Raymond Campbell (left), partner at KPMG in Jamaica, greets Sven Stumbauer (centre), director at KPMG in Atlanta, and Charles Ross, managing director of Sterling Asset Management, at the local KPMG launch of its global anti-money laundering survey 2007, Knustford Court Hotel, November 23.-Contributed

For Jamaica to position itself as an offshore service centre, it must have a strong stance against the rinsing of money and demonstrate compliance with anti-money laundering laws, KPMG Caricom's head of Financial Advisory Services, Raymond Campbell, has suggested.

"We will not be an offshore service centre if our region is tainted," said Campbell, speaking in Kingston at the release of findings from a global anti-money laundering (AML) survey done by KPMG International.

"And, even if we do grow that business, it would not be to the size it potentially could be."

Campbell, who is a partner in KPMG Jamaica, also said that Jamaica will also have to lobby aggressively to take business away from other service centres.

He said the region was not as strong as it should be on anti-money laundering compliance and enforcement.

seeking recognition

"We need to be seen by the external market as being good on enforcement, so our regulators need to be seen as continuously keeping abreast of and in touch with best practices," he said.

Jamaica, he added, is viewed as a high-risk jurisdiction, with its high level of criminal and illicit drug activities.

With the proliferation of the man investment schemes in Jamaica recently, he says a key component of AML compliance is now for institutions to adhere to the 'Know Your Customer'(KYC) guidelines.

"You cannot be an efficient part of the legal and compliance network if you as a bank don't know your customers," Campbell said.

Regardless of who the customer is and the nature of the business, there is an obligation on the part of the banks to know the background of the people with whom they do business.

Internationally, the KYC principle is more broadly accepted and applied.

The KPMG survey found that 86 per cent of banks globally apply stricter KYC standards to high-risk customers, up from 81 per cent in 2004 when the survey was first conducted.

"To have a full enough understanding of what business the customer is involved in and to, therefore, understand and monitor the flow of money through customer accounts in their institution, banks must know their customers," Campbell stressed again.

While Campbell acknowledged that all, if not most, institutions may be submitting reports in accordance with the regulations, he says that weaknesses still exist in the system.

Of the 224 banks surveyed by KPMG, 85 per cent were found to have AML policies.

KPMG also found, however, that regulations needed to be better focused in order to tackle money laundering more effectively, while banks have demanded better information sharing and cooperation between the private and the public sectors.

sabrina.gordon@gleanerjm.com