Three weeks ago, the Basel AML Index Report, which ranks countries according to their risk of money laundering and terrorist financing, was issued. Regrettably, Trinidad and Tobago was considered the second highest risk country in the Caribbean and ranked 35 after Haiti at 17.
This 2017 edition of the Basel Report covers 146 countries and provides risk ratings based on the quality of a country’s framework for anti-money laundering and countering terrorism financing (AML/ CFT) and measures the risk of money laundering and terrorist financing of countries.
A total of 14 indicators dealing with AML/CFT regulations, corruption, financial standards, political disclosure and the rule of law are then aggregated into one overall risk score which is then used to rank countries. These indicators are grouped into five categories which are Money Laundering/Terrorist Financing, Corruption Risk, Financial Transparency and Standards, Public Transparency and Accountability and Political Risk. Trinidad and Tobago was also on the list of top ten countries whose ratings declined and recorded a higher risk rating this year.
Furthermore, since 2015 the Financial Action Task Force (FATF) has conducted and published 32 Mutual Evaluation Reports under a new assessment methodology, which combines an assessment of the FATF 40 recommendations based on technical compliance with an effectiveness assessment of the AML system. Of these 32 countries, which are arranged from low risk to high risk, Trinidad and Tobago ranked number 23; in other words, 23rd in 32 countries with the 32nd being the riskiest.
Additionally, on August 21 2017, the Global Forum on Transparency and Exchange of Information for Tax Purposes published outcomes from a new and enhanced round of peer reviews aimed at assessing compliance with international standards for the exchange of information on request between tax authorities. The first round of Global Forum peer reviews was completed from 2010 to 2016 and was generally done using a two-step process: first was the assessment of the legal and regulatory framework for information exchange (Phase 1) and second, the assessment of the actual practices and procedures (Phase 2). The new round of peer reviews – launched in mid-2016 – follows the sixyear process in 119 jurisdictions worldwide. Some jurisdictions, which were never able to show that they had made the necessary changes during the first round of reviews, were issued an overall rating of “Non-Compliant”. This was the case for Guatemala, Federated States of Micronesia, and Trinidad and Tobago. Guatemala and the Federated States of Micronesia have since demonstrated significant improvements and would now be rated “Largely Compliant”. Trinidad and Tobago was not able to show sufficient progress and remains the only jurisdiction rated “Non- Compliant”.
It is tempting to brush aside these external rankings and deem them to be insignificant of the other challenges in which we find ourselves.
However, doing so would reflect nothing but ignorance. In fact, this may be an opportunity to reinvent ourselves as a strong economic and business power in the Caribbean at least. We just need the political will to make it so.