CHAIRMAN’S WORK PROGRAMME 2010 – 2011

It is indeed an honour and privilege for the Government and people of the Cayman Islands to serve once again the best interests of the Caribbean Basin Region in the fight against Money Laundering and the Financing of Terrorism (AML/CFT) as Chair of the Caribbean Financial Action Task Force (CFATF).

This important leadership role comes at a time of considerable financial hardships for Member countries which is adversely impacting on the ability of the organisation to undertake its affairs with due dispatch. Indeed it also has the potential to similarly affect the image and reputation of this FATF Style Regional Body as an effective partner with the international community in the fight against trans-national organised crime.

This is a situation which must be confronted directly and in a robust fashion. Members must pay the annual contribution in a timely fashion and the CFATF must now take decisive steps in the event of continuing breach. Members in arrears must be brought before each and every Plenary and Ministerial meetings to account for failure to honour their financial commitments. This must be the approach over the coming year and beyond.

The Secretariat staff will be placed in the untenable position of not being able to confidently meet the organisational obligations for extended periods of time which is currently the case. This unfortunate situation must be brought to a speedy resolution because it is inimical to staff morale and detrimental to their ability to successfully and efficiently undertake critically important duties.

I recognise however that all this has to be balanced against the fact of the enormous challenges facing Members countries where there are competing priorities including national and international initiatives competing for the few scarce resources in the budget and their struggling domestic economies.

Consequently this call to serve comes at a time of convulsion and introspection at the CFATF. The mandate and deliberations of the Working Group on Reflection and Improvement are pivotal to charting the way forward where the CFATF as a whole, through all its organs, will be able to attain its fullest potential.

However we must all be mindful that participation in this dialogue must be approached in a constructive and respectful fashion and that the bases upon which policy options are advocated must be premised on accurate information supported where relevant by empirical data, so that the seriousness of this exercise is not in any way diminished.

The attrition in our membership from which the Working Group on Reflection and Improvement initiative arose must not blind us to the excitement that has accompanied the birth of the two newest countries in the world, Curacao and St. Marteen who are soon to be welcomed into the CFATF family of nations.

Our family is rich and diverse in language, culture, history and geography and must remain so.

In this regard, the Cayman Islands would like to offer its support for the proposal for Guatemala with the support of all our Spanish speaking Members to host the CFATF branch office in Guatemala City and call upon all our Members and our COSUN and Observer friends and colleagues to lend their support and expertise to making this proposal a reality subject of course to the necessary cost benefit analysis and other assessments of the proposal.

If agreed there certainly will be some challenges because we cannot at this juncture foresee all eventualities but these should not stymie us into inaction. We must move forward on this front because it is a significant step in preserving the integrity of our organisation including allowing the organisation to better interface with some of our Spanish speaking Members in that region.

Whilst we earnestly seek to improve the growth, development and performance of the organisation we must not allow ourselves to deny the strides that the CFATF has and continues to make in all areas of our work. Yes we must admit that there is room for improvement. The postponement of the discussion of three Mutual Evaluation Reports is cause for concern because it gives the impression that the organisation is faltering.

However this is not a habitual occurrence and resolution requires a dispassionate examination of the surrounding facts so that lessons are learnt for the future. Members, Examiners and the Secretariat must ensure that the Mutual Evaluation Reports of Belize, Guyana and Montserrat are ready for discussion at the May 2011 Plenary Meeting. Failure here cannot be countenanced and we therefore urge strict adherence.

So too with the Follow up Reports. Members should be reminded that their failure to adhere to established and agreed deadlines for the submission of relevant legislation and information prevents the Secretariat from properly preparing these Reports for Plenary. Here too improvement is necessary and it is hoped will be forthcoming.

I wish to underscore that the business of this organisation cannot be moved forward without the active involvement and commitment of all its Members. The decision making process on all issues are for our Members. This is a responsibility we must all accept. The time for change is now as we build on the accomplishments of former Chair de Lannooy in changing the psychology of the organisation.

THE MUTUAL EVALUATION PROGRAMME

As the CFATF draws to the end of the Third Round of Evaluations the focus will now fall on the Follow Up process as we await the outcome of the global dialogue on the format of the Fourth Round of Assessments. Expeditious rectification of identified deficiencies must be the central focus over the next twelve months. Robust and intrusive action by the Plenary and Ministers is essential. Sanctions, where necessary, must be instituted in the interests of higher levels of regional compliance with the international AML/CFT standards. 

