ANNUAL 2019 | REPORT
Insert Letter of Transmittal Insert Mission/ Vision Statement VISION
A premier agency supporting a robust and dynamic economy by safeguarding Belize from money laundering, terrorist financing and other financial crimes.
MISSION
To contribute to the economic and social stability of Belize by:
safeguarding its financial and business sectors from abuse without obstructing legitimate business; engaging in tactical and strategic intelligence gathering, analysis and sharing; and
securing compliance with the highest international standards and best practices for combating money laundering and terrorist financing. CORE VALUES
Integrity Accountability Leadership Professionalism Teamwork Commitment Results Driven
ANNUAL REPORT 2019
CONTENTS
PAGE
Organisational Chart ...... 3
List of Tables, Figures and Appendices ...... 4
List of Acronyms and Abbreviations...... 6
Director’s Message...... 9
Country Overview...... 12
The Financial Intelligence Unit...... 16
National Anti-Money Laundering Committee...... 19
National Risk Assessment...... 21
Analysis and Intelligence...... 22
STR Patterns ...... 25
Criminal Activity Types and Trends ...... 30
Supervision and Enforcement...... 32
DNFBPs...... 33
DNFBP Examinations and Outcomes...... 41
Investigations and Prosecutions...... 44
Types of Offences Investigated ...... 45
Investigative Tools...... 47
Domestic and International Cooperation...... 48
Presentations, Training and Meetings...... 51
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ORGANISATIONAL CHART
STRATEGIC CONSULTANT DIRECTOR
LEGAL CONSULTANT DEPUTY DIRECTOR
NRA COORDINATOR
RESEARCH ASSISTANT
HEAD OF HEAD OF HEAD OF OFFICE/HUMAN SYSTEMS/NETWORK COMPLIANCE INVESTIGATIONS FINANCIAL ANALYSIS RESOURCES ADMINISTRATOR DEPARTMENT DEPARTMENT DEPARTMENT MANAGER
COMPLIANCE INVESTIGATORS FINANCIAL ANALYSTS OFFICERS (3) (3) (4)
QUALITY ASSURANCE SECRETARY CLERICAL OFFICER OFFICE ATTENDANT SECURITY OFFICER OFFICER
3 LIST of TABLES, FIGURES and APPENDICES
TABLES PAGE
Table 1: Belize: Selected Economic Indicators...... 15
Table 2 : Reporting Entities under the MLTPA...... 24
Table 3: STR Submissions by Reporting Entity Sector, 2015 – 2019...... 26
Table 4: STRs by Suspicious Transaction Type or Area of Interest, 2015 – 2019...... 27
Table 5: Types and Values of Currencies Reported in STRs, 2015 – 2019...... 28
Table 6: DNFBP Registration Activity by Sector...... 35
Table 7: DNFBP De-Registrations...... 38
Table 8: Number of MLCO Approvals...... 39
Table 9: DNFBP On-Site Examinations by Sector, 2018 – 2019...... 41
Table 10: Source of Funds Queries...... 46
Table 11: RFIs by Area of Interest, 2016 – 2019...... 50
Table 12: Overseas Training Workshops Attended by FIU Staff Members...... 53
Table 13: Overseas Meetings and Conferences Attended by FIU Staff Members...... 54
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FIGURES
Figure 1: The Intelligence Cycle...... 23
Figure 2: Information Sharing Process...... 23
Figure 3: Number of STR Submissions, 2015 – 2019...... 25
Figure 4: STR Submissions by Location of Suspicious Activities, 2019...... 29
Figure 5: Percentage Shares of STR Submissions, 2019...... 29
Figure 6: STR Submissions by Resolution Status, 2019...... 30
Figure 7: Allocation of AML/CFT Supervisory Responsibility...... 32
Figure 8: Number of Registered DNFBPs: Dec 2015 – Dec 2019...... 34
Figure 9: Registered DNFBPs by Geographical Location...... 36
Figure 10: Registration Updates by Sector, 2018 – 2019...... 37
Figure 11: Types of Alleged Offences Investigated in 2019...... 45
Figure 12: RFIs Submitted to the FIU Belize, 2016 – 2019...... 48
Figure 13: RFI Submissions to the FIU 2019 by Main Submitting Countries...... 49
APPENDICES
Appendix 1: Cases Investigated by the FIU during 2019...... 55
Appendix 2: Cases Investigated with the Assistance of the FCWG, 2019...... 57
Appendix 3: Workshops and Presentations in Belize Involving the FIU, 2019...... 59
Appendix 4: RFI Submissions to the Belize FIU by Country of Submission, 2016 - 2019...... 61
5 ACRONYMS and ABBREVIATIONS
aka also known as
AML/CFT Anti-Money Laundering/Combating the Financing of Terrorism
BCIE Banco Centroamericano de Integración Económica (aka CABEI)
BCCI Belize Chamber of Commerce and Industry
BELTRAIDE Belize Trade and Investment Development Service
BIFSA Belize International Financial Services Association
BPD Belize Police Department
BZD Belize dollars
CABEI Central American Bank for Economic Integration (aka BCIE)
CAIS Central American Integration System (aka SICA)
CARICOM Caribbean Community
CARSI Central America Regional Security Initiative
CBB Central Bank of Belize
CDB Caribbean Development Bank
CDD Customer Due-Diligence
CE Common Era
CELAC Community of Latin American and Caribbean States
CEO Chief Executive Officer
CFATF Caribbean Financial Action Task Force
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COPOLAD Cooperation Programme between Latin America, the Caribbean and the European Union on Drugs Policies
CRC Costa Rican colones
DNFBPs Designated Non-Financial Businesses and Professions
DPP Director of Public Prosecutions
EU European Union
EUR Euro
FATCA Foreign Account Tax Compliance Act
FATF Financial Action Task Force
FCWG Financial Crimes Working Group
FINTRAC Financial Transactions and Reports Analysis Centre of Canada
FIU Financial Intelligence Unit
GBP UK Pounds Sterling
GDP Gross Domestic Product
GTQ Guatemalan quetzal
IBC International Business Company
IDB Inter-American Development Bank
IFSC International Financial Services Commission
IMF International Monetary Fund km2 square kilometres
KYC Know Your Customer
ML Money Laundering
MLCO Money Laundering Compliance Officer
MLTPA Money Laundering and Terrorism (Prevention) Act
7 MXN Mexican peso
N/A, n/a Not Available
NAMLC National Anti-Money Laundering Committee
NGOs Non-Governmental Organisations
NPOs Non-Profit Organisations
NRA National Risk Assessment
OECD Organisation for Economic Co-operation and Development
OFAC Office of Foreign Assets Control (part of the US Treasury Department)
ORINCO Organisation of Insurance Companies
OSIPP Office of the Supervisor of Insurance and Private ensionsP
OTA Office of echnicalT Assistance, US Treasury
PEP(s) Politically Exposed Person(s)
RFIs Request(s) for Information
SICA Sistema de la Integración Centroamericana (aka CAIS)
STR(s) Suspicious Transaction Report(s)
TF Terrorism Financing
UK United Kingdom of Great Britain and Northern Ireland
UN United Nations
UNODC United Nations Office on Drugs and Crime
US, USA United States of America
USD United States dollars
WTO World Trade Organisation
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DIRECTOR’S MESSAGE
The Belize Financial Intelligence Unit (the FIU) is a hybrid to have open and frank discussions on matters of mutual type FIU that is responsible for the reception and analysis interest and to minimize barriers to cooperation. The FIU, of suspicious transaction reports (STRs) from Reporting and other supervisory agencies, reiterated that sound AML Entities, and investigating and prosecuting financial crimes, supervision was predicated on strengthening the financial as necessary. The FIU is also ex officio chair of the system and removing obstructions to legitimate business. National Anti-Money Laundering Committee (NAMLC) A common misperception is that AML efforts run counter and provides secretariat functions to workings of the to ease of doing business, and that the investment in a Committee. One of the premiere mandates of NAMLC prudent, viable AML regime is a non-recoverable cost to is to advise the Minister of Finance on the development the business sector. On the contrary, it was highlighted, and of a national, coordinated Anti-Money Laundering (AML) generally agreed, that such capacity is a sterling, intangible action plan. It is only through a cohesive, multi-agency business asset that is extremely valuable in a business approach that we can define the appropriate policies, world that increasingly has low appetite for enterprises strategies and actions that would result in a National that do not use risk-based AML approaches to doing Anti-Money Laundering Policy that is fully in line with the business. The responsibility of AML supervisors, then, is to Financial Action Task Force (FATF) standards. use their unique vantage points and insights to place the business community in the best position to be successful A significant NAMLC achievement in 2019 was the especially when conducting international business. conclusion of the National Risk Assessment (NRA) process. A significant amount of time was spent in the early The private sector, on the other hand, emphasized that months of 2019 engaging with private sector stakeholders they were uniquely positioned to provide insights that to share the preliminary findings from the NRA and to get would assist in the risk-rating of sectors and industries. their perspectives. The process of updating the Report is to Consequently, it would be prudent to provide them commence in the next few months, to reflect more recent a seat at the table in the preliminary consultations country data. It is the commitment of NAMLC to ensure during the updating of the NRA document. The FIU, and that the private sector is engaged at an earlier juncture at Members of NAMLC, agreed. We fully expect that public/ the next iteration. One of the expected outcomes is that private engagements will be more frequent and more financial institutions and other designated non-financial comprehensive as we proceed through 2020 and beyond. businesses and professions (DNFBPs) will embrace the report as a national document and will use its findings to We were pleased to see significant legislative and other develop a framework for assessing risk at both the entity administrative developments in high risk sectors, in 2019. A and sector levels. draft Real Estate bill has been proposed by the Association of Real Brokers of Belize (with support from the Belize The national stakeholder engagements afforded both National Association of Realtors). It provides an opportunity public and private sector collaborators an opportunity for the development of a formal regulatory framework for
9 this industry. Among other things, it addresses the licensing manufacturing, food and beverage processing, tourism, and of real estate professionals, provides sanctions for a variety professional services. The FIU has an ongoing collaboration of violations, and emphasizes the need for fit and proper with the Ministry to conduct a parallel review of Free Zone requirements for persons who operate in the sector. The Anti-Money Laundering and Combating the Financing FIU was pleased to sit with both real estate associations of Terrorism (AML/CFT) obligations and compliance and provided inputs to ensure that the draft Bill would processes. This is especially useful considering the inherent incorporate appropriate AML standards. risks of Free Zones in general and the observations stemming from the NRA Report. The Ministry of Trade and Investment, in association with the Inter-American Development Bank (the IDB) Non-profit organizations and non-governmental had engaged the firm Vivid Economics to review the organizations (NPOs and NGOs) have been identified viability of the Free Zone industry in Belize. A ‘Regional by the FATF as institutions requiring special monitoring, Economic Development Master Plan for the Corozal especially regarding terrorist financing (TF) risks. District’ was produced in January 2019. In summary, the Consequently, in August 2019 the FIU and other NAMLC recommendations are that the Corozal Commercial Free agencies conducted a special outreach to a subsector of Zone should be repurposed with a new focus on light the NPO community, faith-based organizations (FBOs).
