Chairman's Work Programme 2013-2014

INTRODUCTION


1.    The Government and people of the Commonwealth of The Bahamas accept the baton of leadership of the Caribbean Financial Action Task Force (CFATF), with pleasure, humility and a sense of pride at being accorded the honor for a second time, particularly as it occurs on the auspicious occasion of the twentieth anniversary of our distinguished organization.

2.    The CFATF is now at a very significant juncture which augurs well for the future. The Reform Agenda has been brought to a successful close and our organization has stronger institutional structures. For this we owe a debt of gratitude to all our former Chairmen who initiated, took us along, and completed the journey of reform. The Secretariat staff and our Members are fully involved in the work of the FATF and we continue to enjoy harmonious relations with our COSUN colleagues, the FATF Secretariat and our longstanding partners in the international donor community.

3.    So here we all are, confidently poised, with enthusiasm and a sense of purpose, to pursue the challenge from our Council of Ministers, which demands a continuous search for organizational improvements wherever possible. Ours is indeed a stable organization of which we should be proud.

4.    As we look towards the Fourth Round of Mutual Evaluations, our collective aspiration should be to achieve the Highest Levels of Compliance with the FATF Recommendations, a salutary goal, which can only occur if we are well positioned to engage actively with our international partners and to advocate for and serve the Caribbean Basin Region’s best interests in the global AML/CFT dialogue.
5.    Over the coming year the Commonwealth of The Bahamas will pursue an agenda based on the following key principles which, with the continued cooperation and support of all CFATF stakeholders, will establish a strong Culture of Compliance regionally, as the foundation for the regional transformation and taking us to pioneer status within the global AML/CFT network. These are;

•    A well-resourced and robustly supported Secretariat, enjoying job security and implementing the CFATF’s agenda with confidence and innovation.

•    Financial strength and stability, through timely submission of annual contributions with, where possible, further in kind or extraordinary support for other areas of CFATF’s work.

•     Active engagement and participation in all aspects of this organization’s business by all Members, and here we include our Co-operating and Supporting Nations and Observer Organizations, with whom dialogue, sharing experiences and support are essential.

•    Ensuring through the CFATF ICRG and the Follow up process, that all AML/CFT deficiencies, strategic and otherwise, outstanding from the Third Round of Mutual Evaluations are addressed. Plenary should give consideration to those countries that were assessed late in the third round, mainly Curacao and St. Maarten, which should only apply to those countries that are outside the FATF and CFATF ICRG processes.  

•    Widespread education and training for both the public and private sectors on the tool kit for the Fourth Round Mutual Evaluation Programme, namely the FATF 2012 Recommendations and Interpretative Notes, the Methodology and the Mutual Evaluation Process and Procedures and critically, in undertaking National Risk Assessments.

•     Continuing the CFATF Typologies Programme and participating in the global dialogue on the possible new approaches to undertaking typologies projects in a global rather than a regional context;

•    Commencing work on Financial Inclusion and Financial Literacy.

•    Finally

•    The use of Information Technology systems to undertake our growing workload in a timely, cost effective and efficient fashion

THE SECRETARIAT


6.    On behalf of the entire CFATF family we must extend our deepest appreciation to the Government of Trinidad and Tobago for the ongoing support provided at considerable cost to host the Secretariat. Particularly at the critical juncture  where expanded facilities are required given the growing workload and increases in the staff complement.

7.    Additionally, to demonstrate our solidarity with Trinidad and Tobago and our commitment to a strong and effective CFATF it is important for Members to realize that undertaking the work of the CFATF successfully, depends significantly on the provision of the necessary resources for both the operations of the Secretariat and the delivery of Technical Assistance and Training.

8.    With regard to the delivery of Technical Assistance and Training, South-South cooperation using the knowledge and expertise that is available within the membership is an underutilized resource which should be and could be drawn upon more effectively through full participation in the Donors’ Forum. Within this framework we can also rely on the ongoing friendship and support of the Group of Cooperating and Supporting Nations (COSUNs) who have made very valuable contributions to the successes of the CFATF over the years.             

