DH | Dutch Caribbean AML forum opens

Anti-Money Laundering (AML) and Gaming Regulation Forum conference takes place in the Sonesta Maho Beach Resort, Casino and Spa’s of  Italian maffia casino owners

PHILIPSBURG–The fourth Dutch Caribbean Anti-Money Laundering (AML) and Gaming Regulation Forum was opened by Economic Affairs Minister Stuart Johnson at Sonesta Maho Beach Resort, Casino and Spa’s conference room on Tuesday morning. The forum will run until June 7.

The event brings together key stakeholders such as banks, compliance officers and internal risk managers; central banks, regulatory and supervisory bodies; financial intelligence units, treasury and revenue law enforcement; casinos, lotteries, slot and arcade operators; and designated non-financial businesses and professions (DNFBPs).

DNFBPs are law firms, auditors and accountants, insurance firms, real estate agents, car dealers, jewellers, credit unions, and charities.

In his opening address to stakeholders, Johnson said, “Anti-money-laundering and proper gaming practices are not just about making sure the money spent on our islands can be accurately accounted for. Throughout the Caribbean and the rest of the world, economic trends and challenges to maintain legitimacy in business practices continue to play a pivotal role in how we do business.

“Whether we are prepared and address the obstacles appropriately or sweep them beneath the proverbial rug will affect the type of activities we attract. This is a significant concern for the government of St. Maarten, especially considering that investment in primarily tourism-driven destinations such as ours is critical for our future economic sustainability.

“We now know that some businesses in St. Maarten sell the United States (US) Lottery Powerball and other games, which have clear cross-border sales restrictions. These restrictions will make it near impossible for legitimate winners from St. Maarten to lay claim to their jackpots in the US. We have a responsibility to educate players and we have to do so with the understanding that because … get rich, chance games will remain enticing to everyone who has a dream.

“This is not to say that all numbers games are operating illegally. Institutions such as the IGT that is publicly traded and offers the Caribbean Lottery Numbers games across the region have had a long-standing track record of above-ground practices. To ensure more such businesses can operate and contribute to the coffers of the government, we must now move to protect the legitimacy of the gaming industry and ensure strict regulations to decriminalise the gaming industry and stop the island from being blacklisted.

“Eight years ago, the Caribbean Financial Action Task Force (CFATF) – a branch of the Financial Action Task Force (FATF) – conducted a mutual evaluation of St. Maarten to determine its risks and exposure to, amongst other things, money-laundering. Those findings were submitted to the government with some recommendations for improvements.

“Unfortunately, it seems none of the suggestions have been executed. Today we are about two years away from the fourth round of the CFATF mutual evaluations, which should occur in 2021. These evaluations are necessary, as they determine how robust we are and if we should be blacklisted as a country for having irregular or unsafe financial practices that can be misconstrued or can open the floodgate to money-laundering and corruption.

“What does being on a financial blacklist mean for a small island like St. Maarten so heavily dependent on international trade and investments? Before moving further, I ask you to wrap your mind for a moment around a challenge one of our neighbouring islands is presently facing. Real estate development grew significantly over the last 10 years in St. Kitts based on the open-market sale of property through Citizenship by Investment programmes.

“This was a legitimate and profitable means of turning over capital and getting real investment into the country. The legitimacy of the programme is now being challenged by the European Union (EU) which is concerned that unsavoury actors are finding ways to secure Kittitian passports and using them as a means of gaining entry to other countries in which they are possibly blacklisted.

“My point is that regulations are there to protect everyone, and they matter. Without the right gaming regulations and proper anti-money-laundering practices, we put our economy and our people at risk. It will be irresponsible of us as government to allow this to occur.

“Amongst the risks are having bank transfers blocked and increased de-risking by banks. This will mean that many businesses would have to hide their money under a mattress because the banks would no longer accept it. Ultimately, this will create a trend that will cripple our economy, as we would no longer be able to do business with many international companies.

“With so many acts of terrorism globally, we must also consider that protection against money-laundering and corruption is not just about economics.”

The forum is supported by other stakeholders and will be presented by the International Governance and Risk Institute GovRisk which provides consultancy and training programmes to public- and private-sector institutions in more than 30 countries.

Johnson also stressed the importance of effectively managing financial transactions.

“Failure to effectively manage our financial transactions will put us at risk of criminal activity, including terrorism, which is funded through ill-gotten gains that usually has to be funnelled from one shady place to the next to facilitate crimes against humanity.

“We know that there are probably three main characteristics of money-laundering: Placement or moving money from its source in a disguise; layering, which means that you become more creative at hiding what you have moved; then the integration of that money back into the banking system.

“Today, experts and businesspersons in gaming and other industries will discuss a variety of ways to get the gaming industry in St. Maarten to an acceptable and regulated standard. You will also discuss ways to institute proper anti-money-laundering practices. During your discussions, the topic of whether St. Maarten should have a national lottery system and what it should look like would also be raised.

“We as the government are, however, mindful that without … independent evaluations and proper adherence to rules, having a national lottery is not by itself going to protect us from money-laundering, illegal gaming and other criminal risks.

“We must look at how institutions such as casinos and insurance companies and others are treated by regulators and banks to determine if the regulations match, or leave room for creative financial management activities.

“We must ask the hard questions: are insurance companies, and banks themselves, at risk? And how far are they at risk of becoming susceptible to money-laundering practices that could ultimately hurt our citizens who are their clients?”

In his closing remarks, Johnson encouraged forum attendees to recognise the value of the session. “Please take in as much as you can, so that you can all be part of the process as St. Maarten moves one step closer to implementing gaming and anti-money-laundering regulations for the future protection of our economy.”

The forum is preparing the Dutch Caribbean (St. Maarten, Aruba, Curaçao) and Suriname for the next round of mutual evaluations by the CFATF, such as promoting best practices in anti-money-laundering regulations and compliance. A number of issues will be discussed, including digital currencies, financial technologies (Fintech) and de-risking.

More than 100 casino directors, gaming regulators, compliance officers, law enforcement personnel and representatives of the legal and banking sectors of five Caribbean jurisdictions are on the island to attend the forum.

Bron: Daily Herald

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