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The two-day event had commendable participation from effectively to deliver results: the 11 immediate outcomes.” FBOs from several faiths and from across the entire nation. It has been clear that Immediate Outcome 3 (Supervision) Several compliance issues were addressed including those continues to be a challenge for most jurisdictions (with related to immigration, tax services, record keeping and more than 95 percent of nations having either a low general AML compliance. The Unit continues to liaise with or moderate effectiveness). Our Compliance Unit was the NPO/NGO community to provide similar guidance to boosted with an additional Compliance Officer, bringing other sectors of that community. the total complement to five persons. Although the task is daunting, we are committed to using every resource to At the end of 2019, FIU management crafted a 2020 ensure that we can connect effectively with the DNFBP Business Plan which included a substantial focus on community and provide them with the necessary technical supervision of DNFBPs, for which the Unit has AML assistance to upgrade their AML/CFT compliance regimes. supervisory responsibility. According to the FATF Methodology “adopting compliant laws and regulations is not sufficient. Each country must enforce these measures, and ensure that the operational, regulatory and legal components of an AML/CFT system work together
11 COUNTRY OVERVIEW
Belize is a small, independent country (land area of about descendants with the indigenous Maya. More recently, 23,000 km2, with a population estimated at 409,000) there has been sustained inward migration from other located on the south-eastern section of the Yucatán parts of Central America, contributing to a relatively high peninsula in the western Caribbean, sharing its northern rate of population growth despite substantial migration boundary with Mexico, and its western and southern from Belize, mainly to North America. The population is boundaries with Guatemala. The borders are porous, with widely distributed across its land area, contributing to high the seacoast on the east comprising numerous cayes and per-capita infrastructure costs, while per capita income sandbanks forming the longest barrier reef in the Americas; levels have remained relatively low, a result of low value- while the typical Central American rainforest rises from added in production. The rural population constitutes relatively flat terrain and coastal wetlands in the north to more than half of the total population, and the incidence of mountainous jungle in the west and south. poverty in rural areas is greater than in urban areas. These factors have contributed to a high level of cash usage in A former colony of the UK, its political and judicial the economy. systems are based on the Westminster model. The country is fully engaged both in the Caribbean, through its Financial markets in Belize remained undeveloped, despite membership in the Caribbean Community (CARICOM) the location of bank and credit union branches, and offices and of the Caribbean Development Bank (CDB), and with of money transfer services agents, in all municipalities. the Caribbean Court of Justice serving as its final court of During 2019, money market paper availability (maturities of appeal; and in Central America, through its membership in one year or less) continued to be restricted to Government the Central American Integration System (SICA) and the Treasury Bills and debentures from the electricity utility; Central American Bank for Economic Integration (CABEI). while longer-term paper outstanding was restricted to Government Treasury Notes, and to debentures issued by The economy is highly open, dependent on imports two municipalities, the electricity utility, and one private for most of the country’s non-food consumption and organisation. Insurance companies, credit unions, and investment requirements, including fuel and, to a lesser the Central Bank were the main holders of longer-dated extent, electricity, with a substantial proportion of paper. In the absence of organised markets, changes electrical power being generated locally utilising renewable in the ownership of securities resulted from private sources, agricultural commodities, some agro-processing, transactions. This included a small number of transactions and more recently tourism, are the main contributors to involving utility shares. Commercial banks, the largest export earnings. Most of the country’s trading activities is holders of Treasury Bills, adjusted their holdings mainly in conducted in US dollars (USD); the external value of the transactions with the Central Bank in order to satisfy their Belize dollar (BZD) has been fixed at USD 0.50 since 1976. liquid assets requirements. During 2019, interest rates in Belize remained at historically low levels, although debit The country’s population though small is diverse, with and credit card were actively utilised, despite high interest a mix of European, African, Middle Eastern and Asian charges on outstanding credit card balances.
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13 The country’s location on the Yucatán peninsula places it within the broad corridor along which shipments of illegal drugs move from South to North America. During the course of the year, local authorities, with active cross- border cooperation and coordination of activities among Governments in the region, intercepted and seized a number of shipments of cocaine, including aircraft used in transportation.
As indicated in Table 1 below, overall economic performance during 2019 continued at a subdued level, following on developments since the global recession. Tourism remained the largest single contributor to economic activity, but the rate of growth of activity in that industry declined from the previous year. Agricultural export earnings also weakened, despite output growth in banana and sugar production, mainly as a result of disease (the farmed shrimp and citrus industries), drought (small- farmer vegetable production) and lower sugar export prices. Drought conditions also affected hydro-electricity production, resulting in increased reliance on electricity imports from Mexico at higher than anticipated prices.
Since the global financial sector difficulties of 2007-09, and with intensified surveillance of the activities of their own domestic financial institutions by US and European regulators, including the imposition of increased AML and, in particular, know-your-customer (KYC) compliance requirements, Belize’s banking system, along with those of many other small economies, including in the Caribbean and Latin America, has been adversely affected by the withdrawal of a substantial part of its correspondent banking relationships with institutions in developed countries, as those institutions sought to “de-risk”. During the year, local banks continued to respond positively to increased scrutiny from local regulators, and to exercise great care not to jeopardise their remaining foreign correspondent relationships, resulting in the maintenance of strong KYC and customer due diligence (CDD) protocols.
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TABLE 1: BELIZE: SELECTED ECONOMIC INDICATORS
ITEMS 2016R 2017R 2018R 2019P
Population (000) 378.0 387.9 395.9 408.5
Population growth rate (%) 2.6 2.6 2.1 3.2
GDP growth rate (%) (0.6) 1.4 2.1 0.3
Central Govt Debt/GDP (%) of 88.4 93.7 93.8 95.0 which External Debt/GDP (%) 65.7 65.5 64.7 64.6
Overall fiscal surplus (% of GDP) (5.2) (1.3) (1.2) (2.0)
Unemployment rate (%) (April of year shown) 9.5 9.3 9.4 9.1
Consumer prices index (% change) 0.7 1.1 0.3 0.2
Data Sources: Prime Minister’s Budget Presentation, 5 March 2020 Central Bank of Belize Statistical Institute of Belize
Notes: Numbers in brackets are negative Population and GDP numbers are estimates Fiscal outturn covers the fiscal year (April to March) beginning April in the year shown. R = Revised P = Preliminary estimate
15 FINANCIAL INTELLIGENCE UNIT (FIU)
The Financial Intelligence Unit in Belize was established The full scope of the FIU’s functions includes: in 2002 by the FIU Act, No. 35 of 2002, in keeping with global standards to counter financial crimes including • Counteracting financial crime, broadly defined, money laundering (ML) and the financing of terrorism through independent review and research, (TF) at both national and international levels. The FIU is through receipt and analysis of suspicious trans- one of four domestic agencies responsible for ensuring actions reports, dissemination of intelligence to the implementation of AML/CFT obligations as outlined appropriate law enforcement authorities, inves- in the provisions of the Money Laundering and Terrorism tigation and prosecution of financial crimes, and (Prevention) Act (MLTPA), Chapter 104 of the 2011 Laws asset recovery; of Belize. The other three institutions are the Central Bank of Belize, the Office of the Supervisor of Insurance • ensuring coordination and cooperation among and Private Pensions, and the International Financial law enforcement agencies, government depart- Services Commission. Under these arrangements the FIU ments, and regulatory authorities, private insti- is responsible for the supervision of DNFBPs, while the tutions and members of relevant professions in other three supervisory agencies oversee the activities of evolving methods and policies to prevent and mainly financial institutions operating both onshore and suppress financial crimes; offshore, as well as trust and corporate agents. • cooperating with and assisting external counter- The MLTPA is the primary AML/CFT legislation in Belize. parts, including international law enforcement It sets out, in particular, the obligations for reporting agencies and other official regulatory or super- entities, who are persons whose regular occupation or visory bodies in other countries that are charged business is the carrying on of any activity listed in the First with responsibilities similar to those that are de- Schedule of the Act; establishes a framework to address volved on the FIU; and proceeds of crime; and empowers the FIU and the other three supervisory agencies to carry out a broad range of • informing and educating the domestic population oversight and enforcement activities. regarding ML, TF, and financial crime issues gener- ally and in relation to assisting with the detection, prevention, discouragement, and deterrence of fi- nancial crimes.
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The FIU is headed by a Director, appointed by the Governor- Unlike a number of other FIUs, the Belize FIU also has General on the advice of the Prime Minister, and is assisted investigative and prosecutorial powers, and has on its by a Deputy Director. FIU operations are conducted investigative staff members attached from the Belize Police through four main functional areas: Analysis, Compliance, Department. The Investigations Department is currently Investigations and Prosecutions, and National Risk headed by a senior Police Officer. This arrangement allows Assessment, with critical human resources, and operations the FIU to draw on its own internal analysis capacity as and financial management support being provided by an well as on the technical and physical capacity of the Belize Office Manager, and with overall information management Police Department (BPD). Through a strong working services provided by a Systems Administrator. relationship that has been developed between the FIU and the Office of the Director of Public Prosecutions, the FIU The Analysis Department reviews and analyses trends and also has access to legal guidance from that Office. patterns in financial flows, including the size and composition of flows, origins and destinations, transactions purposes, Under the MLTPA, the FIU can seek the forfeiture of the and, in particular, departures from trends. Patterns proceeds of financial crime. in non-financial value exchange transactions are also reviewed for indicators of possible ML predicate criminal The FIU also coordinates national AML/CFT risk activity. This work stems from its analyses of suspicious management activities and had been focused on producing transaction reports involving both domestic and cross- Belize’s first National Risk Assessment (NRA), completed border transactions, and also from reports of other crimes at the end of 2019. This broad-based undertaking was that may result in financial proceeds or proceeds of value intended to develop a comprehensive understanding of other than financial instruments. Findings from analytical the ML and TF threats faced by the country, and its level of reviews are passed on to the Investigations Department vulnerability to those threats, resulting in a determination or relevant law enforcement agency as appropriate. of risks and their prioritisation. Substantial time and effort went into the preparation of this first NRA. Given ongoing The Compliance Department is responsible for the AML/ developments in the operating environment both nationally CFT oversight of DNFBPs, essentially private business and globally since the original start of the exercise in 2016, firms whose primary business falls into a list of categories resulting in aspects of the findings becoming somewhat defined in the MLTPA Regulations1, a list that does not dated. Preliminary work was started at year-end both on include financial institutions. The Department registers updating the risk assessment and on the preparation of an DNFBPs and maintains up-to-date information on their action plan to address areas identified as high-risk both ownership and operations; seeks to ensure through on- in the completed NRA and during the ongoing updating site examinations and desk reviews that these entities process. comply with AML/CFT and related requirements as set out in the MLTPA and in Regulations issued thereunder; During the year, the FIU launched a strategic planning and assists entities in keeping up-to-date with AML and exercise with the assistance of an external consultant, CFT best-practices through regular outreach sessions. beginning with a two-day retreat. The overall objective of Reports from the Compliance Department, together with the ongoing planning exercise, which continued into 2020, suspicious transaction reports from DNFBPs, are reviewed is to assess the past performance of the organisation and by the Analysis Department. to set objectives for the medium- and longer-term based
1 Statutory Instrument No. 9 of 2014.
17 both on the mandates set out in the domestic legislation, At the end of the year the FIU had 26 persons on staff, and on the country’s international AML/CFT obligations. including three members on attachment from the BPD. An important shorter-term priority involves working through NAMLC to ensure a satisfactory outcome from the scheduled 2023 Mutual Evaluation exercise.2
2 A review of a country’s technical compliance with the FATF Recommendations and the effectiveness of implementation of those Recommendations is undertaken from time to time by staff members in AML/CFT supervisory institutions in peer FATF/CFATF countries.
