JAMAICA
Summary
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Sanctions

None

FAFT AML Deficient

No

Higher Risk Areas

 

US Dept of State Money Laundering Assessment

Not on EU White list equivalent jurisdictions

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

International Narcotics Control Majors List

Medium Risk Areas

 

Non - Compliance with FATF 40 + 9 Recommendations

World Governance Indicators (Average Score)

Failed States Index (Political Issues)(Average Score)

 

 

ANTI-MONEY LAUNDERING

 

FATF Status

Jamaica is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Jamaica was undertaken by the Financial Action Task Force (FATF) in 2016. According to that Evaluation, Jamaica was deemed Compliant for 6 and Largely Compliant for 10 of the FATF 40 Recommendations.

Key Findings

Jamaica does not have a completed National Risk Assessment (NRA), but as a result of the National Security Policy (NSP) and subsequent work done by the National Anti-Money Laundering Committee (NAMLC), there is a reasonable level of understanding of ML/TF risk at the country level and mitigation strategies have been put in place to address those risks. However, greater effort needs to be made to involve all stakeholders.

Jamaica cooperates with its international law enforcement counterparts, which has resulted in the prosecution and conviction of persons in some instances. Mutual legal assistance and extradition mechanisms are also used.

In general, there is a high level of cooperation amongst domestic competent authorities, which is facilitated by NAMLC. ML/TF measures are being implemented by the competent authorities some of whom have implemented a risk-based approach.

Jamaica’s AML/CFT supervisory regime for financial institutions is adequate. There is a fairly robust licensing regime in place which deters criminals from holding senior management positions or becoming significant shareholders. The risk based approach (RBA) is still in its embryonic stage.

The Bank of Jamaica (BOJ) has not yet revised its AML/CFT Guidance Note to incorporate a risk based approach in line with FATF Recommendations and local legislation. The AML/CFT regime does not extend to the microfinance sector which makes it vulnerable to ML/TF abuse.

The NSP has identified attorneys as facilitators who are considered a high risk of ML/TF. The General Legal Council (GLC) has been established and appears willing to implement a robust system of AML/CFT compliance for attorneys that conduct transactions specified by the FATF Recommendations. However, the current injunction filed by the Jamaica Bar Association (JBA) against the implementation of the law in this regard increases the vulnerability of the sector to ML/TF abuse.

DNFIs/DNFBPs are currently not subject to the Terrorism Prevention Act (TPA) and Regulations made thereunder.

Jamaica does not have sufficient measures in place to prevent the misuse of legal persons, legal arrangements and micro finance institutions for ML/TF.

The FIU has been able to execute its mandate to assist with the conduct of financial investigations, and the intelligence analyzed and disseminated by the FIU is used by LEAs and other competent authorities as a basis to conduct joint operations, audits and inspections. However, there should be more statistical data on how the analysis and disseminated STRs support the system of financial investigations.

Financial intelligence and other relevant information can be directly accessed in real time by various competent authorities to facilitate investigations of predicate offences, trace assets and identify trends and typologies.

There is insufficient coordination in the Jamaica Resident Magistrate’s (RM) Court system with regard to pursuing ML/TF prosecutions. There is a tendency by Clerks not to put these matters forward and settle for the prosecution of the predicate offence or cash forfeiture aspect. Issues such as insufficient training in ML/TF matters, lack of priority of ML/TF cases, incomplete investigations and reticence on the part of the RM to deal with ML/TF matters, which tend to be more complicated, contribute to this situation.

Jamaica has pursued ‘taking the profit out of crime’ as a national policy. However, there is a need to assess how consistent confiscation and seizures are in keeping with the country’s ML/TF risk.

In respect to legal persons, sanctions for ML/TF offences while considered proportionate are not effective or dissuasive.

The mechanisms to deal with terrorism and TF investigations are not effective.

A TF threat assessment of the NPO sector has not been undertaken. The sector is yet to develop a risk based CFT regime.

Jamaica has very limited experience in TF investigations and prosecutions and is yet to secure any convictions for the TF offence.

Jamaica has only recently established a dedicated unit to investigate TF offences in the form of the Counter-Terrorism and Organized Crime Branch (CTOC) within the Jamaica Constabulary Force (JCF), which has affected their level of effectiveness in dealing with TF matters.

Jamaica has commenced initiatives to formulate procedures to address proliferation financing (PF) risks. However, the measures to deal with PF will have to be developed substantially to meet the UN Security Council Resolutions’ (UNSCRs) requirements and FATF’s Recommendations.

There is a delay in communicating all UN designations to FIs. Additionally, there are delays in the implementation of targeted financial sanctions (TFS) for terrorism and PF.

FIs which are part of financial groups understand ML/TF risks and have implemented preventative measures through the adoption of group compliance programmes, compliance and Internal Audit functions.