 TECHNICAL ASSISTANCE AND TRAINING

It is clear that the continuing impact of the global economic and financial crisis makes it highly unlikely that the Caribbean Basin Region will be able to sustain the existing and indeed desired pace of AML/CFT reform efforts without the allocation of human and financial resources by our traditional and new donor partners.

As such the CFATF Secretariat with a view to securing the highest levels of compliance with the FATF 40 and 9 Recommendations across the CFATF membership during 2011-2012, will continue its close co-operation and co-ordination efforts with all CFATF friends and supporters in the international donor community in order to draw on available and planned Technical Assistance and Training initiatives.

In this regard the Charts depicting Regional and Jurisdiction by Jurisdiction Compliance with the FATF 40 and 9 Recommendations including the Key and Core Recommendations and the CFATF Needs and Availability of Resources Analysis will be critical tools in the identification of urgent and strategic weaknesses in the AML/CFT frameworks, and the devising of targeted work programmes aimed at rectification, in tandem with the judicious allocation of relevant resources. 

The Cayman Islands will like to commend the Heads of Financial Intelligence Units Forum for the Training and Accreditation Project for Financial Investigators and Analysts. This programme will be vital to enhancing regional capacity to effectively combat sophisticated financial crimes and to confiscate criminal proceeds. The Secretariat will be tasked to intensify efforts to secure the necessary funding for this enterprise.     

TYPOLOGIES EXERCISE PROGRAMME

The CFATF must stay at the forefront of the dissemination of information on the vulnerabilities of the Caribbean Basin Region to money laundering and terrorist activities. The need to increase the awareness of all stakeholders in both the public and private sectors of the attendant risks and facilitate the erection of adequate defensive mechanisms regionally is critical.

Successful prosecutions for money laundering and combating the financing of terrorism offences are on the increase across the CFATF membership and the significant efforts of the CFATF led project on Trust and Company Service Providers cannot be allowed to stand on their own. Accordingly during our term as Chair, Members will be encouraged to re-convene the Typologies Working Group so that all relevant information could be submitted to it through the Secretariat for preparation of the second edition of the CFATF Typologies Publication by November 2011.

The Typologies Working Group will be mandated to explore the following topics as possible areas for a Typology Exercise during 2011;

• The cross border movement of cash and negotiable instruments
• Human Trafficking and
• The Proliferation of Small Arms and Ammunition
• Ponzi/Pyramid and Illegal Lottery Schemes

Additionally the Typologies Working Group will be tasked to work with the Secretariat with organising a conference for regional public and private sector officials on the topic- The Impact of Transnational Organised Crime on the Economic Development and Security of the Caribbean Basin Region, during the first quarter of 2011.     

 ASSOCIATE MEMBER UPDATE

The grant of Associate Member Status with the FATF was indeed a significant accomplishment for our organisation which gives the region a voice in determining the global AML/CFT agenda through the participation of five CFATF members on a rotating basis at the Working Group and Plenary meetings of the FATF.

 

Currently, the FATF agenda includes several key issues which are under consideration and for which there should be regional input particularly in relation to the lessons being learnt from implementation of  the CFATF Third Round of Mutual Evaluations and preparations for and nature of the Fourth Round of Mutual Evaluations.

The current financial conditions militate against the ability of the Secretariat to have a full team of staff members to cover all FATF Working Group meetings. Accordingly with a view to ensuring that CFATF representation is given an enhanced profile the Cayman Islands would like to call on all Members to take advantage of this valuable opportunity during the coming year to support the Secretariat by their presence and active participation at FATF Plenary and Working Group meetings. When our financial situation ameliorates, the Secretariat will then be adequately represented 

 THE CFATF STRATEGIC PLAN

Guatemala must be recognised for its leadership position with the development of the Strategic Plan, a role which could be effectively utilised to develop a strong, cohesive, proactive and responsive organisation.

During our period as Chair we will like to reconvene the Strategic Plan Working Group in order to consider the outcome of the Working Group on Reflection and Improvement led by the distinguished delegate Mrs. Audrey Anderson of Jamaica and to map and monitor the implementation of the various initiatives outlined in the Plan.   

We must also now seek to build on the initial report including recommendations presented yesterday by the distinguished delegate from Bermuda Mrs. Cheryl Lister. We must challenge ourselves to carry out the organisational introspection contemplated by these exercises so that we can effectively tackle the challenges facing the CFATF.

I therefore commend my Work Programme for 2010-2011 for your support.

Hon. Samuel Bulgin QC, JP

Chair