Curaçao’s AML/CFT/CFP Strategy and Action Plan addresses the findings of its money laundering and terrorist financing national risk assessments. It inciudes a detailed Action Plan, as per the World Bank Action Plan module, based on the NRAs recommendations and the Government’s strategic direction considering priorities and objectives in addressing not only the NRAs findings but also Curaçao’s continuous actions in the fight against money laundering and terrorism financing. The objective of the strategy and action plan is to combat money laundering and counter the financing of terrorism while enhancing compliance with the FATF standards. The Government of Curaçao is committed to continually improve its understanding of money laundering (ML) and Terrorist Financing (TF) and Proliferation Financing (PF) risk in Curaçao by strengthening Curaçao’s AML/CFT/CFP framework and developing policies and strategies to effectively mitigate the risks.

1. Background

1.1. AML/CFT/CFP policies of Curaçao

Since the latest assessment of Curaçao by the Caribbean Financial Action Task Force in 2012, several policy initiatives and actions have been taken and are reflected in the S Follow Up Reports that have been published since then.

Important steps that were taken include the development of a National Risk Assessment (NRA) that was published beginning 2023 (the first NRA), subsequent NP.As to identify the risks related to the financing of terrorism and the risks related to Non-Profit Organizations.

The NRAs have been serious efforts of Curaçao to identify, assess and understand its ML and TF risks and mitigate and act on those risks as is required by the Financial Action Task Force.

The first NRA is a valuable document while based on serious cooperation between all important stakeholders it demonstrates AML/CFT efforts of Curaçao and analysis of the information as available. An important feature of the first NRA is the identification of crucial recommendations directly linked to existing threats and vulnerabilities. The first NRA is also frank in its limitations. The national risk assessment was carried out from 2018 to 2021. The report was then published in 2023. In this respect, it should be noted that the general statistical period of the NRA covered 2012—2017, while the data cover up to 2022 for specific sectors and activities. Where statistics were available information has been used up until end of 2020, in other cases until end of 2017. It is also good to note that further risk assessment work is (and has been) done in the following areas:

• risk assessment of types of legal persons & legal arrangements (ongoing);
• risk assessment of Virtual Assets Service Providers.
• risk assessment of securities intermediaries and asset managers (ongoing).
• risk assessment financial inclusion.

More in-depth risk assessments for Casino’s (land based, online) and Lotteries have been developed already.

1.2. Basics of the AML/CFT/CFP Strategy and Action Plan

As mentioned before the AML/CFT/CFP Strategy and Action Plan together constitute one and the same document. In the annexed Action Plan key actions were further developed by:

• identifying the primary/secondary agency that is responsible for the action.
• a further break down in detailed actions where needed.
• remarks, implementation issues and/or overlap and synergies with other actions.
• identified timeframe for accomplishment.

In addition, the annexed table also makes a division in High Priority Actions, Medium Priority Actions, Quick Wins and Other Actions.

While Curaçao has used the World Bank methodology for the NRA, their Action Plan module was used as a guidance to develop the annexed Action Plan.

 

1. AML/CFT/CFP National Strategy

A) Strengthen Border Controls

This aspect of the national strategy includes both the physical controls and the control of transactions c.q. money flows. Given the risk and context of Curaçao mainly its geographical position the strengthening of its Border Controls is important and in line with the findings and recommendations of the first NRA related to the money laundering (ML) threat predicate offences. The fight against crimes that constitute ML predicate offences is essential to combat money laundering.

Al) Develop national policies to strengthen Border Controls
A2) Enhance national and international cooperation to strengthen Border Controls As mentioned, the strengthening of border controls includes also financial transactions and money flows.
A3) Develop policies for close monitoring of international transactions and money flows to detect possible breaches of AML/CFT/CFP Requirements.

 

B) Enhance AML/CFT Supervision of High-Risk Sectors in accordance with the first NRA Report.

B1) Banking

• enhanced guidance to banks to focus on analyzing and reporting subjective unusual transactions that require more investigation and more tailoring of the transaction monitoring system.
• Require banks to submit annual data on variables such as the volume and nature of the products provided, the transaction patterns, and the cross
  border nature of transactions to enable the CBCS to further enhance its risk assessment of banks.
• Include all requirements for financial groups to implement group-wide programs against ML/TF in accordance with the Interpretive Note to FATF Recommendation 18 in the provisions and guidelines.

B2) Money Transfer Companies

• Enhanced controls by MTCs to mitigate the risk of smurfing or structuring techniques.