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NATIONAL ANTI-MONEY LAUNDERING COMMITTEE (NAMLC)
NAMLC was formally established in 2014 by section • the Director General of the International Finan- 77B of the MLTPA. Chaired by the Director of the FIU, cial Services Commission NAMLC is charged with: • the Director General of the Belize Tax Service a) advising the Minister on matters involving AML/ CFT and countering the financing of weap- • the Governor of the Central Bank of Belize ons proliferation, and on the development of a national action plan that includes the ef- • the Director of Public Prosecutions fective collaboration of supervisory and law enforcement agencies in the AML/CFT effort; • the Comptroller of Customs
b) advising the Minister on Belize’s participation • the Director of Immigration in the international AML/CFT effort; and • the Supervisor of Insurance and Private Pensions c) advising the Minister on the development of AML/CFT and anti-proliferation policies. NAMLC met formally on several occasions during the year, as matters arose requiring broad consultation involving The following is a list of senior public sector officials who members, although members maintained informal contact were NAMLC members or who participated in NAMLC with each other on specific issues. meetings during 2019, : In January, the FIU led a presentation on the NRA exercise, • the Director of the FIU its objectives and processes, in a joint NAMLC meeting with the Bankers’ Association, with NAMLC members • the Solicitor General responding to a number of questions and issues raised by representatives of the commercial banks. The importance • the Financial Secretary of technical compliance by Belize with the 40 FATF Recommendations was emphasised, as was effectiveness • the CEO of the Ministry responsible for the Po- in implementing the Recommendations as measured by lice Department eleven FATF-defined “immediate outcomes”. The critical importance of meeting the requirements was related to • the Commissioner of Police the need to perform satisfactorily in the forthcoming
19 CFATF Mutual Evaluation exercise, then scheduled for While NAMLC focused on broad policy issues, operational 2022. Concerns relating to the loss of some overseas issues were handled through a sub-committee established correspondent banking relationships also featured in the by NAMLC in 2017 called the Financial Crimes Working discussions. Group (FCWG), chaired by the BPD with the FIU as Deputy Chair. During the year, the FCWG oversaw law The NAMLC meeting in February was largely taken up with enforcement investigations and related activities involving issues relating to the completion of the NRA. In addition financial crime, and provided policy recommendations to to the need for the FIU to receive final reports that were NAMLC based on their activities and findings. Domestic still outstanding from some Working Groups, the view law enforcement activities at times involved cooperation was expressed that, arising out of comments made at the with law enforcement agencies from other jurisdictions. meeting with the Bankers’ Association, effort should be made to obtain the views of reporting entities in the other At year end, the FCWG comprised representatives from: sectors on the NRA findings. There was particular interest in the operations of some Faith-based entities and other • the Belize Police Department non-profit organisations (NPOs), and the possible misuse of these entities, given their large number and the small • the Financial Intelligence Unit size of many of them, together with their dependence on grant funding, as unwitting conduits for money laundering • the Customs and Excise Department and terrorist financing. • the Office of the Director of Public Prosecutions In August, the FIU formally brought NAMLC members up-to-date on a number of issues in relation to the NRA • the Belize Tax Service Department3 document (which at that point was almost complete), and there was discussion, continuing from the February • the Immigration and Nationali- meeting, on approaches to its publication. That meeting also ty Services Department discussed proposals for workshops and training sessions going forward, both for staff members of supervisory • the International Financial Services Commission. agencies as well as for reporting agencies, given issues that had been identified throughout the CFATF region NAMLC members continued to play a critical role in in relation to the effectiveness of implementation of the maintaining effective participation of the Belize jurisdiction FATF Recommendations. in the international financial system through both external efforts (full participation in CFATF arrangements, and In November, a number of outstanding issues was ongoing consultation with the OECD, the World Trade discussed, including the need for training in AML/CFT Organisation (WTO) and the EU on taxation, trade issues in both the public and private sectors, and the level and AML/CFT issues), and internally through AML/CFT of involvement of the private sector in the preparation supervision of and consultation with reporting entities. of risk assessments. The FIU Director brought members There were substantial changes to the international up-to-date on outreach sessions that had been held for business company arrangements, and to the supervisory reporting entities and presentations that had been made powers of the IFSC, through new domestic legislation. to both public and private sector entities during the year, and listed training and operations development sessions that were planned both for the remainder of the year and for 2020.
3 This was formed in mid-year through the merger of the Income Tax Department and the General Sales Tax Department.
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NATIONAL RISK ASSESSMENT (NRA)
The FATF Recommendations set out a framework of Working Group reports were finalized in April 2019, and measures which countries should implement in order to arrangements were put in place for additional consultations combat ML/TF, as well as the financing of proliferation with the private sector. of weapons of mass destruction. A key element of the Recommendations requires countries to identify, During May 2019 thirteen outreach sessions were held assess and understand their ML/TF risks and implement with members of the various sectors assessed during the effective measures to mitigate risks identified4. To meet NRA exercise. The main findings and conclusions from this requirement, Belize commenced a NRA exercise in the sector assessments were discussed at the outreach relation to ML/TF in December 2016, with methodological sessions, and participants were given the opportunity to assistance from the World Bank. The exercise was weigh-in and provide feedback on the results. The feedback conducted under the aegis of NAMLC, following that received was taken into consideration by the Working institution’s establishment, although the actual work was Groups, and where justified, adjustments were made to coordinated by the FIU. A total of about 50 persons sector reports. Following these adjustments, a first draft representing regulatory, supervisory and enforcement of the consolidated NRA report was completed and agencies and other stakeholders formed seven working circulated within NAMLC for review in September 2019. groups which were tasked with completing specific modules to assess ML threats and vulnerabilities at a At year end, the NRA Report had been forwarded to national and sector level for defined sectors. To assist Cabinet for approval and NAMLC had started to plan for with the assessment, views and inputs from private sector the start of the next phase of the exercise. This next phase representatives were gathered through focus group includes the preparation and implementation of a national meetings, interviews and questionnaires. plan of action for Belize to address risks identified by the NRA. Also identified as a priority for NAMLC in 2020 was In January 2019, a special presentation was made to the establishment of a National AML/CFT strategy. the Bankers’ Association of Belize to bring them up to date with the purpose and progress of the NRA. NRA
4 Information on the FATF and its Recommendations may be obtained from its website: www.fatf-gafi.org.
21 ANALYSIS and INTELLIGENCE
The core function of the FIU is the receipt, analysis and Domestically, the Department liaises with the other AML/ dissemination of information relating to suspected ML, TF CFT supervisory authorities in Belize (Central Bank of and other activities involving financial crime. This function Belize, International Financial Services Commission, and is carried out by the FIU’s Analysis Department. This the Office of the Supervisor of Insurance and Private department also reviews and analyses trends and patterns Pensions); and works closely with the FIU’s Compliance in financial flows, including the size and composition of Department to help ensure that reporting entities flows, origins and destinations, transactions purposes, supervised by the FIU are aware of their obligations under and, in particular, departures from trends, and provides the MLTPA to report suspicious transactions. the results of its analyses and recommendations, including policy recommendations, to management. The work of During the year, information analysis followed the this department is an important information source for established intelligence cycle, a five-step process the Investigations Department, law enforcement agencies during which raw information is transformed into an and for other competent authorities. intelligence product on which a management decision on whether further investigation is necessary, can be The Analysis Department obtains its information from a taken. New information from a given source is combined variety of sources, including suspicious transaction reports with information from other sources including existing from domestic entities; research and assessments of databases, and the integrated output is assessed against business behaviour patterns in the various sectors of the the requirements of the MLTPA, and in particular the domestic economy; general and specialised databases in the prohibitions set out in Part II of that Act, as well as against public and private sectors; public and private reports on typologies associated with ML and TF activities5. Figure changing typologies of criminal behaviour, with particular 1 below summarises the intelligence cycle, while Figure 2 reference to crimes that generate financial proceeds; shows the direction of information flow. and inquiries and responses from peer entities in foreign jurisdictions.
5 An unofficial consolidated version of the Money Laundering and Terrorism (Prevention) Act (MLTPA) with amendments is available on the FIU’s website.
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DISSEMINATE PLANNING/TASKING & DIRECTION
The product is shared with all the This is the foundation where “structure” is necessary stakeholders and created. The steps and guidelines to unless authorized by the FIU, it produce a good product is set out here. It should only be used for is critical to the success of the overall intelligence purposes. outcome of any finished product. .
EVALUATE & REVIEW COLLECTION & COLLATION This step is taken at every stage of This is where contact is made with the the cycle to keep the process on the necessary agencies and data repositories right track. There is a possibility that to gather pertinent information that will new information may be added as we aid in the analysis of the case at hand. A ensure that all bases are covered collection plan created where information before dissemination. The report that is collected is sorted and categorized needs to be tailored to its for value to be added. end-user(s).
PROCESS & ANALYZE
The vast amount of data collected is then converted to usable information through data reduction. The information is thoroughly scrutinized and evaluated, and a detailed report is produced.
FIGURE 1 : THE INTELLIGENCE CYCLE
REPORTING STR BELIZE FIU LAW ENFORCEMENT/ ENTITIES OTHER COMPETENT AUTHORITIES
FIGURE 2: INFORMATION SHARING PROCESS
23 STRs are an important data source for the Analysis that give them reasonable grounds to suspect that the Department. Both financial and non-financial reporting transaction is related to ML/TF. Table 2 below lists the entities whose regular occupation or business is the reporting entities that are subject to STR reporting, and carrying on of any activity listed in the First schedule of that are required, among other obligations, to follow KYC the MLTPA are required to file STRs with the FIU when protocols and CDD reviews. they encounter transactions, or attempted transactions,
TABLE 2: REPORTING ENTITIES UNDER THE MLTPA6
FINANCIAL ENTITIES NON-FINANCIAL ENTITIES
Lawyers/Notaries/Other Independent Domestic and International Banks Legal Professionals
Credit Unions Accountants/Auditors/Tax Advisors
International Financial Service Providers Casinos and Gaming Establishments
Remittance Service Providers Trust and Corporate Services Providers
Domestic and International Insurance Businesses NGOs
Moneylenders NPOs
Pawnbrokers Businesses Operating in a Free Zone Area
Real Estate Agents
Dealers in precious metals and precious stones
Dealers in vehicles
6 Banks, Credit Unions, Remittance Services Providers, and Money Lenders and Pawnbrokers are supervised by the Central Bank of Belize. International Financial Services Providers, and Trust and Corporate Services Providers are supervised by the International Financial Services Commission. All Insurance businesses are supervised by the Office of the Supervisor of Insurance and Private Pensions. All other entities listed are supervised by the FIU. NGOs are non-governmental organisations, while NPOs are non-profit organisations.
