through the upper House of the Jamaican Parliament served to further strengthen the country’s anti-money laundering and counter-financing of terrorism framework. They were the Banking Services (Designated Financial Services) (Business of Buying and Selling Foreign Currency) Order, 2020; and the Banking Services (Designated Financial Services) (Provision of Electronic Retail Payment Services) Order, 2020.

The Banking Orders will designate electronic retail payment services and the buying and selling of foreign exchange as financial services under the Banking Services Act (BSA). Senator Johnson-Smith, who is also Leader of Government Business in the Senate, explained that the orders will undoubtedly contribute to the enhancement of the legal framework required to meet international standards.

She pointed out that through these banking orders, the Bank of Jamaica (BOJ), which regulates Jamaica’s banking system, is seeking the designations to fulfill certain recommendations and address deficiencies identified by the CFATF in its assessment of Jamaica’s AML/CFT framework. Johnson-Smith posited that one of the objectives of the BOJ is to ensure that there is appropriate regulatory oversight for AML/CFT measures.

This, she argued must of course include oversight of services provided by cambios and electronics retail payment service providers. The Leader of Government Business in the Senate noted that the objective of the orders is to expand the definition of financial services to include the buying and selling of foreign currency and engaging in electronic retail payment services.

Pilot project to strengthen framework for payment services

Senator Johnson-Smith disclosed that the BOJ is currently engaged in a project to prepare policy proposals to strengthen the legislative and regulatory framework for the supervision payment services to provide the enabling environment for the delivery of regulated financial services to Jamaicans. According to the Senate leader on the government bench, “The designation of payment services as financial services will complement the BOJ’s efforts at improving financial access under the national financial inclusion strategy as well.”

Speaking with Our Today in November, officials at the BOJ expressed confidence at having Jamaica removed from the international watch list of countries with weak AML/ CFT regime.

BOJ Deputy Governor Maureen Simms pointed out that the central bank has done much work in attempting to satisfy the European Union’s Financial Action Task Force (FATF) AML/CTF requirements, which would see Jamaica being removed from the watch list, which it was placed on earlier this year..

The country was placed on the watch list by the FATF, which found Jamaica to be deficient in several areas of AML/CTF, including not having a National Risk Assessment. This assessment would ascertain the country’s institutional readiness and gaps or failures in stemming the financing of terrorist groups or money laundering.

Jamaica was also found to be lacking in its terrorism threat assessment of not-for-profit organisations or charitable organisations. In addition, Jamaica had not yet done an overall terrorism finance threat assessment.