9.    For the operations of Secretariat which is critical, we call upon all Members to ensure that annual contributions are paid in a timely fashion and to consider assigning an official(s) to work with the Secretariat from home base on an ongoing basis or for a limited period of time, or should resources allow, to physically second experts to the Secretariat. Such support, in addition to assisting with the considerable work load that is before us for the Fourth Round of Mutual Evaluations, will also allow the nominating country to build capacity through knowledge and exposure to the operations of the Secretariat and the Mutual Evaluation process.

10.    Finally, it must be underscored that the expertise and experience of the Secretariat staff continue to serve the best interests of this organization and therefore should be appropriately recognized. It is incumbent upon all of us to do everything in our power to ensure that their dedication and loyalty should be rewarded with long term job security including adequate pension arrangements.

11.    Yes, the global economic and financial crisis continue to affect our fragile economies. We have rightfully and effectively pursued cost cutting austerity measures, which have reached the limit of available possibilities.  We must heed the call of Madame Chair de Lannooy at the May 2010 Plenary Meeting and  Special Ministerial II in August 2011  to guard against the erosion of the Reserve Fund and to explore other methods of increasing revenues which are available and which we must consider.     

FINANCIAL STABILITY


12.    The CFATF acknowledges that the global economic and financial crisis continues to impinge negatively on the level of resources that assessor bodies in the global AML/CFT network could call upon from their membership to meet day to day operational costs and indeed to draw upon from donor countries and agencies, in order to deliver the full range of technical assistance and training projects that will be necessary given the resource intensive requirements of the Fourth Round of Assessments.

13.    Yet, it is the primary responsibility of all CFATF Members to ensure that the annual contributions which fund the organization’s work are submitted to the Secretariat as they fall due and that there is no build-up of arrears at the end of each year.

14.    It should be noted that the CFATF has had considerable success in this regard during 2011and 2012 and in keeping with the Ministerial mandate we must strive to secure even greater success in every aspect of the CFATF’s operations during the next twelve months. Where possible, Members are encouraged to make Extraordinary Contributions over and above the annual contributions. It must however be emphasized that these are completely voluntary.  

15.    It must be noted that the CFATF has pursued valiant and commendable efforts at cost cutting measures with a view to reducing operational expenses.

16.    However, given the growing workload of the global AML/CFT network, austerity measures on their own, will not facilitate the ultimate goal of attaining the highest levels of compliance by the end of the Fourth Round of Assessments, which as is widely recognized, and which we must again emphasize, will be very resource intensive.

17.    Since 2000, the Secretariat proposed and Ministers agreed to the CFATF pursuing a programme of AML/CFT training for the private sector and this remit has been undertaken with enthusiasm and the results have positively impacted the CFATF’s financial position.

18.    The ability of Members to attain the highest levels of compliance with the FATF standards during the Fourth Round pivots on the full engagement of all national stakeholders including the private sector.

19.    As is recognized in the Objectives of the Russian Presidency during FATF XXV, since “Financial institutions and other private businesses are in the frontline in detecting money laundering and the financing of terrorism. It is very important that they are well informed about current rules and efficient methods to detect and report suspicious transactions and to conduct risk assessments”.

20.    The Commonwealth of The Bahamas therefore calls upon all CFATF Members to fully engage with the Secretariat so that the rich potential for generating revenue for the CFATF through the delivery of Compliance Conferences and sector specific AML/CFT training seminars and workshops could be vigorously pursued in the next twelve months and beyond.

21.    Based on past performance, this is a viable mechanism that would facilitate the long term financial stability of our organization without placing additional financial burdens on the membership at this critical time.

MEMBERSHIP PARTICIPATION AND COOPERATION


22.    Following extensive discussions  at the Nicaragua Plenary meeting there was  an outpouring of volunteers to participate in the various CFATF Working Groups and it is anticipated that this positive attitude will translate consistently into active involvement not only in the CFATF context but also in FATF and other AML/CFT fora.

23.    The friendship and financial support of the COSUNs as well as from our other partners in the international donor community, have been and will continue to be of significant importance to the success of the CFATF. We will continue to work with them during the preparations for and throughout the Fourth Round so that the wider goal of protecting the international financial system can be achieved.