24 ANNUAL REPORT 2019
SUSPICIOUS TRANSACTION REPORT PATTERNS
Figure 3 below shows the number of STRs submitted by are available on the FIU’s website; completed forms are reporting entities over the period 2015 to 2019, while the submitted on a confidential basis. It is an offence (referred table that follows identifies the types of entities making the to as “tipping off”) under the MLTPA for entities filing submissions. An STR is prepared and submitted to the FIU reports to inform or alert persons that an STR has been whenever a reporting entity suspects that a transaction, or or is being submitted on them, and the FIU maintains strict attempted transaction, involves or is related to ML/TF, or confidentiality with respect to STR submissions. represents the proceeds of criminal activity. STR forms
2019 294
2018 255
2017 232 YEAR
2016 221
2015 234
0 50 100 150 200 250 300
NUMBER OF STRS
FIGURE 3: NUMBER OF STR SUBMISSIONS 2015 - 2019
The figure shows that, except for 2016 when the number of STRs has been on an upward trend. As shown number of total STR filings declined (mainly as a result in Table 3, Banks, Credit Unions, and Remittance Service of a reduction in the number of filings by International Providers have been accounting for the majority of the Banks and the cancellation of licences by the International filings. Moneylenders submitted two reports for the 2019 Financial Services Commission (IFSC) for the operation reporting period. of International Remittance Services Providers), the
25 TABLE 3: STR SUBMISSIONS BY REPORTING ENTITY SECTOR 2015 - 2019
REPORTING ENTITIES 2015 2016 2017 2018 2019
Domestic Banks 109 115 94 71 117
International Banks 61 26 27 30 34
International Financial Services Providers 21 44 29 21 16
Credit Unions 12 7 37 72 72
Attorneys at Law 2 3 0 4 0
Remittance Service Providers 0 11 38 45 42
International Remittance Services Providers7 25 1 0 0 0
Casinos 2 0 0 0 1
Domestic and International Insurance Providers 0 1 5 8 8
Supervisory Authorities 2 3 1 4 0
Moneylenders 0 0 0 0 2
Other 0 10 1 0 2
TOTAL 234 221 232 255 294
Table 4 classifies STRs by type of suspicious transaction. Following “fraud” in frequency of reported suspicious Fraud was the most commonly classified activity among transactions during the year were “activity outside customer suspicious transactions and held the top spot in every profile”, “unwillingness to declare source of funds”, “large year during the period under review in the table. For cash transactions”, and “structuring”. The decrease in 2019, there were 85 fraud classifications. This classification reporting frequency for the “money laundering” category has continued to increase over time, rising by 9% in since 2016 is thought to reflect a clearer understanding of 2019 above the 2018 total. The types of fraud that were the reporting categories, as a consequence of the sustained reported included check fraud, loan fraud, romance scam, increase in the FIU’s outreach workshops and awareness invoice redirection fraud, and wire transfer fraud. presentations to reporting entities.
7 This category of activity was discontinued in 2016
26 ANNUAL REPORT 2019
TABLE 4: STRS BY SUSPICIOUS TRANSACTION TYPE OR AREA OF INTEREST 2015-2019
SUSPICIOUS TRANSACTIONS TYPE 2015 2016 2017 2018 2019
Fraud 63 62 70 78 85
Money Laundering 21 50 8 11 10
Activity Outside Customer Profile 30 26 18 38 47
Drug Trafficking 6 2 5 3 8
Background Check 48 34 0 0 0
Embezzlement 3 6 0 0 3
Unauthorized currency exchange 8 16 22 6 7
Large Cash Transactions 6 15 16 26 28
Tax Evasion 0 0 9 9 14
Structuring 0 0 41 30 26
Incompliant with KYC Obligations 0 0 12 5 10
Operating without licence 0 0 11 5 2
Unwilling to Declare Source of Funds 0 0 17 25 29
Terrorist Financing 0 0 0 1 0
Other 49 10 12 23 25
TOTAL 234 221 241 260 294
27 VALUE
The nominal monetary values involved in STRs were completed, including attempts to open accounts. The value generally reported in either BZD, USD, Euro (EUR), or of BZD denominated STRs decreased by 53% in 2019, Pounds Sterling (GBP), as shown in Table 5. The value of from BZD 61.2 million in 2018 to BZD 29 million. There individual transactions was not always available due to was a 6% increase in the total nominal values in USD STRs the type of transaction being undertaken, or the point at over the year from USD 17.1 million to USD 18.1 million. which the suspicion was formed and reported. Falling into The values in other currencies were small in 2019. this category were attempted transactions that were not
TABLE 5: TYPES AND VALUES OF CURRENCIES REPORTED IN STRS 2015-2019(Values in millions of currency units)
CURRENCY 2015 2016 2017 2018 2019
BZD 29.2 16 11.7 61.2 29
USD 73.6 102 56.9 17.1 18.1
EUR 3.6 1 0.7 n/a 0.007
GBP 1.2 n/a 10.9 n/a 0.005
GEOGRAPHICAL LOCATION
Of the 294 STRs submitted, 285 involved activities major tourism destinations in the District: Ambergris Caye occurring in Belize, while 9 occurred in foreign jurisdictions (14), and Caye Caulker (1). The lowest number of STRs but became known to domestic reporting entities through (4% of the total) came from the Corozal District. Figure account monitoring and the customer due diligence 4 shows the geographical distribution of STR reporting, processes. The majority of the reporting involved activity while Figure 5 shows the distribution on a percentage in the Belize District, accounting for 182 or 62% of total basis. submissions, with 15 submissions made in respect of two
28 ANNUAL REPORT 2019
COROZAL 12 AMBERGRIS C AYE 14
ORANGE WALK CAYE CAULKER 30 BELIZE 1 167
C AYO 31 STANN CREEK 16
TOLEDO 14
FIGURE 4: STR SUBMISSIONS BY LOCATION OF SUSPICIOUS ACTIVITIES 2019
Cayo Stann Cree 10 5 5 4 USA 1 7 Tole o 4 8 Ot er 3 1 Coro al Guatemala Beli e U raine 4 1 0 3 61 9 0 3 S ain 0 7 Oran e Wal 10 2
FIGURE 5: PERCENTAGE SHARES OF STR SUBMISSIONS 2019
29 RESOLUTION
STRs are reviewed upon receipt and given a priority closed when matters related to a particular transaction ranking for further analysis. Priority rankings are based on are satisfactorily resolved, the typologies and behaviour an STR scoring matrix used by the Analysis Department. patterns may resurface in other circumstances and with The findings from the initial review, or indicators arising different economic actors, so that each event adds to during the course of subsequent analysis, may result in the store of knowledge available to the FIU, improving its the involvement of the Investigations Department at an capacity to deliver on its mandate. Figure 6 shows STR early stage in the proceedings. Although STRs may be submissions during 2019 by resolution status at year-end.
12%
88% ACTIVE RESOLVED
FIGURE 6: STR SUBMISSIONS BY RESOLUTION STATUS 2019
CRIMINAL ACTIVITY TYPES AND TRENDS
The following types of criminal financial activity were reported on as being of particular interest during the course of 2019:
• Phishing scams • Structuring
• Romance fraud o Avoiding declaring source of funds (do- mestic banks); • Invoice redirection fraud o Avoiding approval from the Central Bank • Financial activity is inconsistent with the stated of Belize (remittance service providers). business purposes
30 ANNUAL REPORT 2019
Of particular interest has been Invoice Redirection Fraud. FIU’s analysis of cases coming to its attention revealed that: Company A places an order for items or services to be supplied by Company B, and the two companies agree • Scammers were targeting both small and large on pricing and on payment arrangements. Scammer companies; C hacks either Company A’s system or Company B’s system to obtain information, and then, pretending to be • Communication was generally by email, and Company B, communicates with Company A and modifies scammers’ email addresses were almost identical the payment information that Company A had received to those of the genuine suppliers; from Company B. Company A then pays in accordance with the modified information. Company B is unaware • Modifications to documents were hard to detect; of the development until it enquires about payment from and Company A. Communication between Companies A and B then reveals what has taken place: Company A’s payment • The probability of recovery of funds from scam- has been diverted to an unknown entity. mers was low.
TRENDS BY SECTOR (SEE TABLES 3 AND 4)
Domestic Banks and Credit Unions Remittance Service Providers
There were 189 STRs submitted by domestic banks and In the Remittance Service Providers sector, the most credit unions in 2019, a 32% increase compared to 2018. common activity involved in suspicious transactions was The most common suspicious activities reported by “structuring”, accounting for 22 STRs from this sector. these institutions in 2019 were activity outside customer These structuring submissions were as a result of persons profile (44), fraud (43), and unwillingness to declare source using multiple agents on the same day to avoid the need of funds (27). The other reported activities involved tax to obtain exchange control permission from the CBB evasion, large cash transactions, and unauthorized currency for transactions exceeding USD$500. Given a total of 26 exchange. structuring transactions reported by all sectors, the STRs point to a concentration of this activity in this particular sector. The remaining STRs from this sector involved fraud. International Banks
The majority (22, or 65%) of the STR submissions from International Financial Services Providers international banks resulted from adverse information discovered when conducting due diligence for either For 2019 only corporate service providers in this sector existing or potential customers. Of the 34 submissions, 19 submitted STRs. Of the 16 submissions by this subsector, 11 involved fraud, while the remaining 15 involved other areas involved adverse information on the client regarding fraud, of suspicion, including activity outside customer profile, embezzlement, tax evasion, being on the US sanctions list failure to comply with KYC obligations, and adverse media (OFAC), or money laundering. Three submissions involved reports involving drug trafficking, corruption, or tax fraud. failure to comply with KYC obligations, while two involved companies that were “operating without licence”.
