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Haiti - USA : Money laundering, Haiti targeted by State Department
06/03/2017 08:03:37

Haiti - USA : Money laundering, Haiti targeted by State Department
In Volume II, "Money Laundering and Financial Crime" of the report "2017 International Narcotics Control Strategy Report", the US Department of State indicates "Haitian criminal gangs are engaged in international drug trafficking and other criminal and fraudulent activity. While Haiti itself is not a major financial center, regional narcotics and money laundering enterprises utilize Haitian couriers, primarily via maritime routes. Much of the drug trafficking in Haiti, as well as the related money laundering, is connected to the United States. Important legislation was adopted over the past several years, in particular anti-corruption and AML laws, but the weakness of the Haitian judicial system leaves the country vulnerable to corruption and money laundering.

On June 8, 2016, the CFATF issued a public statement asking its members to consider the risks arising from the deficiencies in Haiti’s AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism ) regime. The statement follows CFATF’s acknowledgement that, although Haiti had made improvements in non-legislative areas, it had not made sufficient progress in fulfilling its action plan to address its serious AML deficiencies including legislative reforms. On November 9, 2016, the CFATF reaffirmed its stance, although noting Haiti’s recent progress and efforts to introduce new legislation, including a new law designed to grant administrative autonomy to the Central Financial Intelligence Information Unit (UCREF), Haiti’s FIU (Financial Intelligence Unit).

Most of the identified money laundering schemes involve significant amounts of U.S. currency held in financial institutions outside of Haiti or non-financial entities in Haiti, such as restaurants and other small businesses. Foreign currencies represent 63 percent of Haiti’s bank deposits as of October 2016. A great majority of property confiscations to date have involved significant drug traffickers convicted in the United States [...]

Haiti has seven operational FTZs. There are also 157 licensed casinos and many other unlicensed casinos. Online gaming is illegal.

The AML legislation passed in 2013 was further strengthened by amendments in 2016. In 2014, the Executive signed a long-delayed anti-corruption bill. Banks and financial companies, wire transfer agencies, credit unions, insurance companies, cooperatives, casinos, lawyers, accountants, notaries, and real estate agents must comply with KYC rules and report suspicious transactions to the UCREF.

Haiti is a member of the CFATF, a FATF-style regional body.

The weakness of the Haitian judicial system and prosecutorial mechanisms as well as judges’ and prosecutors’ lack of knowledge of the recently adopted legislative amendments continue to leave the country vulnerable to corruption and money laundering. Haiti is not a member of the Egmont Group, but is currently applying for membership.

The government remains hampered by ineffective and outdated criminal codes and criminal procedural codes, and by the inability or unwillingness of judges and courts to address cases referred for prosecution. Draft criminal codes and criminal procedural codes that would address these deficiencies are expected to be considered by parliament over the next few months.

The government should continue to devote resources to building an effective AML regime, to include continued support to units charged with investigating financial crimes and the development of an information technology system. The 2013 AML/CFT law and its 2016 amendments, despite strengthening the regulatory framework to combat financial crimes, undermine the independence and effectiveness of Haiti’s FIU.

Haiti also should take steps to establish a program to identify and report the cross-border movement of currency and financial instruments. Casinos and other forms of gaming should be better regulated and monitored. The Government of Haiti should take steps to combat pervasive corruption at all levels of Haitian government and commerce.

The Government of Haiti continues to take steps, such as training staff and coordinating with the nation’s banks, to implement a better AML regime. In September 2016, the National Assembly added missing elements to the 2013 AML/CFT law to bring it up to international standards, although deficiencies still remain. In order for Haiti to fully comply, however, the criminal code will have to be updated.

After years of delay, passage of the 2014 anti-corruption law constituted a positive step to try to address public corruption, but implementation issues remain. Frequent changes in leadership, fear of reprisal at the working level, rumored intervention from the Executive, and a lack of judicial follow-through (prosecutions) make implementation particularly difficult. Frequent changes in the judiciary also make it difficult for cases to be followed by prosecutors.

The UCREF has continued to build its internal capabilities and to do effective casework. The UCREF forwarded six cases to the judiciary in 2016. Continued issues in the judicial sector mean the UCREF’s progress is not yet reflected in conviction rates. Once a case is received, an investigating judge has two months from the arrest date to compile evidence, but there is no limit to the timeframe to schedule court dates, communicate with investigating agencies and prosecutors, and track financial data. There were no convictions or prosecutions for money laundering in 2016."

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