Preparing the islands for the crucial 4th Round of Mutual Evaluations
WILLEMSTAD, PHILIPSBURG - The Financial Action Task Force (FATF) is a global organization established to ensure that financial systems have adequate Anti-Money Laundering, and to Counter the Financing of Terrorism (AML/CFT). All countries in the world, with the exception of the Islamic Republic of Iran and North Korea, have thus far committed to comply with the recommendations and standards established by the FATF.
The state of each country’s compliance with the FATF recommendations is assessed by means of a Mutual Evaluation (ME) and the status of each jurisdiction’s compliance is reported in a Mutual Evaluation Report (MER).
The third Round of Mutual Evaluations were to establish if countries had suitably robust laws and regulatory structures to achieving the recommendations previously set out.
The Dutch Caribbean jurisdictions did not fare well with regard to their AML/CFT preparedness and many industry sectors – such as Casinos, Law Firms, Real Estate Agents, Car Dealers, Accounting Firms and other Designated Non-Financial Businesses and Professions (DNFBPs) will be coming under particular scrutiny when the fourth Round of Mutual Evaluations take place in 2021.
Curaçao
The Caribbean Financial Action Taskforce (CFATF) MER titled, “Anti-Money Laundering and Combating the Financing of Terrorism – Curaçao”, dated 2012-06-25, provides an indication of the opaque nature of online gambling regulation in Curaçao.
The MER states at paragraph 1045 (in part), “… Casinos – land based casinos supervised by the GCB [Gaming Control Board Curaçao – ed], while Internet casinos, lotteries and other games of chance are the responsibility of the Ministry of xx” – literally “the Ministry of xx” as the CFATF could not establish the entity responsible for the Anti-Money Laundering and Countering Financing of Terrorism of Online Casinos!
This opaque regulatory environment has allowed internet gambling operators to thrive, projecting an illusion of regulation, when in practice no adequate regulation and AML/CFT supervision has been implemented.
St. Maarten
St. Maarten also has its problems in the gambling sector. The CFATF MER titled, “Anti-Money Laundering and Combating the Financing of Terrorism – Sint Maarten”, dated 2013-01-08 makes for troubling reading.
This MER states, at paragraph 27, “There is no comprehensive regulatory and supervisory AML/CFT regime in Sint Maarten for casinos; however, the Examiners were advised that within the Government, there has been discussion regarding the creation of a Gaming Control Board.
“There are no AML/CFT requirements for internet casinos. It is to be noted that threshold for casinos do not comply with the threshold set by FATF.”
Both Curaçao and St. Maarten have the fourth Round Mutual Evaluations scheduled for 2021 and 2024 respectively, and this round of Mutual Evaluations will assess AML/CFT recommendation compliance and regulatory effectiveness of a raft of industries including gambling.
Countries failing the fourth Round Evaluation run the very real risk of being placed on a watch-list, a grey-list or worse. Such a listing in turn can have catastrophic effects on the economy, making foreign investment more expensive or deterring investors altogether.
In response, Curaçao has moved internet casino regulation under the purview of the Gaming Control Board, where it is expected the regulator will shine a light into places that have not so far been subjected to any substantive regulation or AML/CFT oversight.