B3) E-zone companies

• Adopt rules and regulations that protect legitimate international trade through E-zones against criminals use and guarantee the transparency and integrity of the E-zones;
• Evaluate whether the AML preventive measure and obligations, such as a reporting obligation, should be applicable to or introduced for all legal entities and appoint an AML/CFT supervisory authority for the legal entities operating in the E-zones that do not yet fail under the scope of the NOIS and the NORUT.
• Bring clarity as to whether an economic zone is considered a (national) border in the relevant legislation to determine if transactions concerning cash entering or exiting an E-zone are considered cross-border transportation and should be reported to the FIU (government). Reevaluate the entry controls and the due diligence procedures for entities that wish to establish themselves at the E-zone and monitor periodically whether entities operating in the E-zone still comply with the requirements after they have received their licenses (government).
• Enhance domestic cooperation and information exchange between agencies and investigative authorities to improve oversight and enforcement and ultimately disrupt illicit trade and associated crimes and develop basic protocols for information sharing between E-zone administrators and the national authorities responsible for regulation (government and LEAs).
• Strengthen cooperation and information exchange between the FIU Analysis Department, the Customs Authority, and where necessary the Tax Authority to improve monitoring of the good and cash flows in the E zones to identify potential anomalies indicative of Trade-Based Money Laundering (TBML) or other possible predicate offences (FIU and stakeholders).
• Implement measures for identification and control of the transboundary movement of cash and negotiable instruments related to activities in those areas (government and supervisory authorities).
• Provide transparency with regard to the flow of goods and money in and out of the E-zone by increasing the number of administrative examinations and controls by the Customs Authority and the Tax Authority/Tax Audit Department (government).
• Provide training for all stakeholders to create more awareness of money laundering, especially TBML, and of counterfeiting (supervisory authorities and stakeholders).
• Issue guidelines on warning signs and typologies for legal entities operating in the economic zone, as well as other reporting institutions and stakeholders (supervisory authorities).
• Strengthen the monitoring of this sector by banks under the supervision of the CBCS, as well as by gatekeepers like accountants, tax consultants, and administrative offices under the supervision 0f the FIU and stimulate them to report unusual transactions (CBCS and FIU).

B4) Land-based Casino

• Amend the current AML/CFT Minimum International Standards (MICS), and issue guidelines to meet the need, for more specific guidelines and monitoring in the sector.
• Ensure the GCB can dispose of sufficient resources in order to perform its tasks effectively.

B5) Online Gaming Sector

• Clarify the definition of gambling services in the NOIS and the NORUT by adding ‘direct or indirect’ to the wording of the definition of the underlying service as the GCB has proposed to the AML/CFT/CFP Committee.
• Incorporate the necessary enforcement tools in the online gambling legislation to enable effective supervision of the sector.
• Prohibit the issuance of sub-sub-licenses and void the existing unknown licenses via legislation.
• Introduce a comprehensive and AML-compliant licensing mechanism for all service providers in this sector.
• Issue guidelines and best practices on how to perform proper CIP/CDD/EDD in the online gambling space and take all necessary measures to banish anonymity within this sector and train AML professionals.
• Provide clearer insight into the number of active (master-) licensees and keep proper and readily accessible documentation on the licensing process.
• Find a structural solution for the de-risking dilemma posed by the fact that the de-risking of the online gambling industry by local banking institutions in 2006 has resulted in significant amounts of money flowing through this industry with little visibility.
• Take all necessary measures to gain insight in the cash flows related to this sector until re-risking by local banks is realized.

B6) Lotteries

• Install a committee consisting, among others, of representatives of TIO, the GCB, the FIU, and the Department of Legislation & Legal affairs (WJZ) to revise the various Iaws governing the gambling sector as they are outdated and hinder law enforcement agencies and supervisory authorities. For instance, amend the National Lottery Ordinance 1909 to include effective entry controls that help to reduce money-laundering vulnerabilities and ensure a higher level of compliance with AML requirements.

 

C) Monitoring of NPOs and Counter financing of terrorism

Monitoring of the NPO sector mitigates the risk of the sector of being misused for the financing of terrorism. Considering international emerging TF threats Curaçao deems it important to develop the required regulatory framework and policies to protect the NPO sector from being misused and to mitigate its TF risks.

C1) The development of a regulatory framework for the NPO Sector to ensure transparency, reporting standards, oversight, and compliance monitoring.

C2) Develop National Policies to:

• enhance the monitoring of international terrorist threats, including convicted terrorists’ post- detention, through international cooperation at multilateral and bilateral levels. A terrorist threat elsewhere can also have repercussions on the Kingdom. Efforts will continue in the coming years within existing multilateral forums, such as the EU, UN, Anti-ISIS Coalition, NATO, and the Global Counterterrorism Forum, and cooperation in the Caribbean region.
• to Strengthen local capacities to prevent and combat terrorism (financing).
• to enhance national and international cooperation to combat terrorist financing with special focus on developing strategies, coordination and analysis of emerging TF risks.

 

D) Confiscation / Taking away criminal assets

Implementation of the NRAs plan of action requires deployment of additional financial resources. Given Curaçao’s limited resources, effectiveness in confiscation would provide an important (financial) boost in the fight against money laundering, terrorist financing and proliferation. Confiscation is an important aspect of an effective anti-money laundering and counter-terrorist financing regime. Confiscation prevents criminal property from being laundered or reinvested either to facilitate other forms of crime or to conceal illicit proceeds. Curaçao acknowledges the importance of confiscation and considers It therefore an important element in its National Strategy.

D1) Develop National Policy to:

• enhance the confiscation of criminal proceeds;
• increase the value of criminal proceeds confiscated;
• enhance capabilities e.g. structured courses and workshops on asset seizure and various forms of confiscation.

 

E) Financial Inclusion

Ensuring that financially excluded or underserved groups have access to regulated financial services helps to strengthen the implementation of AML/CFT/CFP measures. The development of the required regulatory framework for financial inclusion will contribute to the AML/CFT/CFP compliance by sectors and individuals initially not falling under the scope of the NOIS and NORUT. Financial inclusion makes it possible to have an overview of all financial transactions including those of the informal economy and is therefore, considering the results of the first NRA prioritized.

E1) Develop regulatory framework for financial inclusion.

 

3. Conclusion

The detailed key actions derived from the NRAs findings are the fundamentals for the Action Plan in the Annex which gives a specific overview of the status of the implementation of the key actions during 2024 and 2025 and is based on in depth analysis of the Curacao authorities.

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