Jamaican FID can't 'properly tackle' money laundering without POCA

TANEISHA LEWIS, Observer staff reporter
Saturday, December 16, 2006

THE Financial Investigation Division (FID) says although money laundering is a problem in Jamaica, it cannot adequately tackle the problem until the Proceeds of Crime Act (POCA) is passed.

The Act is expected to be brought before the House of Parliament for debate next year.

Presently, people found guilty of money laundering are prosecuted under the Money Laundering Act (MLA) of 1998. However, the MLA will be repealed once the POCA is passed.

Within the current legislative network allegations of money laundering are investigated, but there is very little that can be done except for taxing the people, said Christine Chambers, chief technical director at the FID.

"Yes, [money laundering is a big problem in Jamaica], but until the POCA is enacted, we cannot properly tackle the problem," Chambers said.

"The offences are mainly fraud and larceny. If there is a nexus with a drug-related offence, the person is charged and these are before the court," she added.

Currently, there are five money-laundering cases before the courts. In Jamaica, money laundering is conducted under the guise of real estate purchases, construction, used car dealership, trade, extortion and smuggling.

Last year, only seven cases of money laundering were actually brought before the courts for a ruling since 2001. In fact, there have only been only two convictions for money laundering since the establishment of the Financial Investigation Division (FID) in the police force in 2002.

According to the FID, so far this year eight people have been convicted of breaches of the Money Laundering Act, compared to five people last year. But Chambers explained that even though the numbers are small, the eight convicted people were responsible for 20 counts of money laundering.

Currently, the Money Laundering Act requires record keeping and reporting for financial institutions on all currency transactions over US$10,000. Exchange bureaus, or cambios, have a reporting threshold of US$50,000.

Between January and September of this year, the FID received 18,311 suspicious transaction reports (STR), 46,765 threshold transaction reports (TTR) and 30 cash transaction reports. Compared to last year, there was a significant increase in the number of STRs by 2164.

However, the number of TTRs decreased from 52,310. CTRs also saw a significant dip from 114. In 2004, 49,754 money-laundering reports on transactions regarded as being on the threshold by financial institutions were filed, but only 12 of the 231 cases deemed suspicious were investigated for money laundering.

A person commits a money-laundering offence if he or she engages in a transaction that involves criminal property; conceals, disguises disposes of or brings into Jamaica any such property or converts transfers or removes any such property from Jamaica.

Provisions pertaining to money laundering will be included in the POCA, which states that it is illegal to engage in a transaction involving criminal property. Criminal property is referred to as property which is a benefit from criminal conduct.

Chas Roy-Chowdhury, head of taxation at the Association for Chartered Certified Accountants, recently noted at an anti-money-laundering seminar that worldwide, money laundering could amount to between two and five per cent of the global GDP, which is approximately $590 billion to $1.5 trillion.

He said possible warning signs for money-laundering activity include:

. Unusually large deposits of cash made by an individual or company whose affairs would normally generate deposits by cheque or banker's draft.

. Substantial increases in cash deposits without apparent cause

. Customers depositing large numbers of smaller cash amounts which together make up a substantial sum

. Reluctance by a customer to provide routine information when opening an account; providing information which is difficult or expensive to verify

. Large withdrawals from a hitherto dormant/inactive account.


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