Mr. 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.

  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

Outgoing 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

Within 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.

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 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.

Dear 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.