AML laws won’t protect Cayman from regional crime

| 14/10/2011

(CNS): Although the Cayman Islands may be the highest ranking Caribbean nation when it comes to meeting international anti-money laundering standards, the jurisdiction still needs to pay close attention to the activities of its neighbours within the region when it comes to money laundering activities, according to Karen O’Brien of Global Compliance Solutions. O’Brien said that Cayman should be aware that illegal activities taking place within the Caribbean tars all countries in the region with the same brush when it comes to money laundering-related activities.

Delegates at the Global Compliance Solutions seventh annual conference on the subject, held this week at the Marriott Beach Resort heard that the Cayman Islands features almost at the top of the list of countries most compliant with the Financial Action Task Force’s 40 + 9 anti-money laundering recommendations.  But although Cayman ranked fourth, with 38 points, it could still be impacted by illegal activities elsewhere in the region , O’Brien said, highlighting issues such as ‘economic citizenship’ where by countries would sell citizenship to their country and effectively aid criminals by giving them numerous nationalities under which they could hide.

The region’s unprotected borders, particularly in relation to its sea borders were a real risk in the fight against money laundering and organised crime, she added, citing limited resources for the patrolling of borders as a principle reasonfor difficulties in this area. “People can move freely around the region,” she said.

Transshipment routes in the region enabled the passage of drugs from the production countries of Latin America to the consumers in the “target market” of the United States via the Caribbean, she explained, stating that 40 per cent of the world’s drugs trafficking moved through the Caribbean region.

The products of the proceeds of these ill-gotten gains could be seen in the empty high rise skyscrapers of Panama, O’Brien told the audience, an important centre for Colombians in particular to launder their drug money and turn it into bricks and mortar which they can sell off at a later date. This activity was aided by the fact that Colombian citizens could enter Panama without a visa.

O’Brien went on to describe some of the ways criminals were moving drugs up into the States, including the development of semi-submersible vessels and parasitic devices attached to the hulks of ships. “How many times do the port authorities check the hulks of ships on a daily basis,” she wondered. “It’s a problem.”

Miami Dade Country had assigned a specific task force team of divers to check the hulks of ships coming into the port there, O’Brien revealed and went on to describe some of the recent cases of corruption scandals and money laundering cases in the region which had featured in the press, all of which were challenges to anti-money laundering regimes in the region, she said.


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  1. Anonymous says:

    The sad fact is that we actually give credence to these so-called experts. People, listen up: it’s in their interests to highlight difficulties so that their businesses can then be hired to address them. But they know no more about the details than you or I. I suppose the reference to semi-submersibles and parasites shows at least that Karen has read her Frederick Forsythe. But this notion of lumping together all the nations of the Caribbean is a new one on me and frankly one I find insulting. Come on Karen: where are your facts to back it up?

  2. Anonymous says:

    We can't be responsible for our neighbors. We can only maintain the highest standards and promote this fact. 

    From time to time I have issues with the limited views of our local Compliance Officers. Just this week I was asked by a reputable firm to obtain personal references from, "attorney, accountant or pastor". I can only assume from this that they have no Jewish clients.

    • Anonymous says:

      I agree that we should not be responsible for our neighbours.


      Regarding the local compliance officer, maybe you are looking for more politically correct terminology.  Would religious leader suffice?  The Compliance Officer probably was reading off of a template, don't feel offended.  I am sure they do have many Jewish, Muslim clients as well as from other religions etc. It seems to be a lack of religious sensitivity.

      • Anonymous says:

        I'm not remotely offended. It just seems contradictory that the persons who are responsible for "know your customer" aren't even aware of such basic human differences. Not to diminish their role, but its too much of a box ticking approach and not enough common sense. 

  3. Anonymous says:

    It seems the movement of drugs hasn't changed over the years.