Anti-money laundering (AML) refers to a set of procedures, laws or regulations designed to stop the practice of generating income through illegal action.Further, AML refers to the mechanisms which require financial and other regulated institutions to prevent, detect and report money laundering activities. These regulations seek to provide for the tracing of financial assets derived from illegal activity and for the imposition of appropriate sanctions against persons who seek to acquire, conceal, convert or transfer those assets.
Jamaica has one of the most robust AML legislations in the region, so much so that, it is now being used as a blueprint for similar legislations across the Caribbean. However, that still has not prevented Jamaican financial institutions from being impacted by the termination of correspondent banking relationships.
Over the past several months, many regional financial institutions have either been threatened by or lost their correspondent banking relationships with larger multi-national entities. At the heart of the issue is a fear that Anti-Money Laundering (AML) practices across the region have not been strong enough.
The Bank of Jamaica which regulates remittance companies and acts as the custodian of AML legislation in Jamaica ensures that the industry remains compliant. At the same time, the industry has also monitored its own AML progress, with in many instances, compliance functions being moved from one person to a multi-member department being involved in every aspect of the day-to- day operations.
Already, customers have felt the impact of AML requirements which oblige them to be able to account for the funds they are receiving and or sending and seek to ensure that the customer is well known to the business with which they are transacting.
Money laundering is a crime in virtually all jurisdictions across the world, and companies operating in the space have taken steps to address its prevention, detection, reporting and, ultimately, prosecution of perpetrators of this crime.
Over the next several years, it is expected that AML regulations will get even more stringent as financial institutions move towards a protectionist mentality and seek to cut off the funding to criminal enterprises.
It is wise for all of us as citizens, acting in our various capacities, to ensure that we fully grasp the impact that such international developments will have on Jamaica and our respective businesses and to do whatever it takes to prevent any action that could impede growth and development.