Local charities not considered attractive for terrorist financing

There is good news for Jamaica as the country has been assessed as having a low vulnerability and threat level vis-à-vis terrorism financing.

As such, the country has not featured on the radar for terrorism financing with evidence suggesting that there has been no significant terrorism activity or terrorism financing activity detected in Jamaica.

However, Jamaica is not in the clear, based on its latest comprehensive National Risk Assessment (NRA) for Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT), published late August by the Bank of Jamaica.

In its 227-page report, Jamaica’s AML/CFT assessment points to the need for further strengthening of law enforcement and AML/CTF authorities in dealing with terrorism financing threats and vulnerabilities.

“Nevertheless, the authorities continue to engage in domestic and international cooperation to understand Jamaica’s changing vulnerability and threat environment,” the report said.

In relation to training, the assessment highlighted that significant strides have been made through the creation of training and development opportunities for agencies involved in terrorism financing investigations. This training, combined with the experience of the Financial Investigation Division (FID) has equipped staff to undertake terrorism financing investigations, should the need arise.

No concern about Jamaican charities involvement in terrorism financing

Law enforcement authorities  involved in AML/CFT matters finds that Jamaican charities have concluded there is no concern at this time about Jamaican charities involvement in terrorism financing. There are over 1,200 charities registered in Jamaica, the majority of which were established for religious purposes.

In the context of the Jamaican environment, the AML//CTF assessment highlighted that, “these entities are not considered attractive for terrorist financing and are considered to be low risk in this regard—a position supported by the findings of law enforcement agencies. Despite the low assessed risk, the non-profit organization (NPO) sector is not adequately supervised and requires significant resources and attention to facilitate robust supervision of the sector”. 

Charities are considered a part of the NPO sector. In the meantime, Jamaica’s AML/CFT eco-system is being strengthened as the framework to regulate Trust and Company Service Providers (TCSPs) is currently being put in place.

Trust and company services are provided by both financial institutions and non-financial entities usually as an additional service to their main offerings. However, the full extent to which these services are being provided in Jamaica is not fully determined due to the unregulated nature of the sector.

There is also an extensive network of law enforcement and supervisory agencies that are adequately empowered by statute and are increasingly collaborating on AML/CFT matters. This has been brought about by extensive amendments to the key legislations underpinning Jamaica’s AML/CFT framework, demonstrating the country’s commitment to the AML/CFT fight.

Jamaica’s overall country AML risk assessment

Based on a detailed analysis of 371 variables across eight modules, Jamaica’s overall country AML risk was assessed as medium-high. This reflects a national AML threat of medium-high and a national AML vulnerability of medium-high as well.

The medium high AML threat level is due to the significant number of investigations and prosecutions in Jamaica. The main threats identified in the assessment included lottery scamming, trafficking in narcotics, trafficking in arms, corruption/bribery, cybercrimes, fraud and importation of counterfeit products.

The key elements of national vulnerability medium-high assessment is predicated on, inter alia, Jamaica’s high crime rate, porous borders, geographic location, pace of investigations and prosecutions, high level of informality and significant use of cash in the economy.

The 2021 AML/CFT assessment report emphasises that the financial services sector is quite advanced in its implementation of risk-based supervision and licensees tend to have fairly effective compliance functions. The remittance sector was assessed as having the highest risk given the high incidence of AML investigations linked to lottery scamming.

The designated non-financial businesses and professions sector includes gaming operators, public accountants, real estate dealers and attorneys have been assessed medium risk with the exception of public accountants that was rated as Medium-Low.

In concluding the AML/CFT assessment said that “the professions in this sector must prioritise the full implementation of risk-based supervisory frameworks and strengthen compliance functions especially vis-à-vis suspicious transaction reporting”.

Sectors vis-à-vis threat level ranking 

·      Securities                                           Medium

·      Remittance Companies                    Medium-High

·      Insurance Companies                      Medium Low

·      Cambios                                           Medium

·      Credit Unions                                   Medium-Low

·      Real Estate Dealers                         Medium

·      Gaming                                            Medium-Low

·      Public Accountants                          Medium-Low

·      Attorneys-at-Law                             Medium