31 SUPERVISION AND ENFORCEMENT
As stated earlier in this report, financial institutions, obligations is shared among the FIU, CBB, IFSC, and the international business companies, and DNFBPs are OSIPP, with the figure below showing the distribution of supervised for compliance with the AML/CFT regime as supervisory responsibility, in accordance with the First and set out in the MLTPA. Responsibility for supervision of Third Schedules of the MLTPA. reporting entities’ complianceFigure 7:with Alloca their �AML/CFTon of AML/CFT legal Supervisory Responsibility
FINANCIAL INTELLIGENCE UNIT CENTRAL BANK OF BELIZE - Desi nate Non-Financial Businesses - Domestic an International Ban s an Professions (DNFBPs) - Cre it Unions - Remittance Ser ice Pro i ers - Moneylen ers an Pa n ro ers - Ot er Domestic License Financial Institutions
INTERNATIONAL FINANCIAL OFFICE OF THE SUPERVISOR OF SERVICES COMMISSION INSURANCE & PRIVATE PENSIONS - International Financial Ser ice -Domestic an International Insurance Pro i ers Pro i ers - Trust or Com any Ser ice Pro i ers
FIGURE 7: ALLOCATION OF AML/CFT SUPERVISORY RESPONSIBILITY
32 ANNUAL REPORT 2019
DNFBPs comprise: • ensuring appointment and maintenance within each DNFBP of an MLCO who is a senior mem- • Lawyers, notaries and other independent legal ber of staff of that DNFBP and whose appoint- professionals8; ment as MLCO is approved by the FIU;
• Accountants, auditors and tax advisers; • conducting regular desk and on-site compliance reviews and examinations, focusing on reviews of • Casinos, gambling houses and online gaming; AML/CFT policies, procedures, operations and manuals; • Dealers in precious metals and precious stones; • reviewing independent audits of AML/CFT poli- • Businesses operating in a free zone area; cies and procedures of DNFBPs;
• Non-Governmental organisations; • enforcing compliance with AML/CFT obligations through the imposition of administrative sanc- • Non-profit organisations; tions;
• Real estate agents; and • ensuring awareness of AML/CFT obligations and new ML and TF typologies and trends by DNFBPs • Vehicle dealers. through outreach sessions and ongoing provision of advice and training; and In ensuring that DNFBPs satisfy their AML/CFT obligations, the FIU focuses its supervisory activities on the following • issuing instructions, guidelines and recommenda- key areas: tions to help DNFBPs comply with their AML/ CFT obligations. • verifying registration with the FIU and the main- tenance of registration, together with detailed documentation review at initial registration and at registration updates9;
8 Lawyers, notaries and legal professionals are reporting entities when they carry out the following activities for their clients: a) Buying and selling of real estate b) Management of client money, securities or other assets c) Management of bank savings or securities accounts d) Organization of contributions for the creation, operation or management of companies, or e) Creation, operation or management of legal persons or arrangements, and buying and selling of business entities.
9 The DNFBP registration documentation requirements are set out in section 5 of the DNFBP Regulations, Statutory Instrument No. 9 of 2014, available on the FIU’s website.
33 REGISTRATION OF DNFBPs
In accordance with section 85B of the MLTPA, any person Since 2015, the FIU has recorded continuous increases who intends to carry on or is carrying on business as a in the total number of registered DNFBPs. There were DNFBP must register with the FIU10. There is an initial increases of 15% from 2015 to 2016, 8% from 2016 to registration application fee, and there is an annual fee 2017, 6% from 2017 to 2018 and 9% from 2018 to 2019. payable on each anniversary of first registration. Once registered with the FIU, DNFBPs remain on the register, Figure 8 shows the growth in the number of registered unless they are de-registered. Each DNFBP is required to DNFBPs between the end of 2015 and the end of 2019. update its registration information promptly whenever The increases reflect an ongoing registration drive on there is a material change in its ownership or management, the part of the FIU following a change in the legislation in or in its circumstances and activities; and the rules provide 2014 that broadened the range of institutions defined as for penalties for failure or undue delay in updating the DNFBPs, together with sustained growth in the numbers registration information. of non-profit organisations, real estate agents, and vehicle dealers since 2015. Figure 8: Number of Registered DNFBPs: Dec 2015 – Dec 2019
1079 987 928 854
743
2 15 2 16 2 17 2 1 2 1
FIGURE 8: NUMBER OF REGISTERED DNFBPs: DEC 2015 – DEC 2019
10 Details of the registration requirements and procedure, including the information that needs to be provided, are set out in the DNFBP Regulations. See previous footnote.
34 ANNUAL REPORT 2019
During 2019, the FIU recorded 161 new registrations and other gambling operations rose from 9 at the end of 2018 69 de-registrations, for a year-end total of 1079 entities to 29 during 2019, following identification by the FIU of registered with the FIU. This was a 9.3% increase in the gambling houses that had not previously been registered. number of DNFBPs registered with the FIU. The FIU has noted a continuous increase in the number At year end, the largest number of registered entities of registered NPOs, real estate agents and vehicle dealers. in a sector was 267, for non-profit organizations. This This expansion may be attributed to the heightened was closely followed by businesses operating in a free oversight the FIU has undertaken since 2015, as well as a zone with 266, real estate agents with 171, and vehicle rise in business activity in these sectors. dealers, with 169 registered entities. Collectively, these four sectors, at 873 registrations, accounted for 81% of The table below shows the number of DNFBPs registered registered DNFBPs. Of note, the number of casinos and by sector for the years 2017 – 2019.
TABLE 6: DNFBP REGISTRATION ACTIVITY BY SECTOR
REGISTRATIONS
SECTOR 2017 2018 2019 NEW 2019 DE- 2019 TOTAL TOTAL REGISTRATIONS REGISTRATIONS TOTAL Casinos 6 7 0 0 7 Gambling houses and 2 2 20 0 22 online gaming Real estate agents 139 150 25 4 171 Dealers in precious 29 30 9 1 38 metals and stones Non-Profit Organizations 194 224 49 6 267 Non-Governmental Organizations 44 47 2 1 48 Vehicle dealers 141 159 23 13 169 Other independent 3 4 6 0 10 legal professionals Lawyers/Notaries 58 55 7 4 58 Accountants 12 14 3 0 17 Auditors 7 7 0 1 6 Businesses operating 293 288 17 39 266 in a Free Zone
TOTAL 928 987 161 69 1079
35 REGISTERED DNFBPs BY GEOGRAPHICAL LOCATION
Reflecting the country’s population distribution and the The Corozal District accounted for second largest number location of commercial activity, the majority of registered of DNFBPs, with 278 or 26% of the country total. The DNFBPs were situated in the Belize District, with 440 or 247 business entities located in the Corozal Free Zone 41% of the total number of registered DNFBPs at the end accounted for 89% of the Corozal District total. The Cayo of 2019. Ongoing business and development activity in the District ranked third in registrations with 229 or 21% of islands of Ambergris Caye and Caye Caulker, two of the the total, while the Orange Walk District accounted for 55 main tourism resort areas and which are both included or 5% of the country’s registered DNFBPs. The numbers in the Belize District, accounted for just under 7% of all recorded for Stann Creek and Toledo were 48 or 4.4%, DNFBPs. and 29 or 2.6%, respectively.
FIGURE 9: REGISTERED DNFBPs BY GEOGRAPHICAL LOCATION
COROZAL 278 AMBERGRIS C AYE 65
ORANGE WALK CAYE CAULKER 55 BELIZE 8 367
C AYO 229 STANN CREEK 48
TOLEDO 29
36 ANNUAL REPORT 2019
REGISTRATION UPDATING
As indicated earlier, DNFBPs are required to update their 117 entities was carried over to 2020 as the required registration information on file with the FIU whenever information had not been provided in full. There had been there is material change in their ownership, management, no response to reminders sent to the other 172 entities business activities, or in their legal status. Despite the to update their registration information. At year-end, the obligation on the part of DNFBPs to inform the FIU of regulatory agencies (where one existed for these entities) material changes in their circumstances, the FIU has been and the Companies Registry were being consulted to taking the opportunity, at the time of collection of annual ascertain whether the entities were still active or had fees, to confirm the accuracy of registration information on ceased operations. Entities that have ceased operating will file; outreach sessions provided the opportunity to remind be de-registered. DNFBPs of the need to keep registration information updated; and each on-site examination was an occasion to Figure 10 below shows the number of registration updates verify the accuracy of DNFBP status reporting. by sector for 2018 and 2019. All sectors, apart from attorneys and auditors, showed increases in the number of At year-end 2019 there were 289 entities the updating registration updates for 2019. Total registration updates of whose records had not been completed during the for 2019 were 628 compared to 428 for 2018. year. Of that total, the updating process with respect to
FIGURE 10: REGISTRATION UPDATES BY SECTOR 2018-2019
200 188 180 160 157 140 120 96 99 100 90 80 76 63 68 60 40 40 40 2630 18 23 20 12 13 3 6 3 5 0 NPOS NGOS CASINOS ATTORNEYS IN A FREE ZONE VEHICLE DEALERS METALS STONES LEGAL PROFESSIONS REAL ESTATE AGENTS DEALERS IN PRECIOUS OTHER INDEPENDENT BUSINESSES OPERATING
ACCOUNTANTS AUDITORS RENEWALS 2018 RENEWALS 2019
37 DE-REGISTRATION PROCESS
New registrations, updating of existing registrations, and (iv) any of the DNFBP’s directors, senior of- de-registrations are processes that are required in keeping ficers, owners or their associates have the DNFBP register up-to-date, and in helping the FIU to committed a serious criminal act; or identify issues and potential problem areas in its overall supervision of DNFBPs. (v) it is in the public interest that the DNFBP be de-registered. An entity may be de-registered by the FIU for the following reasons: (d) Where a DNFBP applies to be de-registered for reason (a) or (b) above. (a) Where the DNFBP ceases to conduct business; There have been substantial increases in the number of (b) Where the DNFBP ceases to conduct activities de-registrations since 2017, when seven entities were de- that qualifies it as a DNFBP; registered (see Table 7). The de-registration process had been formalized during 2018, which enabled the FIU to (c) Where the FIU has reasonable grounds to believe increase substantially the number of entities removed from that: the register as a result of their ceasing to engage in specific “DNFBP” operations. In 2019 the FIU de-registered 69 (i) the DNFBP is in contravention of AML/ entities across eight sectors, compared with 31 from seven CFT legislation or has failed to satisfy sectors in 2018, in both years on the basis that they had any of its AML/CFT obligations; ceased to engage in specified DNFBP activities, although they may have continued to engage in other business. (ii) the DNFBP does not have the capacity The FIU received formal notification from directors or or willingness to comply with its AML/ owners, in response to written reminders to update their CFT obligations; registration information, that the entities were no longer engaged in DNFBP activities. (iii) the DNFBP or its business represents a significant ML/TF risk;
TABLE 7: DNFBP DE-REGISTRATIONS
YEAR NUMBER OF DE-REGISTRATIONS
2017 7
2018 31
2019 69
38 ANNUAL REPORT 2019
APPROVAL OF THE MONEY LAUNDERING COMPLIANCE OFFICER (MLCO)
Section 18 of the MLTPA requires all DNFBPs to appoint • Where appropriate, submitting STRs to the FIU; an MLCO. Applications for the appointment of MLCOs and are scrutinized by the FIU against “fit and proper” criteria, including a background check for previous criminal • Acting as liaison between the reporting entity and convictions, before they are approved or declined by the the FIU. FIU. With the steady increase in DNFBP registrations, there In sole-trader businesses, no application is required for the has been a continuous stream of applications for MLCO MLCO. The sole trader is deemed to be the MLCO for appointments. Table 8 below shows the number of annual the business. MLCO approvals in all sectors of DNFBPs from 2015 to 2019. In 2015 the FIU recorded a substantial number of One of the prescribed functions of the MLCO is MLCO approvals. This was a result of proactive efforts responsibility for oversight of the entity’s AML/CFT taken to register DNFBPs in 2014 and 2015 following the compliance program as set out in the MLTPA. To meet this passage of legislation in 2014 that expanded the range of responsibility, the MLCO should have an appropriate level entities classified as DNFBPs. With the new registrations of seniority within the organization, with some authority came an increase in applications for MLCO approvals in over other members of staff. Other responsibilities of a 2015. reporting entity’s MLCO include: The number of approved applications for MLCOs • Establishing and maintaining the reporting entity’s decreased by 65% in 2016 and 34% in 2017 as the majority manual of AML/ CFT compliance procedures; of DNFBPs had already been registered with the FIU. The number of applications and approvals since 2017 reflected • Receiving and considering internal reports on un- a combination of increases in the number of registered usual transactions and suspicious activities; DNFBPs and changes in MLCOs in entities already registered with the FIU.
