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Caribbean Financial Action Task Force (CFATF)

The Caribbean Financial Action Task Force (CFATF) is a regional intergovernmental organization that works to implement and promote measures to combat money laundering (ML), terrorist financing (TF), and the financing of the proliferation of weapons of mass destruction within the Caribbean region.

Modeled after the Financial Action Task Force (FATF), CFATF serves as one of the FATF-Style Regional Bodies (FSRBs), ensuring that member states adhere to international anti-money laundering and counter-terrorism financing (AML/CFT) standards.

Established in 1990, CFATF brings together Caribbean states to strengthen regional cooperation and enhance compliance with global financial crime prevention frameworks.

The organization’s primary objective is to ensure that member jurisdictions adopt and enforce effective AML/CFT systems aligned with the FATF 40 Recommendations, thereby enhancing transparency, financial stability, and the integrity of regional economies.

Historical Background

The CFATF was created following the Kingston Declaration of November 1992, which was signed by Ministers from Caribbean and Latin American countries.

The declaration formalized the commitment of regional governments to implement FATF-aligned recommendations adapted for the Caribbean context.

CFATF’s work stems from earlier efforts led by the Caribbean Basin Initiative and Western Hemisphere Drug Elimination programs, both of which emphasized the link between drug trafficking, money laundering, and economic destabilization.

The organization was established to coordinate regional efforts in strengthening AML/CFT legislation, promoting regulatory consistency, and fostering intergovernmental cooperation.

Mandate & Objectives

The CFATF operates under a mandate to:

  • Adopt and Implement AML/CFT Standards: Promote the implementation of the FATF Recommendations across its member states.
  • Conduct Mutual Evaluations: Assess member jurisdictions for compliance and effectiveness in AML/CFT regimes.
  • Provide Technical Assistance: Offer training, capacity-building programs, and advisory support to strengthen institutional frameworks.
  • Facilitate International Cooperation: Promote information exchange and collaboration among regional law enforcement, financial intelligence units (FIUs), and supervisory authorities.
  • Coordinate Policy Development: Develop regional strategies to address emerging threats such as cyber-enabled laundering, digital currencies, and trade-based money laundering.

Structure & Membership

The CFATF’s membership consists of over 25 Caribbean and Central American jurisdictions, including:

Antigua and Barbuda, Bahamas, Barbados, Belize, Cayman Islands, Dominica, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, among others.

Its organizational structure includes:

  • Ministerial Council: The highest decision-making body, providing strategic oversight.
  • Council of Representatives: Comprising senior officials responsible for national AML/CFT coordination.
  • Secretariat: Based in Port of Spain, Trinidad and Tobago, responsible for day-to-day operations, technical assistance, and coordination of evaluations.

Mutual Evaluation Process

CFATF conducts mutual evaluations—comprehensive peer reviews that assess a member state’s compliance with FATF’s 40 Recommendations and the effectiveness of its AML/CFT regime.

Evaluations analyze both technical compliance (existence of laws and regulations) and effectiveness (implementation and results).

Following an evaluation, countries receive recommendations for improvement and may be subject to enhanced follow-up if deficiencies are identified.

CFATF publishes mutual evaluation reports, ensuring transparency and accountability within the region.

Relationship with the FATF

CFATF is recognized as an official FATF-Style Regional Body (FSRB) and participates in global AML/CFT coordination through regular reporting to FATF.

While FATF establishes international standards, CFATF adapts and enforces these guidelines at a regional level, ensuring contextual relevance for Caribbean jurisdictions with unique financial and economic structures.

This relationship enables two-way collaboration: FATF benefits from regional intelligence and experiences, while CFATF leverages FATF’s resources, best practices, and global visibility to enhance compliance across its member states.

Key Functions & Activities

  • Technical Assistance and Training: CFATF organizes workshops and training sessions for financial institutions, FIUs, law enforcement, and regulators on AML/CFT compliance, typology analysis, and investigation techniques.
  • Typology Exercises: Regular studies to identify and analyze emerging ML/TF threats specific to the Caribbean, such as offshore banking, remittance vulnerabilities, and casino-based laundering.
  • Information Sharing: CFATF facilitates collaboration among FIUs within the Egmont Group framework and promotes cross-border cooperation on financial intelligence.
  • Capacity Building: Strengthening AML/CFT frameworks, particularly in smaller economies with limited institutional capacity.
  • Monitoring and Compliance: Assisting member states in addressing deficiencies identified in mutual evaluations or FATF’s International Cooperation Review Group (ICRG) process.

Significance in the AML Landscape

The Caribbean region, characterized by large offshore financial sectors, free trade zones, and extensive remittance activity, faces heightened risks of money laundering and financial crime. CFATF plays a critical role in:

  • Enhancing regional AML/CFT supervision and consistency.
  • Promoting beneficial ownership transparency to combat shell company misuse.
  • Supporting compliance with global sanctions and counter-proliferation financing measures.
  • Encouraging regional integration and shared data intelligence to counter transnational crime.

Through its initiatives, CFATF has elevated the Caribbean’s AML/CFT capabilities, aligning regional systems with international standards and improving their reputation in global financial markets.

Challenges Faced by CFATF Members

Despite progress, member states encounter several challenges:

  • Limited resources and institutional capacity in smaller jurisdictions.
  • Balancing privacy laws with transparency requirements for beneficial ownership data.
  • Managing reputational risks associated with offshore finance centers.
  • Emerging digital finance risks, including crypto-asset misuse and cyber laundering.
  • Maintaining ongoing compliance amid evolving FATF standards.

To mitigate these challenges, CFATF continues to provide technical assistance and collaborate with partners such as the World Bank, International Monetary Fund (IMF), and United Nations Office on Drugs and Crime (UNODC).

Regional & Global Impact

CFATF’s influence extends beyond the Caribbean. Its assessments and reports contribute to FATF’s global typology studies, shaping international AML/CFT policies.

The organization also supports global enforcement actions against money laundering and terrorist financing networks operating across borders.

CFATF’s efforts have led to improved risk assessment frameworks, enhanced due diligence mechanisms, and stronger regulatory supervision in regional financial sectors.

Best Practices for Member States

  • Establish independent and well-resourced Financial Intelligence Units (FIUs).
  • Maintain updated national risk assessments (NRAs) reflecting emerging threats.
  • Enhance beneficial ownership transparency frameworks.
  • Foster collaboration among regulators, law enforcement, and private sector institutions.
  • Implement continuous training for AML compliance officers and investigators.

Industry Perspective

For financial institutions operating in CFATF member jurisdictions, aligning internal compliance programs with both national and FATF standards is essential.

Institutions are expected to integrate AML/CFT best practices, conduct enhanced due diligence (EDD) for high-risk clients, and cooperate with regulators in information sharing.

The CFATF framework also encourages regional banks and fintechs to strengthen transaction monitoring and leverage analytics to detect suspicious activity, reinforcing financial system integrity.

Related Terms

  • Financial Action Task Force (FATF)
  • FATF-Style Regional Bodies (FSRBs)
  • Anti-Money Laundering (AML)
  • Counter-Terrorist Financing (CTF)
  • Mutual Evaluation
  • Beneficial Ownership Transparency
  • Financial Intelligence Unit (FIU)

References

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