24.    Membership participation can also extend to assisting the Secretariat with disseminating pertinent information on the CFATF, such as this Work Programme on a rolling basis, nationally, regionally and internationally, utilizing the national communications departments and global public relations arrangements where applicable so as to avoid directly impacting the annual budget and annual membership contributions.  

RECTIFYING THIRD ROUND DEFICIENCIES AND PREPARING FOR THE FOURTH ROUND OF MUTUAL EVALUATIONS


25.    The Third Round of Mutual Evaluations has been brought to a close and it is here that we must accept that further work has to be urgently undertaken.  At the end of the Third Round of Mutual Evaluations there is good news through the favorable accomplishments of some Members. In these jurisdictions, our Centers of Excellence, the Culture of Compliance is strong, the levels of compliance with the FATF Recommendations are high and can be emulated by other CFATF members.


26.    However, institutionally, the average level of compliance by the CFATF membership was a less than satisfactory forty (40) percent. The CFATF ICRG is recognized by our international partners as an effective vehicle to encourage and persuade expeditious AML/CFT reform and must continue its robust and successful approach.

27.    I trust that Members will unanimously agree that the CFATF must strive for and attain the highest levels of compliance with the FATF Standards at the end of the Fourth Round and thereby erase the memory of a less than stellar performance at the close of the Third Round.

28.    It is therefore advisable that all CFATF Members cooperate with the CFATF ICRG, so as not to detract from the international standing of the CFATF as a whole. Members must ensure that all Third Round deficiencies are expeditiously rectified before the commencement of the Fourth Round.

29.    Failure to start with a clean slate may make preparations for the Fourth Round that more burdensome, because it is accepted that the Fourth Round will require the commitment of a significant amount of resources given the emphasis that will be placed on assessing effectiveness.

30.    The Fourth Round also requires a full understanding of the relevant requirements by all CFATF stakeholders and this can only be achieved through an ongoing and ambitious training programme for the Secretariat staff, the public and private sectors and   Examiners.

31.    Our collective goal must be to attain at least seventy five (75) percent compliance . In order to get there we must continue with our partnership with the FATF Secretariat, the COSUNs, IMF, World Bank and all our other regional and international friends and allies in a concerted programme of activities over the next year.

32.    Striving for and attaining this target is in the long term economic security interests of the Caribbean Basin Region. It is critical to the ability of our Members to attract and maintain Foreign Direct Investment, to generate revenues for governments through receipts from corporation and personal taxation, to maintain high levels of employment so that consumer spending is high which in turn will keep the national and regional economies buoyant, thereby ensuring high standards of living for citizens and importantly to maintain regional peace and security.

33.    We have a considerable amount of work ahead of us, but we should not be daunted by the task. Each and every one of us must constantly advocate this message and use our influence to secure the full and active involvement of all relevant regional institutions to this cause.

THE CFATF TYPOLOGIES PROGRAMME


34.    On the issue of Typologies, the outcome of the June 2013 FATF Plenary meeting indicates that  new approaches are being explored which  could entail a greater focus on methods/techniques rather than predicate offences, the possibility of conducting a stock-taking of prominent ML/TF cases on the global level and having strategic analysis and  discussion of those cases, the provision of general guidance on conducting typologies work, the need for further coordination in order to have more global participation in typologies projects rather than several regional projects and developing criteria for joint typologies projects.

35.    It is important for the CFATF whilst pursuing existing Typologies work, to participate in this global dialogue through the presence of the relevant officials from the membership as well as Secretariat staff so as to inform future CFATF work in this area.     

FINANCIAL INCLUSION


36.    Her Majesty Queen Maxima of the Netherlands and the United Nations Secretary General’s Special Advocate for Inclusive Finance for Development attended the FATF June 2013 Plenary Meeting in order to speak with and engage the FATF on her work. Her central message is that financial inclusion enables and accelerates progress towards numerous national priorities such as job creation, equitable growth, poverty alleviation, health education, food security and more.

37.    Financial Inclusion and effective and proportionate AML/CFT regimes are mutually reinforcing objectives and as such will remain an important facet of FATF  work for the foreseeable future.