TABLE 8: NUMBER OF MLCO APPROVALS
YEAR TOTAL
2015 299
2016 104
2017 69
2018 114
2019 163
39 AML/CFT EXAMINATIONS
The MLTPA requires all DNFBPs to implement an AML/ • Risk rating of customers: customers should be CFT compliance program. A typical AML/CFT compliance risk-rated based on the level of ML/TF risk they program should, at minimum, entail the following: present to the entity. Particular attention needs to be paid to Politically Exposed Persons (PEPs), • Business Risk Assessment: each reporting entity both domestic and foreign, and to country risk, should assess and clearly understand the ML/ TF especially where cross-border business transac- risks facing the business and should use that un- tions are involved. This area requires enhanced derstanding to prepare a risk management pro- due diligence. gramme and allocate compliance resources to mitigate the risks; • Appointing an MLCO and facilitating the activities of the MLCO; • Establishing Policies and Procedures: these would be part of the risk mitigation arrangements and • Providing AML/CFT training for all staff, including would be specific to the requirements of each regular refreshers; business operation. Policies and procedures should also be subject to independent review and • Monitoring transactions and reviewing files: the audit for effectiveness on a regular basis, and up- MLTPA requires ongoing monitoring of all busi- dated as needed; ness relationships and enhanced monitoring in cases of higher risk; • CDD: policies and procedures should be put in place in each entity to establish the bona fides of • Submitting Suspicious Transaction Reports to the customers, to understand customers’ business, FIU; and and to verify, on an ongoing basis, that customers’ business practices and transactions do not result • Maintaining records for a minimum period of five in AML/CFT difficulties for the entity. CDD is an years. ongoing activity; The actual set of procedures and practices in place will vary • Establishing sources of funds and sources of depending on a number of factors, including the DNFBP’s wealth of customers. This would be a specific as- level of ML/TF risk, size and type of business activities in pect of CDD; which it is engaged.
• Establishing and understanding the commercial rationale for customers’ business, business struc- tures or transactions.
40 ANNUAL REPORT 2019
DNFBP EXAMINATIONS AND OUTCOMES
During 2019, the FIU conducted a total of 31 on-site was of an accountant/auditor, three were of dealers in examinations across the DNFBP sectors as against 40 in precious metals and precious stones, and five were of real 2018. Of those examinations conducted, four were of estate agents. Of the eight sectors supervised by the FIU, casinos, five were of NPOs, one was of an NGO, nine were a sample of each sector was examined. These compared of vehicle dealers, three were of lawyers and notaries, one with the distribution in 2018 as shown in Table 9 below.
TABLE 9: DNFBP ON-SITE EXAMINATIONS BY SECTOR 2018 - 2019
SECTOR NUMBER OF EXAMINATIONS
2018 2019
Non-Profit Organisations 7 5
Non-Governmental Organisations 5 1
Vehicle Dealers 6 9
Lawyers/Notaries 6 3
Independent Legal Professionals 1 0
Accountants/Auditors 5 1
Dealers in Precious Metals and Precious Stones 4 3
Real Estate Agents 6 5
Casinos 0 4
Total 40 31
For examination purposes, entities were chosen using a profiles of the shareholders and directors of the entity, risked-based approach which took into consideration and the type of business activities in which the entity was factors such as income generated, location of the entity, engaged. international affiliations, client-base profile of an entity, risk
41 Except for casinos, which had undergone on-site x) With respect to casinos, the position examinations some years previously, no on-site examination was not much different: the AML/CFT had previously been conducted on the other DNFBP compliance manuals were not being entities that were examined in 2019. The following were updated, and there was little evidence the general findings in respect of the non-casino entities of an effective AML/CFT regime; that were examined during the year: xi) Staff members were not fully i) There were no manuals containing aware of specific casino-related AML/CFT policies and procedures, indicators of money laundering; and little evidence of the existence of other aspects of an AML/CFT regime; xii) There was no evidence of recent independent AML/CFT audits ii) Staff members were not having been conducted; acquainted with, nor aware of their obligations under, the MLTPA; xiii) While there were indications that suspicious activities were being iii) There was no evidence of the conduct noted and recorded, they were not of independent AML/CFT audits; being reported to the FIU; and
iv) Staff were not trained in AML/ xiv) There was no consistent monitoring CFT procedures; of client transactions.
v) In cases where an MLCO was in place, As indicated earlier, the high level of deficiencies generally there was no evidence of a formally noted in DNFBPs may be attributed to the small size of approved job description for the position; most entities in a relatively low-income environment, and to the challenges facing reporting entities as a result vi) There was minimal evidence of training of seeking to satisfy the AML/CFT requirements. In offered to MLCOs in guiding DNFBPs consequence, the supervisory authorities have been to satisfy AML/CFT obligations and engaged, on an ongoing basis, in helping reporting entities respect prohibitions under the MLTPA; to overcome the challenges. This approach led to the 2019 round of FIU inspections of DNFBPs, and to the start of vii) Staff members were not development towards year-end of a comprehensive aware of a STR process; programme to expand FIU supervision.
viii) There was no tool or procedure in place As stated above, except for casinos, the examinations to document and report unusual or conducted in 2019 were first-time reviews for the entities suspicious transactions to the MLCO; and that were examined in eight of nine sectors. During and following the examinations, entities were apprised of the ix) MLCOs were not generally familiar identified deficiencies. Written feedback was provided, with the need for DNFBPs to consult setting out the required remedial action, and including the UNSCR Sanctions List before timelines for completion. Follow-up visits are planned for establishing business relationships. 2020 and 2021.
42 ANNUAL REPORT 2019
OUTREACH AND AWARENESS
The FIU, with the active participation of the Compliance grant funding, including funding flows from abroad, but also Department, continued its efforts to deliver on its mandate on the relationships of some entities with cross-border to conduct outreach and stakeholder engagement to affiliates, to whom fees or other support payments were increase AML and CFT awareness in DNFBPs during sometimes made. An important objective was to sensitise 2019. Sessions covered AML/CFT obligations, the role and entities to the need to follow processes and procedures responsibilities of the FIU, and findings from the National that would reduce the chances of their being unwittingly Risk Assessment. involved in ML or TF activities.
The outreach sessions served to educate both private and The FIU participated in an awareness development session public sector participants on the nature of ML and TF; on specifically for the Development Finance Corporation. general and sector-specific indicators of money laundering The FIU’s presentation focused on ML/TF indicators for and the funding of terrorist activities; and on suspicious a financial institution, STR reporting, and identifying and transactions identification, monitoring and reporting. exercising enhanced due diligence with respect to PEPs.
Special outreach sessions were organised in Belize City FIU staff were pleased with the level of intervention and and Belmopan for FBOs, a sub-set of NPOs, focusing on participation by DNFBP staff members in all the outreach both ML and TF. This focus was developed based not only sessions held during the year. on the level of dependence of many of these entities on
ENHANCING SUPERVISORY ACTIVITIES
As a result of the nature of the responses from reporting effectiveness outcomes are critical if the FIU is to deliver entities during outreach and awareness activities on its mandate and if Belize is to meet its international undertaken in 2019 by the FIU and its partner supervisory obligations in this area. Improved performance within agencies, together with the findings from the on-site DNFBPs will require increased knowledge, capacity and examinations of DNFBPs, the Compliance Department focus in satisfying their AML/CFT obligations, and there was, at year-end, developing an enhanced outreach and will be need to develop teaching and training capacity in supervision program to assist DNFBPs to meet their the wider to society to achieve this objective. obligations under the MLTPA. High levels of AML/CFT
43 INVESTIGATIONS and PROSECUTIONS
The FIU is mandated under the FIU Act to investigate border cooperation among law-enforcement agencies now and prosecute financial crimes, including offences that permit the rapid acquisition, analysis, and cross-referencing are predicate to or which involve ML and TF. At year of a broad range of intelligence. In addition, investigators end, the FIU Investigations Department consisted of four are able to obtain orders for the production of potential Investigators, three of whom, including the Department evidence material, for the interception and monitoring Head, were attached from the BPD. of communications, and for the freezing of accounts and assets. The major role of investigators at the FIU is to gather evidence pertaining to suspected financial crimes; if During the year, 31 cases, some involving more than one appropriate, criminally charge those who may be engaged alleged offence, were investigated for money laundering in breaking the law, and prepare case files for forwarding and related predicate offences. Seventeen of these cases to prosecutors for criminal prosecution of those charged. were investigated by the FIU, with six of the 17 involving In order to investigate ML and TF, FIU staff members utilize assistance from other agencies (see Appendix 1). The specialized techniques and procedures. The standard other 14 cases were investigated by the FCWG (see techniques involve interviews, searches, the recording Appendix 2). Of the 17 cases investigated by the FIU in of witness statements, and the accumulation and use of 2019, at year-end eleven were still under investigation, and electronic evidence; current technology and close cross- six had been closed.
FINANCIAL CRIMES WORKING GROUP
As stated earlier, the FCWG was formed in 2017 by of members. During 2019, the FCWG met seven times, NAMLC. The group is chaired by a member from the and considered 14 specific cases apart from more general BPD with the Senior Investigator of the FIU serving as issues. Of the 14 cases considered, two were closed Deputy Chairperson. As indicated in the section on the without further action being taken, and five were being NAMLC, the group includes several NAMLC member heard by the Court at year-end (see Appendix 2). agencies, and comprises: the BPD; the FIU; the Office of the DPP; the Belize Tax Service Department; the The 31 cases investigated during 2019 involved 16 types Customs and Excise Department; the Department of of offences. Figure 11 below shows the types of alleged Immigration and Nationality Services; and the IFSC. The offences, apart from those involving initial cash seizures as FCWG’s coordinated objectives include pursuing money shown in Table 10-, which resulted in action being taken laundering and related predicate offence cases, recovering by the FIU, in coordination with other law enforcement the proceeds of crime, sharing learned experiences from agencies. case development, and improving the operational capacity
44 ANNUAL REPORT 2019
FIGURE 11: TYPES OF ALLEGED OFFENCES INVESTIGATED IN 2019
45 Section 38 of the MLTPA authorises the seizure of cash by “Source of Funds Queries”) shows four instances where Customs or Police officers where officers have reasonable action was taken when cash was suspected by authorities grounds to suspect that the cash represents the proceeds to be proceeds of crime. The cases were closed without of crime as defined in that section. In addition to the charges being laid, as the persons involved were able to matters listed in Figure 11 above, Table 10 below (titled establish the legitimacy of the source of funds.