Risks and General Situation

The NSP, identified narcotics and weapons trafficking, organised crime (both local and transnational), cybercrime (particularly in relation to lotto scams), fraud, extortion, contract killing, kidnapping, money laundering, facilitators who launder proceeds of crime and corruption within the public sector as Tier 1 threats. Local organised crime groups are prevalent in Jamaica, some of which have a wider reach into the Caribbean and North American region. In recent years the focus on criminal proceeds has shifted to the lotto scams being carried out by various Jamaican nationals on persons in other jurisdictions, primarily the United States of America (USA).

While the NSP did not focus specifically on the identification of ML/TF risk, the Assessors review of the results of the exercise, as well as discussions with the relevant agencies indicate that there is a reasonable understanding at the country level of the ML risk associated with the identified threats and vulnerabilities to Jamaica’s national security. The main channels identified in the NSP most vulnerable to ML associated activities include the banking system and the use of DNFIs/DNFBPs as facilitators to launder the proceeds of crime.

Additionally, there is a high degree of domestic cooperation among law enforcement agencies, supervisory authorities and other key AML/CFT stakeholders. At present there are minimal efforts in terms of policy and implementation of actions to mitigate the financing of proliferation of weapons of mass destruction. The results of the NRA would help to augment the country’s understanding and assessment of ML/TF risks and would enable further prioritising, mitigating policies and actions to be implemented.

Terrorism has been identified in the NSP as a Tier 2 risk (low probability: high impact) and focused mainly on narco-terrorism and tourism related terrorism. The threat of terrorism is considered to be relatively low; however, the NSP did not address Jamaica’s TF risk. Accordingly, more emphasis needs to be placed on the identification, assessment and mitigation of potential TF risks.

The abatement of the implementation of the AML/CFT regime against lawyers significantly affects the effectiveness of the AML/CFT system given the recognized risk of this sector and the fact that they perform the functions of Trust and Company Service Providers (TCSPs), which are currently not specifically designated as DNFIs/DNFBPs.

There is a licensing regime administered by the BOJ and FSC which is a deterrent to criminals from using financial vehicles as a conduit for ML/TF activities. Fitness and propriety assessments are undertaken. Additionally, there are processes in place e.g. onsite examinations, which facilitate the feedback of deficiencies in AML/CFT policy and mitigation activities and for remedial actions to be taken.

The FSC and BOJ (in the case of the deposit taking institutions (DTIs)) have not administered any sanctions but they continue to work with the financial institutions to remedy deficiencies arising from the onsite examinations. However, the BOJ has revoked cambio licenses where there have been breaches of the Operating Directions and/or the AML legislation.

Supervisors have issued Guidance to the financial sector and are readily available and responsive to provide feedback on AML/CFT issues. The Bank of Jamaica has not yet revised its AML/CFT Guidance Notes to incorporate recent legislative changes which provide for a risk based approach to AML/CFT.

Financial institutions understand AML/CFT risks and have group compliance programmes approved by their board of directors. There is oversight of the compliance function by Audit Committees of the Board. To the extent possible, financial institutions seek to collect beneficial ownership information from customers.

 

US Department of State Money Laundering assessment (INCSR)

Jamaica is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

OVERVIEW

 

Money laundering in Jamaica is primarily related to proceeds from illegal narcotics and fraud schemes and is largely controlled by organized criminal groups. Jamaica continues to experience a large number of financial crimes related to advance fee fraud (lottery scams), corruption, and cybercrime.

 

Since the Proceeds of Crime Act was instituted in 2007, Jamaica’s Financial Investigations Division, which includes the FIU, has used the act to seize approximately $20 million in properties and other assets believed to be derived from criminal activities. The Proceeds of Crime Act has been increasingly successful but is still not being implemented to its fullest potential due to difficulties prosecuting financial crime and achieving convictions in these cases.

 

The Government of Jamaica should make a concerted effort to identify money laundering-related activities and deter political and public corruption, while working to ensure that financial institutions are as inclusive as possible. Jamaica also should take steps to provide sufficient resources to the prosecutors and courts and should review and amend, if necessary, its case- processing procedures to enhance its ability to prosecute financial crimes fairly and efficiently. Jamaica should also further develop the capacities of its law enforcement and prosecutorial authorities in order to successfully prosecute financial crime cases.

 

VULNERABILITIES AND EXPECTED TYPOLOGIES

 

Money laundering in Jamaica is primarily related to proceeds from illegal narcotics, financial scams, and extortion and is largely controlled by organized criminal groups. There are dozens of violent Jamaican gangs on the island. Jamaica continues to experience a large number of financial crimes related to cybercrime and advance fee fraud (lottery scams), which primarily target U.S. citizens.

 

KEY AML LAWS AND REGULATIONS

 

The Proceeds of Crime Act has been increasingly successful but is still not being used to its fullest potential. The act incorporates the existing provisions of its predecessor legislation and permits the civil forfeiture of assets related to criminal activity. The act has expanded the confiscation powers of the Government of Jamaica and permits, in addition to pre-conviction forfeiture of assets, a post-conviction forfeiture of benefits assessed to have been received by the convicted party within the six years preceding the conviction. The act criminalizes money laundering related to narcotics offenses, fraud, firearms trafficking, human trafficking, terrorist financing, and corruption and applies to all property or assets associated with an individual convicted or suspected of involvement with a crime. This includes legitimate businesses used to launder drug money. The Financial Investigation Division continues to work with partners in the Jamaica Constabulary Force and others to refer cases which could result in seizure of assets.

