HAITI
Summary
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Sanctions

EU

FAFT AML Deficient

No but CFATF have identified significant deficiencies in Haiti's AML/CFT regime

Higher Risk Areas

 

Compliance with FATF 40 + 9 Recommendations

US Dept of State Money Laundering assessment

Not on EU White list equivalent jurisdictions

Corruption Index (Transparency International & W.G.I.)

World Governance Indicators (Average Score)

International Narcotics Control Majors List

Failed States Index (Political Issues)(Average Score)

 

 

ANTI-MONEY LAUNDERING

 

FATF Status

Caribbean FATF Public Statement on Haiti released following CFATF meeting on 9th November 2016

The CFATF undertook a High Level Mission (HLM) to the Republic of Haiti on Monday 27th of April 2015. Thereinafter, a letter from the CFATF Chair, was sent to Haiti on the 17th of September 2015, making reference that Haiti would remain in the second stage of enhanced of follow-up but would need to demonstrate progress. At the CFATF Plenary in November 2015, Haiti demonstrated some progress on non-legislative measures. Plenary determined that Haiti should remain in the status quo and demonstrate to the May 2016 Plenary substantial compliance with both non-legislative and legislative requirements. At the CFATF Plenary in June 2016, Haiti demonstrated that had taken steps towards improving its AML/CFT compliance regime with non-legislative actions, including providing training to FIU, Police officers, Prosecutors and Magistrates; and taking steps to join the Egmont Group. However, Plenary was not satisfied with the pace of reforms and agreed to the issuance of a public statement against Haiti asking members to consider the risk posed by Haiti. Plenary also agreed that Haiti must make sufficient progress and demonstrate such progress by the November 2016 Plenary. At the CFATF Plenary in November 2016, Haiti demonstrated that sufficient progress has been made through: the amended Law Sanctioning Money Laundering and Terrorist Financing (LSMLTF) by the Chamber of Deputies on September 9th, 2016 and by the Senate on September 28th, 2016; the enactment of the new UCREF law seeking to establish the l’Unité Centrale de Renseignements Financiers (Central Financial Intelligence Unit) (UCREF) as an autonomous administrative financial intelligence unit; and the publication in the National Gazette of the Decree establishing procedures for the implementation of measures aimed at freezing funds and other assets connected with the financing of terrorism.

Haiti is encouraged to continue the reform process including the passage of the legislative framework and continue addressing its AML/CFT deficiencies.

Haiti and the CFATF should continue to work together to ensure that Haiti’s reform process is completed, by addressing its remaining deficiencies and continue implementing its Action Plan.

 

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Haiti was undertaken by the Financial Action Task Force (FATF) in 2008. According to that Evaluation, Haiti was deemed Compliant for 1 and Largely Compliant for 6 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for 5 of the 6 Core Recommendations.

 

US Department of State Money Laundering assessment (INCSR)

Haiti was deemed a Jurisdiction of Primary Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR).

Key Findings from the report are as follows: -

 

Perceived Risks:

Haitian criminal gangs are engaged in international drug trafficking and other criminal and fraudulent activity, but do not appear to be involved in terrorist financing. While Haiti itself is not a major financial center, regional narcotics and money laundering enterprises utilize Haitian couriers, primarily via maritime routes. Much of the drug trafficking in Haiti, as well as the related money laundering, is connected to the United States. Further, most of the identified money laundering schemes involve significant amounts of U.S. currency held in financial institutions outside of Haiti or non-financial entities in Haiti, such as restaurants and other small businesses. A great majority of property confiscations to date have involved significant drug traffickers convicted in the United States. Illicit proceeds are also generated from corruption, embezzlement of government funds, smuggling, counterfeiting, kidnappings for ransom, illegal emigration and associated activities, and tax fraud.

Foreign currencies comprised 59.77 percent of Haiti’s bank deposits in August 2015, according to the Haitian Central Bank, a 2.98 percent increase from a year earlier. The weakness of the Haitian judicial system and prosecutorial mechanism continue to leave the country vulnerable to corruption and money laundering, despite improving financial intelligence and enforcement capacity.

Haiti has two operational free trade zones in Ouanaminthe and Carrefour. There are at least 62 casinos in Haiti, the majority unlicensed. Online gaming is illegal.

 

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SANCTIONS

UN and EU relating to the non-implementation by the military authorities to hand over power and instances of violations of human rights. The restrictions were initially put in place in 1994 but have been regularly reviewed and reduced since.

 

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BRIBERY & CORRUPTION

 

Index

Rating (100-Good / 0-Bad)

Transparency International Corruption Index

20

World Governance Indicator – Control of Corruption

9

 

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INVESTMENT CLIMATE - Executive Summary (US State Department)

Since 2011, the government of President Michel Martelly has taken steps to encourage foreign investment and to develop private-led, market-based, economic growth. The country, widely supported by international assistance, focuses on reinforcing public administration, developing infrastructure, and promoting investment. Private investment continues to grow, and set a 10-year high in 2013, outpacing foreign assistance spending in Haiti by more than 100 percent. The Haitian government has designated key investment sectors, including tourism, agriculture, construction, energy, and manufacturing, and it supports them through administrative incentives and public spending. The government is currently implementing a vast reform to improve the legal framework for doing business, drafting new laws, and amending outdated ones to encourage investment. In addition, investment promotion authorities have attempted to expedite business start-up by developing “off-the-shelf,” pre-registered corporations for investors seeking to do business in Haiti. The Government of Haiti hopes to increase private and foreign investments by 16 percent over the next two years.

Haiti’s economy grew by a 4.3 percent in 2013, while inflation remained in single digits, despite a depreciation of the local currency against the U.S. dollar. GDP growth is expected to remain at a similar level in 2014, supported by public investments, remittance inflows, and continued growth in the manufacturing, construction, and tourism industries. Despite being favorable, the general investment outlook for Haiti in 2014 will be contingent on the continuation of legal and structural reform efforts which have been delayed by long overdue elections and multiple ministerial changes.

 

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FURTHER REPORTS

2 May 2014  -  IMF Report  -  Haiti: Seventh Review Under the Extended Credit Facility

Extract:  -  "The banking sector remains sound. Credit to the private sector, which has nearly doubled since early 2010, slowed in recent months, following the tightening of monetary policy in February 2013. Broad money grew by about 7 percent (y/y) through end-September 2013. Financial soundness indicators of the banking system do not reveal potential weaknesses. The banking supervision department has strengthened the monitoring of the financial system (banks, transfer agencies and foreign exchange bureaux) by intensifying inspections, including with respect to the fight against money laundering. In this context, the BRH benefited from technical assistance from the U.S. Treasury’s Office of Technical Assistance (OTA). Joint inspections are carried out by OTA experts and inspectors from the supervision department at the BRH. Moreover, training was provided to inspectors, as well as to employees of banks, transfer agencies and foreign exchange bureaux, especially to enforcing officers."

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14 April 2014  -  Transparency International:  Haiti: a new anti-corruption law brings hope

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