TABLE 10: SOURCE OF FUNDS QUERIES
NO. AGENCY NATIONALITY LOCATION CASH VALUE CASE INVOLVED STATUS
1. FIU/BPD Indian Philip Goldson USD 20,000.00 Closed International Airport Source of Funds Established
2. FIU/BTS Belizean San Pedro Town BZD 184,000 Closed
Source of Funds Established
3. FIU Belizean Orange Walk Town BZD 34,000 Closed
USD 5,000 Source of Funds MXN 122,000 Established
GTQ 7,000
4. FIU/BPD Belizean Belize City BZD 7,000 Closed
Source of Funds Established
46 ANNUAL REPORT 2019
Investigative Tools
PRODUCTION ORDER
An Order issued by the Supreme Court, requiring the production of documents, devices or information that may assist the Police or an authorized officer of the FIU in investigations in relation to suspected ML/TF offences.
MONITORING ORDER
An Order issued by the Supreme Court, directing a reporting entity(s) to provide the Police or the FIU with information for a specified period of time regarding transactions conducted through accounts held by a particular person(s) who is reasonably suspected to have committed, is about to commit, or was involved in, or has benefited or is about to benefit directly or indirectly, from the commission of an offence.
INTERCEPTION OF COMMUNICATIONS ORDER
An Order issued by the Supreme Court, requiring communication service providers to intercept and retain specified communications or communications of a specified description, received or transmitted, and to further allow the Police or the FIU to enter the providers’ premises to install devices to intercept and retain specified communications or communications of a specified description related to ML/TF investigations.
FREEZING ORDER
An administrative order issued by the FIU to any reporting entity to freeze for seven business days funds or other financial assets or economic resources of any person or entity, to facilitate any investigation, prosecution or proceedings for ML/TF offences. An application must be made to the Supreme Court to extend a freezing order beyond seven business days.
47 47 DOMESTIC AND INTERNATIONAL COOPERATION
Coordination and cooperation at the national, regional During 2019, the FIU received 80 Requests for Information and international levels are fundamental in the global (RFIs) which was a noticeable reduction, compared to fight against ML/TF, given the ease with which people and 2018, 2017 and 2016 when 111, 110 and 135 requests, financial resources can cross borders. In order to play its respectively, were received. Local law enforcement agencies part in strengthening mutual support, Belize continued to accounted for 16 of the RFIs received. The remaining 64 collaborate and coordinate activities with domestic and were received from foreign FIUs and law enforcement external agencies and institutions during the year. Both the agencies (see Figure 12). MLPTA and the FIU Act provide for the FIU to be able to undertake domestic and international cooperation and collaboration. RFIs Su mission 2016 - 2019
FIGURE 12: RFIs SUBMITTED TO THE FIU BELIZE 120
100 105 80 94 94 60
40 64 20 30 0 16 17 16 2016 2017 2018 2019
DOMESTIC INTERNATIONAL
DOMESTIC RFIs
As mentioned previously, the FIU worked closely with local agencies, while two originated with Interpol Belize. other local law enforcement authorities, both through The RFIs were related to investigations of cases such as NAMLC and the FCWG and on an individual basis, as part theft, obtaining property by deception and other serious of the process of sharing financial intelligence to move predicate offences investigations forward. During the period under review a total of sixteen formal requests to the FIU for information came through domestic agencies, fourteen originating from
48 ANNUAL REPORT 2019
INTERNATIONAL RFIs
A total of 31 countries sent 64 RFIs to the FIU in 2019. Of A number of countries (including China, Gabon, Germany, that total, 12 countries accounted for 44 or just under 70% Ghana, Japan, Mongolia, the Netherlands, and Senegal) of the RFIs sent. These countries were the United States of submitted RFIs in 2019 for the first time since 2015. For a America (11), Russia (7), Germany (5), Malta (3), Monaco detailed listing of countries that submitted RFIs to the FIU (3), United Kingdom (3), China (2), Croatia (2), Kyrgyz during the period 2016 to 2019 please refer to Appendix Republic (2), Latvia (2), Lithuania (2), and Macedonia (2). 4.
FIGURE 13: RFI SUBMISSIONS Countries su mittin RFIs to t e FIU in 2019
C ina 3 Croatia USA 4 17 Germany 8 Kyr Re u lic Unite 3 Kin om Lat ia 5 3 Lit uania 3 Mace onia Russia 3 11 Malta 5
Monaco 5
Ot ers 30
INFORMATION REQUESTS BY AREA OF INTEREST
Continuing the trend of the three previous years, various from the FIU. The following table shows the areas of areas of interest, mostly involving suspected criminal interest in respect of which information was requested. activity, were reflected in external requests for information
49 TABLE 11: RFIs BY AREA OF INTEREST 2016 – 2019
CLASSIFICATION 2016 2017 2018 2019
Bribery 1 3 3 0
Corruption 2 6 2 0
Cyber Crime 1 0 0 0
Background Check 16 2 8 0
Drug Trafficking 3 0 4 3
Embezzlement 5 4 6 0
Fraud 18 26 24 12
Insider Trading 1 0 0 0
Money Laundering 43 30 32 29
Murder 1 1 1 0
Organized Crime 1 0 0 0
Proceeds from Crime 1 0 0 0
Sex Crime 0 0 0 1
Suspicious Transaction Reports11 24 6 0 0 Tax Evasion 2 6 11 2
Terrorist Financing 2 4 0 3
Theft 2 1 15 1
Other 12 21 5 7
TOTAL 135 110 111 5812
n line with the trend of the three previous years, “money year-to-year volatility characterised the number of laundering” was the most common area of interest, requests in the last two identified categories. followed by “fraud”, “theft”, and “tax evasion”; although
11 Category now reported as “Money Laundering” or “Terrorist Financing”.
12 Six of the 64 external Requests for Information received in 2019 did not identify an interest area category. In previous years some requests covered more than one area of interest.
50 ANNUAL REPORT 2019
PRESENTATIONS, TRAINING and MEETINGS
In addition to presentations and focused outreach sessions the FATF Recommendations; to a special session on the for entities from DNFBP entities reporting directly to the NRA for members of the Bar; and to a three day session FIU, staff members of the Unit were involved in a number for law enforcement agencies, led by the US military, on of other meetings and workshops, either as organisers and Belize’s border security issues. Of particular note was presenters, or as participants, or sometimes both, in sessions a three-day session on financial investigative techniques organised or sponsored by itself or other agencies. These for law enforcement agency personnel conducted by an were designed either to expand participants’ knowledge Economic Crimes Team from the US Treasury that has of ML/TF threats and vulnerabilities affecting Belize, or to been providing support to Belize on AML/CFT issues in improve their capacity to address the associated risks. The recent years; and an extended session in May on the NRA workshops and seminars ranged from sessions held for for all reporting entities under the MLTPA. staff members of Government agencies; to an AML/CFT workshop jointly sponsored by the Belize International Appendix 3 lists presentations, training sessions and other Financial Services Association and Moore Stephens financial system development activity in Belize which the International for the local private sector; to co-sponsorship FIU led or participated in along with the other domestic of a three-day CFATF workshop for 60 private and public AML/CFT supervisory or law enforcement agencies in sector participants aimed at providing an understanding of Belize, or with private sector interests.
OVERSEAS TRAINING
Along with local training sessions held in Belize, FIU staff improving the operational efficiency and effectiveness of members also participated in overseas training courses the FIU in carrying out its mandate. Table 12 below lists and workshops. Participation in the training sessions the overseas programmes in which FIU staff members was not only intended to develop staff members’ skills participated during the year. in particular, but was also expected to reduce regulatory risks through identifying possible supervision gaps, and by
51 FIT TRAINING
AML TRAINING FOR MONEY SERVICES BUSINESSES
CFATF STANDARDS TRAINING FAITH BASED ORGANISATIONS PRESENTATION
52 ANNUAL REPORT 2019
TABLE 12: OVERSEAS TRAINING WORKSHOPS ATTENDED BY FIU STAFF MEMBERS
DATE WORKSHOP MAIN ORGANISERS OR NATURE OF OR SEMINAR PARTICIPANTS FACILITATORS EVENT
May Accreditation and Investigations Dept. EU/CFATF Training Training: Open Source Internet Investigations Bahamas
May Egmont Advanced Strategic Analysis Dept. Egmont Training Analysis Course Trinidad & Tobago
May EU-CELAC Exchange of Investigations Dept. COPOLAD-EU Training Best Practices COPOLAD: Money Laundering and Spain Asset Recovery
August Regional Workshop on Investigations Dept. UNODC Training Investigative Techniques Panama
August CFATF Assessors Training Compliance Dept. CFATF Training
Barbados
November Countering the Investigations Dept. World Bank Antigua & Barbuda Financing of Terrorism
December Multi-Sector Collaboration Risk Assessment, and EU – World Bank Trinidad & Tobago to improve NPO Compliance Depts. Compliance with FATF Standards
53 OVERSEAS CONFERENCES AND MEETINGS
Staff members of the FIU also participated in overseas conferences and meetings during 2019. The following table lists the meetings and conferences that were held outside of Belize which were attended by staff members.
TABLE 13: OVERSEAS MEETINGS AND CONFERENCES ATTENDED BY FIU STAFF MEMBERS
DATE FIU NATURE OF CONFERENCE ORGANISERS LOCATION PARTICIPANTS OR MEETING OF EVENT
February Director and 2nd Annual Belize Investment Forum Belize-American Houston, Texas, USA Strategic Consultant Chamber of Commerce
April Director and Meeting of Heads of Egmont FINTRAC, Miami, Florida, USA Deputy Director FIUs: Americas Region FIU Argentina
April Director US-Central America: Public-Private US Treasury, Washington DC Dialogue on Correspondent Banking Central Bank of Panama
May Director, Deputy CFATF Plenary and Working CFATF Trinidad & Tobago Director and NRA Group Meeting Coordinator
June Deputy Director, Cyber-Network Conference CARSI – US Washington DC Analyst and Embassy Investigator
August Director CFATF Steering Group and XI CFATF Miami, Florida, USA Council of Ministers Meeting
November Director, Deputy CFATF Plenary and Working CFATF Antigua & Barbuda Director, and NRA Groups Meeting Coordinator
December Director US-Central America: Dialogue Ministry of Finance, Panama on Correspondent Banking Panama; Central Bank of Panama; US Treasury
54 ANNUAL REPORT 2019
APPENDICES
APPENDIX 1: CASES INVESTIGATED BY THE FIU DURING 201913
NO. INVESTIGATING SUSPECTED OFFENCE SUSPECTED/ CASE STATUS AGENCY OFFENCE CHARGED APPROXIMATE VALUE INVOLVED
1.* FIU Theft, Money Laundering N/A Unknown Under Investigation
2.* FIU/BPD Fraud, Money Laundering N/A Unknown Under Investigation
3.* FIU/BPD Theft, Money Laundering N/A BZD 54,000 Under Investigation
4.* FIU/BPD Theft, Money Laundering N/A Unknown Under Investigation
5.* FIU/BPD Money Laundering Money BZD 1,000 Under Investigation Laundering USD 66,000
GTQ 15
6. FIU Fraud, obtaining property N/A USD 803,000 Under Investigation by deception and Money Laundering
7. FIU Money Laundering N/A BZD 33,000 Closed
No charges instituted.