38.    In some countries of the Caribbean Basin Region, the advent of mobile payments is  facilitative of financial transactions between the public service, vulnerable citizens and inaccessible rural communities. However, there are associated risks and the FATF Guidance on A Risk Based Approach to Prepaid Cards, Mobile Payments and Internet based Payment Services is a useful in terms of mitigating the AML/CFT risks and reinforcing the need for financial literacy for some sections of the population    

39.    The CFATF has not undertaken any work in this area. However, in order to assist CFATF members where Financial Inclusion and Financial Literacy are important to the national economy, and to determine the AML/CFT risks and guard against the vulnerabilities, the CFATF, during the next twelve months, should consider whether this work can be taken forward as part of the CFATF WGTYP agenda or whether a new Working Group to concentrate solely on this issue should be formed.   

INFORMATION TECHNOLOGY


40.    Building on the positive responses from the membership on the improvements to the CFATF Website, the Document Distribution System and the Knowledge Platform for the Compliance Conferences, the Secretariat has begun work on a   new platform which when operationalized around mid-2014, will among other things, provide each CFATF Member with a unique space, where preparations for their respective Mutual Evaluation Mission could commence even where the scheduled date is in 2020 or 2021.

41.    Critical to the effective functioning of the system will be an official in each country that will be tasked to coordinate the flow of information from the country to the platform which will be managed from the innovative Information Technology Department at the CFATF Secretariat. This can be easily achieved in a cost effective fashion by assigning this portfolio to the designated authority or linking it to the coordinating mechanism that is required in FATF Recommendation 2 that is mandated to review national policies.

42.    It is anticipated that the use of Information Technology will allow the overall workload of the CFATF to be undertaken more efficiently and will see a significant reduction of the cost of each Mutual Evaluation Mission, the overall Mutual Evaluation Programme and the annual contribution of each CFATF Member.

CONCLUSION


43.    A new and exciting world beckons the CFATF. I look forward  to working with Incoming Deputy Chair El Salvador in implementing this Work Programme which I commend for your consideration and endorsement.

Our Thanks and Appreciation for a Job Well Done: To Our Outgoing CFATF Chair Mr. Cherno Jallow

Mr. Cherno Jallow, CFATF Chair 2012-2013Mr. Cherno Jallow and the Virgin Islands (CFATF Chair 2012-2013) brought the CFATF to a new level, after helping the organization face and successfully complete its reform process. Following and exceeding its Work Programme, Mr Jallow led the way in many initiatives. Just to name a few, he strongly encouraged greater Member participation in CFATF Working Groups and general matters. He also contributed to the establishment of measures and mechanisms to ensure the timely payment of contributions. He was also key in promoting the organization of CFATF Compliance Conferences, that above all, serve an educational and sensitization purpose. It was also because of his leadership, that the CFATF engaged in dialogue with financial institutions, international organizations, and other FATF Style Regional Bodies, to strenghten relationships and cooperation.

For his commitment and work towards a top of the class CFATF, we are in debt.

  CFATF Outgoing Chair Address a the XXXVIII Plenary in The Bahamas, and Remarks at End of Chairmanship

  REMARKS BY MR. CHERNO S JALLOW, QC ON THE CONCLUSION OF THE VIRGIN ISLANDS’ CHAIRMANSHIP OF THE CARIBBEAN FINANCIAL ACTION TASK FORCE (CFATF) FOR THE PERIOD 2012/2013

Address by The Honourable Allyson Maynard Gibson Incoming CFATF Chair 2013-2014

Senator the Honourable Allyson Maynard Gibson Attorney General, Commonwealth of The BahamasOutgoing Chairman Cherno S Jallow, FATF President Vladimir Nechaev, Ministers of Governments of CFATF Member countries, Ladies and Gentlemen, it is a special honour for the Government and people of the Commonwealth of The Bahamas to accept the baton of leadership of the Caribbean Financial Action Task Force (CFATF), for a second time and we do so with pleasure, humility and a sense of pride particularly as it occurs on the auspicious occasion of the twentieth anniversary of our distinguished organization.

The CFATF is now at a very significant juncture which augurs well for the future. The Reform Agenda has been brought to a successful close with stronger organizational structures and our Council of Ministers has issued a continuous challenge to sustain the search for improvements wherever possible. For this we owe a debt of gratitude to Chairman Jallow and all our former Chairmen who initiated, took us along and completed the journey of reform.

