By Lloyd Williams, Senior Associate Editor
Ancillary staff at the Police Narcotics Division headquarters,
230 Spanish Town Road, Kingston, help unload more than 3,500 lb. of compressed
ganja found in two containers. The drug was seized earlier this year at Gordon
Cay. - File
THE UNITED States Government says that because the Jamaican Government does not yet require declarations of cross-border movements of currency or monetary instruments, criminals exploit this to move large amounts of cash through Jamaica.
This assessment is made in the International Narcotics Control Strategy Report 2003, published on March 1 by the US State Department's Bureau of International Narcotics Affairs.
According to INCSR 2003, because Jamaica is the foremost producer and exporter of marijuana (ganja) in the Caribbean, and also is a major transit country for cocaine flowing from South America to the United States and other international destinations, traffickers seek to legitimise the profits from those illegal drug flows.
Jamaica is therefore a prime candidate for money laundering activities, although it is difficult to estimate the extent of money laundering that occurs here, the report states.
SCRUTINY
Jamaica's banking system, however, has been under intense scrutiny from regulators in the wake of several major banking scandals in the mid-to-late-1990s, making Jamaican financial instruments an unattractive mechanism for laundering money.
As a result, the report states, much of the proceeds from narcotics trafficking and other criminal activity, are used to acquire tangible assets such as real estate or luxury cars, while still more merely pass through Jamaica as cash shipments to South American countries.
"The GoJ (Government of Jamaica) does not yet require declarations of cross-border movements of currency or monetary instruments. Criminals exploit this weakness and move large amounts of cash through Jamaica - often in shipments totalling hundreds of thousands of US dollars. Even when cash couriers are caught, the absence of currency declaration requirement hampers police efforts to bring criminal charges against the couriers.
"Further complicating the picture are the hundreds of millions of US dollars in legitimate remittances sent home to Jamaica by the substantial Jamaican population overseas. Distinguishing between legal transfers and illegal flows is no easy task," INCSR 2003 states.
FURTHER ACTION
The report suggests that further action is required in the area of asset forfeiture to permit the GoJ to take full advantage of this mechanism in its anti money laundering efforts. According to INCSR 2003, Jamaican law enforcement authorities are hampered by the fact that the country has no civil forfeiture law, and under the 1994 Drug Offences (Forfeiture of Proceeds) Act, a criminal drug-trafficking conviction is required as a prerequisite to forfeiture. "This often means that even when police discover illicit funds, the money cannot be seized or frozen and must be returned to the criminals," says the report.
However, it cited a case in 2002 when it said the GoJ creatively used income tax regulations to levy fines and penalties that resulted in the de facto forfeiture of a large amount of cash being smuggled out of the country.
(In recent times the police have been using the 51-year-old Unlawful Possession of Property Act to convict suspected drug couriers who are held with large sums of US dollars).
With regard to anti-terrorism financing, INCSR 2003 observes that Jamaica has not yet developed its final legislative response, although a comprehensive Anti-Terrorism Act is under consideration, with passage expected this year. As an interim measure, INCSR 2003 states, the Bank of Jamaica requires the banking sector to adopt the "Guidance Notes for Financial Institutions in Detecting Terrorist Financing" issued by the Financial Action Task Force (FATF) in April 2002.
It noted that Jamaica has signed, but not yet ratified, the UN Convention Against Transnational Organised Crime, which is not yet in force internationally.
PROGRESS
INCSR 2003 is of the view that the GoJ had made progress in fighting money laundering, but further work was necessary to bring its regime into line with international standards. "The GoJ should institute measures implementing the FATF's Eight Special Recommendations on Terrorist Financing," the report 2003 suggests. "Jamaica should enact legislation requiring declarations of large cross-border movements of currency in order to address the problem of cash couriers, as well as accompanying legislation allowing for asset seizure."
It recommended also that the scope of predicate offences for money laundering should be extended to encompass all serious crimes, adding that legislation doing so has been proposed but not yet enacted. It suggested also that serious thought should be given to returning the reporting threshold to US$10,000 as originally mandated. (It is now US$50,000). The GoJ should also ensure that the Financial Crimes Division has sufficient resources to identify and investigate money laundering activity adequately, it states.