8. FIU Money Laundering N/A BZD 20,000 Under Investigation
9. FIU Money Laundering N/A BZD 15,000 Closed
No charges instituted
13 Values involved are subject to change as investigations and Court hearings progress.
55 10. FIU Theft, Obtaining N/A BZD 300,000 Closed property by deception No charges instituted
11. FIU Fraud, Obtaining N/A BZD 28,000 Under Investigation property by deception
12. FIU Fraud, obtaining N/A BZD 30,000 Closed property by deception No charges instituted
13. FIU Fraud, obtaining N/A BZD 50,000 Under Investigation property by deception
14. FIU Uttering a False N/A BZD 8,000 Closed Document No charges Instituted
15. FIU Tax Evasion N/A BZD 1,122,000 Under Investigation
16. FIU/BPD Money Laundering N/A USD 20,000 Under Investigation
17. FIU/CED/ID Money Laundering, Illegal Money USD 14,000 Closed Entry, Customs Offenses Laundering, Illegal Entry, BZD 1,000 Money Laundering Customs case dismissed, Illegal Offenses GTQ 200 Entry and Customs Offenses guilty plea.
*Cases brought forward from 2018
56 ANNUAL REPORT 2019
APPENDIX 2 – CASES INVESTIGATED WITH THE ASSISTANCE OF THE FCWG14
No. Investigating Suspected Offence Offence Charged Suspected/ Case Status Agency Approximate Value Involved
1.* FIU/FCWG Theft, Money Laundering N/A BZD 1,731,0006 Under Investigation
2. FIU/FCWG Obtaining property N/A BZD 119,000 Under by deception, Theft, Investigation money laundering
3.* FIU/FCWG Uttering a false Uttering a false document, BZD 8,000 Matter before document, theft and theft and obtaining the court obtaining property property by deception by deception
4.* FIU/FCWG Obtaining property by obtaining property by USD 289,000 Matter before deception, uttering a deception, uttering a the court. false document, theft, false document and money Laundering obtaining a money transfer by deception
5.* FIU/FCWG Obtaining property by N/A USD 552,000 Under deception, uttering a Investigation false document, theft, Money Laundering
6.* FIU/FCWG Theft, Money Laundering Theft BZD 85,000 Theft matter before the court, money laundering matter still under investigation.
7. FIU/FCWG Money Laundering N/A N/A Under Investigation
14 Suspected/Approximate Value increased from 2018 as a result of ongoing investigations * Cases brought forward from 2018.
57 8.* FIU/FCWG Theft, Fraud, Money N/A BZD 189,000 Under Laundering Investigation
9. FIU/FCWG Theft, Money Laundering N/A BZD 54,000 Under Investigation
10.* FIU/FCWG Human Trafficking, Human Trafficking BZD 30,000 Closed. Money Laundering Charges Struck Out
11. FIU/FCWG Carrying on Carrying on USD 74,500 Matter before moneylending business moneylending business the court. in Belize without in Belize without holding MXN 1,698,500 holding a valid a valid Moneylenders Moneylenders license license granted by granted by the Registrar the Registrar of of Moneylenders Moneylenders
12.* FIU/FCWG Theft, Money Laundering N/A BZD 498,000 Under Investigation
13 FIU/FCWG Tax Offences N/A BZD 30,000 Closed
No charges instituted
14. FIU/FCWG Suppression Suppression of N/A Matter before of documents, documents, Concealment the court. Concealment of of documents, Failure documents, Failure to to disclose, Failure to disclose, Failure to assist, assist, Obstruction, Obstruction, Giving Giving false information. false information.
58 ANNUAL REPORT 2019
APPENDIX 3: WORKSHOPS AND PRESENTATIONS IN BELIZE INVOLVING THE FIU - 2019
Date Workshop or Seminar Main Participants Organisers or Nature of Facilitators Event
January Client Due Diligence BELTRAIDE FIU Training Procedures
February OECD Common Private and Public BIFSA, Belize Tax Training Reporting Standards Sector Entities Service, FIU
February Financial Structures and Law Enforcement Agencies UNODC Training Laundering Methods
May Introduction to Anti-Money Moneylenders and CBB, FIU Training Laundering Practices Pawnbrokers
May National Risk Assessment All Reporting Entities FIU, CBB, Presentation and OSIPP, IFSC Discussion of NRA Findings
June Introduction to AML/ Customs and Excise Dept. CBB, FIU Training CFT Practices
June Introduction to AML / Development Finance CBB, FIU Training and CFT Practices Corporation Sensitisation
June Financial Investigative Law Enforcement Agencies Economic Crimes Training Techniques: Asset Team, Office of Forfeiture Workshop Technical Assistance, US Treasury, FIU
July Workshop on Single Public Sector Agencies World Customs Presentation Electronic Window Organisation, Forum Customs and Excise Dept
August AML/CFT for the Insurance Companies, ORINCO, OSIPP, FIU Training Insurance Industry Agents, and Brokers
59 August AML/CFT Obligations of Faith-based Organisations FIU, BPD, SSB, Presentation Faith-based Organisations Labour Dept., Belize Forum Tax Service Dept., Immigration and Nationality Dept., Companies Registry
August Introduction to AML/ Credit Unions CBB, FIU Sensitisation CFT Practices and Training
August Customer Due Diligence Insurance Company FIU Presentation and the Role of the FIU
September Introduction to AML Practices Money Services Businesses CBB, FIU Training
September Sources of Information Law Enforcement Agencies Office of Technical Training in Money Laundering Assistance, US Investigations Treasury, BPD, FIU
November Currency Movement Customs and Excise Dept. FIU Training Reporting to the FIU
November National Financial Public and Private Sector CBB Project Launch Inclusion Strategy Financial, Regulatory and Communications Agencies
November Identification of Counterfeit Law Enforcement Agencies US Embassy Training US Currency
November FATF Standards Training All Reporting Entities, AML/ CFATF, FIU Presentations CFT Supervisory Agencies and Training
November Forum on Capital Markets Financial Sector Agencies, CBB, BCCI Presentation Development in Belize Private Business Sector Forum
December AML/CFT Seminar Private Sector Entities BIFSA, Moore Seminar Trinidad, FIU
December National Risk Assessment Bar Association FIU Presentation
December AML/CFT Due Diligence Commercial Banks CBB, FIU Training Procedures
December Workshop of Belize Law Enforcement and US Embassy, National Sensitisation Border Security Military Agencies Security Council Workshop
60 ANNUAL REPORT 2019
APPENDIX 4: DETAILED LISTING OF RFIS BY COUNTRY 2016 - 2019
NO. COUNTRY 2016 2017 2018 2019
1. Albania 0 0 3 0
2. Anguilla 1 0 0 0
3. Argentina 2 0 0 1
4. Armenia 1 0 0 0
5. Aruba 0 0 1 0
6. Austria 2 2 0 0
7. Azerbaijan 0 1 0 0
8. Bangladesh 4 3 0 0
9. Belarus 0 1 0 0
10. Belgium 1 1 0 1
11. Brazil 0 0 2 0
12. Bulgaria 3 2 1 0
13. Canada 3 4 4 0
14. Cayman Islands 0 0 3 0
15. China 0 0 0 2
16. Costa Rica 1 1 0 0
17. Croatia 1 2 0 3
18. Cyprus 4 1 0 0
19. Czech Republic 4 2 1 0
20. Denmark 0 0 1 0
61 21. Ecuador 0 6 3 0
22. El Salvador 1 0 0 0
23. Estonia 0 1 0 0
24. France 2 1 2 1
25. Gabon 0 0 0 1
26. Germany 0 0 0 5
27. Ghana 0 0 0 1
28. Greece 0 0 1 0
29. Guatemala 2 0 0 0
30. Hungary 1 1 2 0
31. India 0 0 1 1
32. Isle of Man 0 1 0 0
33. Israel 2 0 0 1
34. Italy 0 2 1 0
35. Japan 0 0 0 1
36. Jersey 0 0 1 0
37. Jordan 0 1 0 0
38. Kazakhstan 0 1 1 1
39. Kyrgyz Republic 1 0 0 2
40. Latvia 1 2 0 2
62 ANNUAL REPORT 2019
41. Lithuania 5 3 2 2
42. Luxembourg 0 2 0 0
43. Macedonia 0 0 1 2
44. Malta 0 1 2 3
45. Monaco 0 0 1 3
46. Mongolia 0 0 0 1
47. Montenegro 4 2 2 0
48. Nepal 1 0 0 0
49. Netherlands 0 0 0 1
50. New Zealand 1 0 0 1
51. Panama 2 5 5 1
52. Paraguay 0 0 1 0
53. Philippines 1 1 0 0
54. Poland 1 0 0 1
55. Romania 2 3 1 1
56. Russia 15 5 9 7
57. San Marino, Republic of 0 1 1 0
58. Serbia 0 0 1 1
59. Senegal 0 0 0 1
60. Seychelles 1 0 1 0
61. Slovakia 1 0 1 0
63 62. Spain 0 2 0 1
63. Sri Lanka 0 1 0 0
64. St. Lucia 1 0 0 0
65. St. Vincent & Grenadines 1 0 1 0
66. Switzerland 2 0 2 0
67. Syria 0 3 0 0
68. Tajikistan 0 1 1 0
69. Thailand 0 2 0 0
70. Turkmenistan 0 1 0 1
71. Turks and Caicos Islands 1 0 0 0
72. Ukraine 12 8 6 0
73. United Kingdom 4 7 9 3
74. United States of America 14 10 18 11
75. Venezuela 0 0 1 0
Total 106 94 94 64
64 ANNUAL REPORT 2019
65 En uiries relate to t is re ort s oul e a resse to:
THE DIRECTOR Financial Intelli ence Unit - Beli e
4998 Coney Dri e Business Pla a Coney Dri e P O Bo 2197 Beli e City Beli e (501) 223-2729 / 223-0596 (501) 223-2531 fiu eli e fiu eli e or fiu eli e or
ANNUAL 2019 | REPORT