Over the coming year the Commonwealth of The Bahamas will pursue an agenda based on the following Eleven Point Action Plan which, with the continued cooperation and support of all CFATF stakeholders, will establish regionally a strong Culture of Compliance and take CFATF to pioneer status within the global AML/CFT network.

These are:

1. Enhanced collaboration, communication and cooperation between CFATF and Ministers responsible for relations with CFATF so as to better serve the needs of each country including a successful Fourth Round of Mutual Evaluations (the target being a level of compliance of at least seventy-five (75) per cent at the end of the Fourth Round of Assessments in 2022).

2. Encouraging member states to host an Annual Regional AML/CFT Conference to include public and private sector to share and exchange developments in financial services; including the creation of a regional pool of experts and sharing of resources (The Bahamas will host the first regional annual conference).

3. Encouraging attendance of Regional Institutions at CFATF Plenaries and CFATF attendance at Regional Institutions meetings.

4. Ensuring financial strength and stability, including through timely submission of annual contributions and in kind or extraordinary support for other areas of CFATF’s work.

5. Developing continuously a well-resourced and robustly supported Secretariat so as to implement CFATF’s agenda with efficiency, confidence and innovation.

6. Enhancing the engagement, participation and support of all Members, Donors, COSUNs and Observer Organizations.

7. Ensuring through the CFATF ICRG and the Follow Up process, that AML/CFT deficiencies outstanding from the Third Round of Mutual Evaluations are addressed.

8. Promoting widespread education and training for both the public and private sectors on the tool kit for the Fourth Round Mutual Evaluation Programme, namely the FATF 2012 Recommendations and Interpretative Notes, the Methodology and the Mutual Evaluation Process and Procedures and critically, in undertaking National Risk Assessments.

9. Promoting a concerted programme of Technical Assistance and Training geared towards strengthening regional capacity to address the rigorous demands of the Fourth Round of Mutual Evaluations.

10. Continuing the CFATF Typologies Programme and participating in the global dialogue on the possible new approaches, especially use of technology, to undertake typologies projects in a global rather than a regional context.

11. Commencing Regional work on Financial Inclusion and Financial Literacy.

On behalf of the entire CFATF family we extend our deepest appreciation to the Government of Trinidad and Tobago for the ongoing support, provided at considerable cost, to host the Secretariat, particularly at the new, expanded and fully resourced premises. We encourage all members to donate works of art so that the spacious premises can reflect the CFATF family and our diverse and rich cultures.

I would like to emphasize that the effective operations of the Secretariat is critical! Therefore, I call upon all Members to ensure that annual contributions are paid in a timely fashion and to consider assigning officials to work with the Secretariat from home base on an ongoing basis or for a limited period of time, or should resources allow, to physically second experts to the Secretariat. Such support, in addition to assisting with the considerable work load that is before us for the Fourth Round of Mutual Evaluations, will also allow the nominating country to build capacity through knowledge and exposure to the operations of the Secretariat and the Mutual Evaluation process.

I take this opportunity to underscore that the expertise and experience of the Secretariat staff continue to serve the best interests of this organization and must be recognized. I thank the Human Resources Committee and the Steering Group for the work that they have done that will enable us before the end of this year to implement new systems for job security and compensation including adequate pension arrangements.

It is incumbent upon persons at Ministerial and Attorney General levels to engage our respective political directorates on the fundamental importance of the work of CFATF to the financial sectors of our countries. The Fourth Round of Mutual Evaluations is so important that it should be an Agenda item at Regional Heads of Government meetings and at the meetings of Regional Institutions. Such awareness and follow up will enhance the likelihood of every CFATF member achieving the goal of at least seventy-five (75) per cent compliance at the end of the Fourth Round of Assessments in 2022.

You have just heard Roger Hernandez, Financial Advisor at the Secretariat, describe the ongoing preparations for the Fourth Round of Assessments which will be the principal focus of the CFATF over the next twelve months and beyond.