 

In 2014, Jamaica passed the Banking Services Act, which allows for greater information sharing among the Bank of Jamaica, the Financial Services Commission, and foreign counterparts.

 

Jamaica’s financial institutions (including money remitters and cambios) file an inordinately high volume of suspicious transaction reports annually, the vast majority of which are deemed defensive filings.

 

In 2016, the Financial Investigations Division began using AML software to allow for the online filing of CTRs and STRs by over 300 financial institutions, real estate agents, and other regulated entities. It also allows for the automated analysis of these disclosures and the generation of both tactical and strategic reports to improve the overall effectiveness of combating money laundering and identifying drug trafficking and other criminal activities.

 

Jamaica is a member of the CFATF, a FATF-style regional body.

 

AML DEFICIENCIES

 

Lengthy delays in processing judicial orders hinder the effectiveness of the Jamaican court system. The Jamaican courts and prosecutors have been unable to keep pace with an increase of all charged crimes, including financial crimes. Inefficient methods of practice amongst the investigators, prosecutors, defense bar, and judiciary, combined with corruption and a culture of unaccountability, further exasperates an already overburdened system. Jamaica has chosen to pursue predicate offenses to money laundering, rather than pursuing money laundering as a stand-alone offense, due to the challenge of investigating and prosecuting money laundering cases. This has resulted in the non-prioritization of money laundering investigations and fewer money laundering prosecutions and convictions.

 

Political and public corruption both generate and facilitate illicit funds and activity.

 

ENFORCEMENT/IMPLEMENTATION ISSUES AND COMMENTS

 

Although lawyers are included in 2014 amendments to the AML regulations, the Jamaican Bar Association filed an injunction to exclude them from AML requirements. That action is still pending.

 

In 2015, there were twenty-two prosecutions and four convictions related to money laundering, bringing the tally to ninety-seven such prosecutions and ten convictions in the last six years.

 

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SANCTIONS

There are no international sanctions currently in force against this country.

 

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BRIBERY & CORRUPTION

 

Index

Rating (100-Good / 0-Bad)

Transparency International Corruption Index

39

World Governance Indicator – Control of Corruption

48

 

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INVESTMENT CLIMATE - Executive Summary (US State Department)

The Government of Jamaica (GoJ) has committed itself to attracting foreign direct investment to drive economic growth. Jamaica signed a US$932 million Extended Fund Facility with the International Monetary Fund in May 2013 to, in part, effect significant structural reforms to encourage investment. For example, the government eliminated discretionary tax exemptions that were non-compliant with the WTO Agreement on Subsidies and Countervailing Measures and should have been phased out by 2003. The WTO granted Jamaica an extension to revise its incentives by the end of 2013. To satisfy this obligation, the GoJ passed the Omnibus legislation, which took effect on January 1, 2014, that codified tax benefits for all investors, simplified the income tax code, and broadened the tax base. Although Jamaica scores well on the World Bank’s Doing Business Report in terms of selling property and starting a business, the bureaucracy remains a deterrent to investment, with the country underperforming in the areas of paying taxes and getting electricity. Jamaica’s ranking fell from 91st in 2013 to 94th in the 2014 World Bank Doing Business Report.

Jamaica received US$564 million in foreign direct investments during 2012, up from US$218.2 million in 2011. The country recorded thirteen straight quarters of economic decline between 2008 and 2010. GDP grew by 1.3% in 2011, but declined again in 2012 due to the fiscal consolidation efforts associated with the ambitious economic reform program. With the implementation of the IMF agreement and several positive IMF quarterly reviews, Jamaica recorded 0.5% growth in the last quarter of 2013 and an overall 0.2% growth for the year. Positive growth is expected to continue in 2014 and the rate could accelerate in the medium term if one or more of the country’s planned mega projects come to fruition.

Jamaica has no restrictions on holding funds or on transferring funds associated with an investment, as the country liberalized its foreign exchange market in 1991. Property rights are protected under Section 18 of the Jamaican Constitution. While expropriation of land may occur under the Land Acquisition Act, compensation must take place on the basis of market value. Disputes between enterprises are handled in the local courts, but foreign investors can refer cases to the International Center for Settlement of Investment Disputes (ICSID). There have been cases of trademark infringements in which U.S. firms took action and were granted restitution in the local courts.

While the Embassy is not aware of any U.S. firm identifying corruption as an obstacle to foreign investment, corruption remains a major concern in Jamaica. Although the country has enacted a Corruption Prevention Act and is signatory to a number of international conventions, there have been no major convictions. Jamaica ranks 83 out of the 175 countries surveyed globally on the Transparency International's Perception Index.