Sint Maarten is lax against money laundering and terrorist financing, according to FATF.
The Dutch cabinet is very upset about that, but cannot impose anything on the island.
The statement can scare banks and harm investors’ confidence.
Sint Maarten received an official reprimand on Thursday for its structurally lax action against money laundering and terrorist financing. Despite repeated promises, the government of the windward island has missed deadline after deadline and failed to put its legislation in this area in order, judges the Caribbean branch of the international anti-money laundering organization FATF.
The reprimand, also known as a ‘public statement’, had been hanging over the market for months and means that Sint Maarten is considered ‘risk to the international financial system’ due to its strategic shortcomings. With its many casinos, the island is considered a money laundering paradise, and has been under strict surveillance for two years due to its inability to comply with international guidelines.
“Blemish on the Kingdom”
The Dutch cabinet is very upset with that miserable state of affairs: Although Sint Maarten is part of the Kingdom of the Netherlands, it has an autonomous government and The Hague cannot impose anything on the island. ‘The Netherlands, on the other hand, is very active in being the best boy in the class to combat money laundering. And this is a blight on the entire Kingdom, “says Bob Hoogenboom, professor of forensic business studies at Nyenrode University. “We are being looked at internationally.”
Reprimand can also have repercussions for the 40,000 islanders: the statement can scare banks and undermine investor confidence. “This undermines the investment climate on the island, and the timing is extremely bad,” says Hoogenboom. He emphasizes that the island is still fully recovering from the devastating hurricane Irma from 2017, and that reconstruction is now being made more difficult.
Payments are more expensive and slower
When asked, Public Prosecutor Danny Hazejager says that he expects international payments on the island to become more expensive and slower as a result of the intervention; banks have to carry out extra checks and are placed under the magnifying glass of supervisors because they are doing business on Sint Maarten, which is now regarded as a risk country in a certain sense. Banks could even pull their hands off the island. “Such a warning is in fact the front porch of the blacklist that also includes Iran and North Korea,” said Hazejager, who is also a member of the Anti-Undermining Team.
SP Member of Parliament Ronald van Raak calls the reprimand ‘disastrous’ and says that Sint Maarten is ‘left to the mafia’ by local politicians. “The government is largely corrupt and has been working for years to train anti-money laundering and block it out of self-interest.” Van Raak is gradually finding the time ripe for intervention by The Hague.
State Secretary Raymond Knops of the Ministry of the Interior does not seem to have any legal basis for this: although in response to parliamentary questions in July he already stated that he found the lack of progress on Sint Maarten ‘worrying’ and would continue to monitor the situation closely, he then emphasized. also that Sint Maarten is an autonomous country within the Kingdom and that it “is responsible for guaranteeing the recommendations in legislation.”
That opinion is also shared by VVD MP André Bosman. ‘The Netherlands can jump high or low. If the government of Sint Maarten does not get ready to do anything and the country wants to help, it is for their own account. ” Bosman focuses his hopes on the elections scheduled for January 2020. ‘They are now driving into the gorge. But with that the chance of refreshing the government is also greatest. ”