An ambitious programme of Technical Assistance and Training (including IT training) is being devised in conjunction with our longstanding friends and allies in the donor community. These are critically important if we are to accomplish our goal of at least seventy-five (75) per cent compliance at the end of the Fourth Round of Assessments in 2022. Also to attain this goal, a bold step is being taken to use of cutting edge technology which would revolutionize the entire Mutual Evaluation process from the preparatory stage to the presentation of the Mutual Evaluation Report for discussion in Plenary.

Our innovative use of technology will enable the Country being assessed, the Secretariat, the team of Assessors, the COSUNs and Observer Organizations, as well as our team of translators, to all work on the same draft Mutual Evaluation Report as it proceeds to the final Report that will be discussed in Plenary. This is a C Change. Both Roger Hernandez and Eduardo Gamero will follow my address with a fascinating demonstration on how this will all work.

CFATF is no stranger to pioneering initiatives. It was in October 2002 as part of the Chairman’s Work Programme for 2002-2003, when the Commonwealth of The Bahamas first held the CFATF

Chair that the initial steps were taken towards the creation of a Compliance Officers Association of the Caribbean Basin Region, through the organizing of a Conference for Caribbean Basin Compliance Officers at the Atlantis Hotel.

The Caribbean Regional Compliance Association is now a reality, with national Compliance Associations operating in eight CFATF Members Countries with the Bahamas Compliance Officers Association (BACO) leading the way.

Another pioneering initiative occurred on Friday 18th October 2002 on the margins of the October 2002 Ministerial. Former CFATF Chairman Alfred Sears authorized exploratory steps for a mechanism to resolve difficulties being experienced due to the lack of prompt and effective responses to requests for judicial and regulatory co-operation. These steps were initially taken, through a meeting on International Co-operation Co-ordination, which was arranged between CFATF Members and some of their FATF counterparts.

That first step led, to a meeting on October 20th, 2003, to assess whether there was support to establish a regular Forum of FIU’s for CFATF member states. This week the CFATF held its seventeenth Heads of FIUs Forum and we recently learnt that EGMONT and the FATF are discussing the establishment of a similar Forum for FATF Members.

Also in 2003, with the approval of the Council of Ministers, CFATF launched the first Compliance Conference for fee paying participants principally from the private sector but also open to public sector officials. This was in keeping with the CFATF’s remit to build capacity in the region even though the commercial aspect was not the norm for the times. However, with the full support of Trinidad and Tobago, Barbados and Virgin Islands, these Compliance Conferences continue to be a source of considerable revenue for the CFATF. I encourage all Members to work with the Secretariat to arrange these Conferences on a regular basis over the next twelve month and beyond.

This weekend, after this meeting, there will be a COSUN sponsored workshop on anti-terrorism financing and confiscation and forfeiture of assets. Today, a workshop is being held in Nassau for over 60 people including investigators (including FIU), prosecutors and Magistrates.

This week, The Bahamas committed to next year hosting the first Annual Regional AML/CFT Conference. We believe that these annual conferences, to include the private sector will transform positively regional financial services. We look forward to the support of the FATF and all COSUNs and Donors in maximizing the outcome of each Annual Conference.

The CFATF is a well-respected and important organization whose work is critical to the economic well-being of all the countries in the Caribbean Basin Region. The CFATF ICRG is recognized by our international partners as an effective vehicle to encourage and persuade expeditious AML/CFT reform. The Secretariat staff and our Members are fully involved in the work of the FATF and we continue to enjoy harmonious relations with our COSUN colleagues, the FATF Secretariat and our longstanding partners in the international donor community. Ours is a stable organization of which we should all be proud.

It is with this rich future in mind, and working hand in hand with Deputy Chair Senor Luis Antonio Martinez Gonzales, Attorney General, El Salvador, we issue this call to all our Members, as well as our partners, to join us over the next twelve months to prepare the CFATF for the Fourth Round of Mutual Evaluations and to realize the full potential of our organization to serve the best interests of the Caribbean Basin Region.

Finally, please join me in thanking Chairman Jallow for working so assiduously to complete the Reform Agenda. And to thank The Bahamas’ organizing Committee and the Secretariat for organizing an excellent Plenary.

