Countries/Jurisdictions of Primary Concern - Belize
Belize is not a major regional financial center; however, it has a substantial offshore financial sector. Belize is a transshipment point for marijuana and cocaine, and human trafficking is a concern. 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. The Government of Belize continues to encourage offshore financial activities that are vulnerable to money laundering and terrorist financing, 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.
In 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 action plan to address those deficiencies. In June 2015, the CFATF noted that Belize has made substantial progress and removed it from the Public Statement.
Belizean officials suspect there is money laundering activity in their two free trade zones, known as commercial free zones (CFZs). 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, is located on the western border with Guatemala. The Corozal CFZ is 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.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: //2009-2017.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
Are legal persons covered: criminally: YES civilly: NO
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: 216: January 1 - November 15, 2015
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: 1 in 2015
Convictions: 1 in 2015
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:
Over the last three years, Belize made a turnaround in strengthening its legal infrastructure for oversight of the financial industry. Political will and involvement of different levels of government and public sector agencies as well as the private sector continue to be key elements in the reform process.
In addition to 2014 amendments to several acts, regulations were also promulgated or strengthened to include: Designated Non-Financial Business or Profession (DNFBP) Regulation; International Financial Services Commission; National Anti-Money Laundering regulations; Gaming – administrative penalty regulations; and the Misuse of Drugs Order. Belize’s financial intelligence unit (FIU) worked with international donors to draft the new Proceeds of Crime Legislation. Despite the new laws and regulations, some international experts have said experienced staff and political will to use the new tools to actually implement an assertive program of investigation and prosecution are still necessary. There was reportedly one money laundering prosecution and conviction in 2015.
The FIU continues to have ongoing organizational issues, and there is currently only one less-experienced attorney to prosecute cases. 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. There is limited assistance from other law enforcement agencies, governmental departments, and regulatory bodies. The FIU is improving awareness of AML/CFT programs and has conducted training events for many businesses, including those in the CFZs. The FIU is reportedly in discussions with the Belize Police Department, special police units, and the Comptroller of Customs to develop a memorandum of understanding to support intelligence sharing and more integrated operations.
In 2014, the U.S. Government, with assistance from Belize’s FIU, indicted six corporate executives and six corporate entities for orchestrating a $500 million offshore asset protection, securities fraud, and money laundering scheme. In a related action, the FIU froze assets of a company associated with the U.S. prosecution, but in November 2014, Belize’s Chief Justice ordered the FIU to release those assets due to insufficient evidence to justify the continued freezing of those accounts. The local case has floundered.
While the Government of Belize is commended for its recent legislative and regulatory work, it should also demonstrate its commitment by providing additional resources, training, and political will to effectively enforce the country’s enhanced AML/CFT regime. Its loosely monitored offshore financial sector continues to be a concern. Furthermore, the historically low prosecution and conviction figures reflect the lack of robust enforcement efforts. The government should ensure its investigative, prosecutorial, and judicial personnel have the capacity and resources to successfully fulfill their responsibilities. Belize should become a party to the UN Convention against Corruption.