Countries/Jurisdictions of Primary Concern - Belize
While Belize is not a major regional financial center, it is an offshore financial center. In an attempt to diversify Belize’s economic activities, the Government of Belize encouraged the growth of offshore financial activities that are vulnerable to money laundering, including offshore banks, insurance companies, trust service providers, mutual fund companies, and international business companies. The Belizean dollar is pegged to the U.S. dollar, and Belizean banks continue to offer financial and corporate services to nonresidents in the offshore financial sector.
Belizean officials suspect there is money laundering activity in their two free trade zones, known as commercial free zones (CFZ). The larger of the two, the Corozal Commercial Free Zone, is located on the border with Mexico. The smaller CFZ, the Benque Viejo Free Zone, recently started operating on the western border with Guatemala. The Corozal Commercial Free Zone was designed to attract Mexican citizens for duty free shopping; Belizean authorities believe it is heavily involved in trade-based money laundering and the illicit importation of duty free products.
As Belize is a transshipment point for marijuana and cocaine, there are strong indications that laundered proceeds are increasingly related to organized criminal groups involved in the trafficking of illegal narcotics, psychotropic substances, and chemical precursors.
In May, and again in November 2013, the Caribbean Financial Action Task Force (CFATF) included Belize in its Public Statement for not making sufficient progress in addressing AML/CFT deficiencies and not complying with its AML/CFT action plan to address those deficiencies. The CFATF called upon its members to consider instituting countermeasures to protect their financial systems from the money laundering/terrorism financing risks emanating from Belize.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: http://www.state.gov/j/ct/rls/crt/
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR ILLEGAL DRUG SALES THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
“All serious crimes” approach or “list” approach to predicate crimes: Combination approach
Are legal persons covered: criminally: YES civilly: YES
KNOW-YOUR-CUSTOMER (KYC) RULES:
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES
KYC covered entities: Domestic and offshore banks; venture risk capital; money brokers, exchanges, and transmission services; moneylenders and pawnshops; insurance; real estate; credit unions; building societies; trust and safekeeping services; casinos; motor vehicle dealers; jewelers; international financial service providers; public notaries; attorneys; accountants and auditors
Number of STRs received and time frame: 117: January 1 - November 25, 2013
Number of CTRs received and time frame: Not applicable
STR covered entities: Domestic and offshore banks; venture risk capital; money brokers, exchanges, and transmission services; moneylenders and pawnshops; insurance; real estate; credit unions; building societies; trust and safekeeping services; casinos; motor vehicle dealers; jewelers; international financial service providers; public notaries; attorneys; accountants and auditors
MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:
Prosecutions: 6: October 2012 – November 2013
Convictions: 6: October 2012 – November 2013
RECORDS EXCHANGE MECHANISM:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Belize is a member of the CFATF, a FATF-style regional body. Its most recent mutual evaluation can be found at: https://www.cfatf-gafic.org/index.php?option=com_docman&task=cat_view&gid=352&Itemid=418&lang=en
ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:
Belize’s August 2012 Domestic Banks and Financial Institution Act strengthens internal AML controls. The Act improves provisions to govern domestic banks and financial institutions by strengthening the supervisory powers and regulatory independence of the Central Bank. It addresses deficiencies and vulnerabilities in the domestic banking sector, and provides for the appointment of a statutory license administrator, where appropriate, to protect the interests of depositors, creditors, and shareholders. While the Act enhances the Central Bank’s control of domestic banks and financial institutions, Belize should determine how the act can be used to strengthen money laundering investigations and prosecutions.
The government also should provide additional resources to effectively enforce AML regulations. The FIU is responsible for enforcement and implementation of all financially-related regulations as well as international sanctions lists, domestic tax evasion, and all money laundering investigations. There is limited assistance from other law enforcement agencies, governmental departments, and regulatory bodies. The FIU has a broad mandate and a small staff, and does not have sufficient training or experience in identifying, investigating, reviewing, and analyzing evidence in money laundering cases. Prosecutors and judges should receive additional training on financial crimes, including money laundering, to increase prosecutions. The FIU currently contracts outside attorneys for prosecutions.
The prime minister and other government officials made public statements supportive of the U.S. Department of the Treasury’s Office of Foreign Assets Control’s 2013 designations of Belizeans, and all local banks comply and prohibit business with the designated entities. Belize’s financial institutions were cited for not performing due diligence in screening their customers and prohibiting financial transactions with shell banks. The prime minister stated his intentions for the government to be compliant with international AML/CFT recommendations.
Belize should become a party to the UN Convention against Corruption.