Thank you all for coming to this Plenary in The Bahamas and contributing so constructively to the future of CFATF.

I thank you.

Address by The Honourable Allyson Maynard Gibson Incoming CFATF Chair 2013-2014

Team CFATF says thank you to Richard Chalmers

Caribbean Financial Action Task Force TeamWithin FATF circles, Richard Chalmers is fondly known as Mr. Recommendation, and Team CFATF joined colleagues within the global Anti Money Laundering and Combating the Financing of Terrorism (AML/CFT) network in wishing him farewell and best wishes for the future on the occasion his final FATF Plenary Meeting as a member of the United Kingdom delegation in Paris last month.

Richard started attending FATF meetings some fifteen years ago to help bring some offshore expertise into the FATF Non Co-operative Countries and Territories (NCCT) exercise and worked with the Americas NCCT Review Group. Mr. Richard Chalmers is fondly known as Mr. Recommendation

About that time he also started attending CFATF Plenary and Ministerial meetings, representing the United Kingdom and over the years has attended most, but not quite all the CFATF meetings.

Later on he became involved with the chairing of Working Group on Evaluations and Implementation (WGEI)/Evaluations and Compliance Group (/ECG) in 2005, and also took on the chair of the Africa/Middle East Regional Review Group in 2009.

Richard has been intimately involved with the development of the FATF Recommendations and through his extensive knowledge and expertise he has contributed to the development of CFATF’s Mutual Evaluation process, through his participation in the discussions on CFATF Mutual Evaluation and Follow up Reports and participated in training workshops for CFATF Members on the FATF Recommendations and Methodology in Nicaragua and El Salvador during 2012 and 2013 respectively.Madam Chair Maynard Gibson and Team CFATF

Madam Chair Maynard Gibson and the rest of the CFATF family of nations, extend their thanks  to Richard for all his support for the CFATF over the years, wish him well on his retirement   and welcome his interest in working with the CFATF in the future.

Successful Reform of the Caribbean Financial Action Task Force

FATF President, Mr. Vladimir NechaevDear colleagues,
It is my great pleasure to be with you here today in Freeport for the 38th Plenary meeting of CFATF.
Since I arrived here on Tuesday morning I have experienced nothing but warm hospitality and I want to thank our hosts for the excellent assistance and facilities they are providing for this meeting.

Global network

FATF-style regional bodies such as CFATF are of the utmost importance to FATF. As some of you might know, prior to taking the FATF Presidency in July of this year, I was the Chairman of Moneyval, which is the FATF-style regional body covering member countries of the Council of Europe. I am therefore fully convinced of the crucial role which FSRBs play to support the implementation of the FATF Recommendations throughout the world, and of the challenges they meet. Having a strong global AML/CFT network is of utmost importance to our work, particularly since money laundering, terrorist financing, and the financing of proliferation are transnational activities. CFATF plays a very important role in that network and you are doing excellent work to foster implementation of the FATF standards here in the Caribbean region.

Successful completion of the reform process

It hasn’t always been this way. At the CFATF Council of Ministers meeting three years ago, the then FATF President had to share his concerns about the functioning of CFATF. I will not repeat the specific issues that he raised at the time. I would simply recall that these issues posed a fundamental threat to CFATF’s place in the global network of FATF and FATF-style regional bodies.

Since 2010, you have been working on what I would call the reinvention and transformation of CFATF.
At FATF we have been closely following your progress through monitoring reports and updates. The CFATF action plan counted no less than 54 items that needed to be addressed, and at the most recent FATF Plenary meeting in October 2013, FATF members agreed that CFATF had resolved all of its issues from the action plan and that no more updates to FATF were required.

Resolving the issues from the action plan is only half the story. CFATF has also made some additional institutional and organisational changes that should ensure that the reforms can last, and that should assist CFATF to successfully address future challenges.

Three years ago, my predecessor euphemistically remarked that there was a perception that CFATF did not compare as favourably as it should with other FATF-style regional bodies. At this meeting, I am able to state without a doubt that CAFTF should now be perceived as one the best in its class.

