ARUBA LEGISLATION AGAINST MONEY-LAUNDERING
The government continues to improve the system
Since the Financial Action Task Force (FATF) evaluation in 1995, Aruba has passed new legislation and undertaken a number of other measures aimed at strengthening its anti-money laundering system. In February 1996, the Reporting Ordinance and the Identification Ordinance came into effect. Following the passage of these measures, the government has sought to address concerns relating to the casino and gambling industry, the use of legal entities, the import and export of cash and the Aruba Free Zone. Reports were prepared, which make recommendations for strengthening the anti-money laundering measures in these sectors, and the necessary legislation has been drafted and is being discussed. These reports contain many valuable and innovative proposals, including improved licensing and supervision obligations, the introduction of KYC-policies, and the implementation in the non-financial sector of other mechanisms to prevent money laundering, and will considerably strengthen the anti-money laundering regime, once implemented.
The penal provisions are generally broad in scope. The money laundering offence applies to all crimes, extends to cases where the defendant should reasonably have suspected that the money was from the proceeds of the crime, and has penalties that should provide a significant disincentive. However there are two major weaknesses. First, proof of the specific predicate offence underlying the money laundering is required, which may be very difficult in many cases. Second, the offences restrict the property which can be laundered to money, securities and claims, thus excluding real or other personal property, which will cut down on the effectiveness of the offences.
The legislation dealing with confiscation appears to be broad and potentially very effective, and the issue is the practical application of the legislation. New legislation has also been introduced to substantially increase the possibilities for international mutual legal assistance.
In the financial sector, the Identification and Reporting Ordinances, combined with the Central Bank of Aruba (‘Centrale Bank van Aruba’) Directive, have provided a very sound structural basis for anti-money laundering measures in the banking sector. The unusual transaction reporting system is working reasonably successfully so far.
Internal control obligations and supervision for banks is mostly very sound. The active approach taken by Aruba has led to it being in substantial compliance with most of the FATF Forty Recommendations.
Karel Frielink
Attorney (Lawyer) / Partner
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Update 5 February 2009
Following the recommendations of the international organization Financial Action Task Force (FATF), Aruba joins the countries around the world that expand their anti money laundering and counter terrorism financing legislation to other sectors. This took effect by amending the State Ordinance MOT (AB 2009 no.14). As of February 5, 2009 the reporting obligation has been expanded to the following:
Independent Professionals:
Lawyers
Notaries
Accountants
Tax Advisors
Dealers in goods of high value:
Real Estate Agents
Dealers in vehicles
Dealers in boats and airplanes
Dealers in antiques and arts
Dealers in precious stones, presious metals and jewelry
The transactions that must be reported to the FIU are stated in the Ministrial Regulation for independent professionals (AB 2009 no.18) and in the Ministrial Regulation for dealers in goods of high value (AB 2009 no.19) .
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