I congratulate you all for the results of the reform process. I want to thank and praise especially former Chair Attorney-General Samuel Bulgin from the Cayman Islands, former Chair Manuel Gonzalez from Venezuela, and current Chair Mr. Cherno Jallow from the Virgin Islands for the leadership they have shown.

Next round of assessments

Implementation is assessed through the mutual evaluation process, and this process gives the FATF Recommendations teeth. All countries in the global network will be assessed for compliance with the revised Recommendations. Earlier this year, the FATF adopted the Methodology for assessing technical and effective compliance with the FATF Recommendations, and at the last meeting we adopted the procedures for the assessments.

While previous assessments have focused more on technical compliance with FATF Standards, now we plan to focus much more on effectiveness – does the system work? Effectiveness will make assessments more challenging because judgments will need to be made on how various components of the AML/CFT regime interact. Assessments will also now focus more explicitly on the areas of higher risk. The reports will provide a basis upon which countries can address the issues that are most critical
for them.

Technical compliance is still a necessary component of any AML/CFT system, and we will also continue assessing each Recommendation in this way. Generally, the expectation is that during this round of assessments countries should have addressed their shortcomings and achieve better technical compliance ratings than last time.

ICRG Process

Some countries haven’t yet fully implemented the FATF Standards and that is a concern to FATF.
Where countries need assistance to implement the FATF Recommendations, they should get help, and FATF is very supportive of the work of technical assistance providers and coordinators.

Enhanced peer pressure is another tool that FATF has at its disposal. This tool is better known as the International Co-operation Review Process or ICRG. This work is visible through the publication of the lists of jurisdictions with significant strategic deficiencies in their AML/CFT systems. We note that many countries on those lists are gradually addressing these issues. As countries exit the list, we can use our resources to focus on the remaining countries with strategic deficiencies.

The FATF should be able to take into account the work that the CFATF is undertaking to increase the level of compliance of its members through the CFATF ICRG. The CFATF ICRG is a good example for other FATF-style regional bodies to follow. Here are some reasons why:

Illicit finance is a transnational crime and any AML/CFT system is only as strong as the weakest link in the region. Through judicious use of peer pressure, the CFATF ICRG working group allows CFATF countries to assist each other to implement the FATF Recommendations. In addition, the CFATF public statement, as issued in May 2013, is a public sign of commitment of CFATF to the outside world that AML/CFT is taken seriously in this region.

We support CFATF by publishing your statements on our website, and they are an important factor in our discussions to decide what countries the FATF could target. The level of political commitment of a country to enact compliant legislation is another factor that we take into account.

Global network

There are so many topics of interest that I could continue speaking for hours about FATF, CFATF and the work that we do. However, your agenda for today and tomorrow is packed with interesting and important topics and I should not take too much time.

I do however want to raise one last issue and that is the work that we are doing with FATF-style regional bodies. This work is carried out by the Global Network Coordination Group, the FATF working group that is co-chaired by your deputy Executive Director Dawne Spicer.

FATFs initiatives have an impact not only on members of FATF but also on members of FATF-style regional bodies. It is therefore important for all countries to participate in FATF work, either directly, or through regional working groups like the CFATF working group on FATF issues. All CFATF members can directly provide written comments on any FATF paper and they can also attend FATF meetings as part of the CFATF delegation. I noted the large number of CFATF delegates at our last
meeting in October in Paris. Please continue to do so. I think it is important for all countries to have first-hand knowledge of FATF’s work.

Over the coming period, we will discuss FATF governance issues. I hope that FATF-style regional bodies will share their best practices in this regard. We will also continue our policy work on beneficial ownership, on the risk based approach, and on effective supervision. The work plan of our risk, trends and methods working group, formerly known as the typologies working group, is packed with topics that are highly relevant and interesting to CFATF members.

An important effort over the long term will be to ensure quality and consistency of assessment reports.
All assessment bodies will continue undertaking assessments as we did in the third round but with an enhanced focus on ensuring the quality and consistency of reports. This important work will require extra resources from all of us.

Mr. Chairman, dear colleagues, let me conclude by thanking you once again for inviting me to your meeting and for the excellent hospitality that you provide to all delegates. I look forward to seeing many of you at future FATF meetings, and to continuing the close cooperation between our two bodies.

Thank you.