Strategy Report Volume II Money Laundering and Financial Crimes March 2017. Sint Maarten.

United States Department of State

Bureau for International Narcotics and Law Enforcement Affairs

International

Narcotics Control

Strategy Report

Volume II

Money Laundering and Financial Crimes

March 2017

 

 

Sint Maarten

OVERVIEW

Sint Maarten is an autonomous entity within the Kingdom of the Netherlands. The Kingdom retains responsibility for foreign policy and defense, including entering into international conventions. The Kingdom may extend international conventions to the autonomous countries. With the Kingdom’s agreement, each autonomous country can be assigned a status of its own within international or regional organizations subject to the organization’s agreement. The individual countries may conclude MOUs in areas in which they have autonomy, as long as these MOUs do not infringe on the foreign policy of the Kingdom as a whole. In 1999, the Kingdom extended the UN Drug Convention to Sint Maarten, and in 2010, the UNTOC was extended to Sint Maarten.

A governor appointed by the King represents the Kingdom on the island and a Minister Plenipotentiary represents Sint Maarten in the Kingdom Council of Ministers in the Netherlands.

In June 2016, Aruba, Sint Maarten, the Netherlands, and Curacao signed an MOU with the United States to stimulate joint activities and enhance sharing of information in the areas of criminal investigation and upholding public order and security and to strengthen mutual cooperation in forensics and the organization of the criminal justice system. While the MOU is a broad-based attempt to improve all of the criminal justice system, one priority area is cracking down on money laundering operations.

VULNERABILITIES AND EXPECTED TYPOLOGIES

Sint Maarten has an offshore banking industry consisting of one bank.

Many hotels legally operate casinos on the island, and online gaming is also legal but is not subject to supervision.

Sint Maarten’s favorable investment climate and rapid economic growth over the last few decades have drawn wealthy investors to the island to invest their money in large scale real estate developments, including hotels and casinos. In Sint Maarten, money laundering of criminal profits occurs through business investments and international tax shelters. Its weak government sector continues to be vulnerable to integrity-related crimes.

KEY AML LAWS AND REGULATIONS

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KYC laws cover banks, lawyers, insurance companies, customs, money remitters, the Central Bank, trust companies, accountants, car dealers, administrative offices, Tax Office, jewelers, credit unions, real estate businesses, notaries, currency exchange offices, and stock exchange brokers.

The MLAT between the Kingdom of the Netherlands and the United States, rather than the U.S. – EU Agreement, which has not yet been extended to the Kingdom’s Caribbean countries, applies to Sint Maarten and is regularly used by U.S. and Sint Maarten law enforcement agencies for international drug trafficking and money laundering investigations.

Sint Maarten is a member of the CFATF, a FATF-style regional body, and, through the Kingdom, the FATF. Its most recent mutual evaluation can be found at: https://www.cfatf-gafic.org/index.php/documents/cfatf-mutual-evaluation-reports/sint-maarten-1

 

AML DEFICIENCIES

In July 2015, Sint Maarten’s FIU reported that hundreds of unusual financial transaction investigations were backlogged at the Sint Maarten Public Prosecutor’s Office. Approximately 1,138 reports totaling $243 million have not been investigated.

The UNCAC has not yet been extended to Sint Maarten.

Sint Maarten has yet to pass and implement legislation to regulate and supervise its casino, lottery, and online gaming sectors in compliance with international standards. In addition, the threshold for conducting customer due diligence in the casino sector does not comply with international standards.

ENFORCEMENT/IMPLEMENTATION ISSUES AND COMMENTS

The National Ordinance Reporting Unusual Transactions establishes an “unusual transaction” reporting system. Designated entities are required to file unusual transaction reports (UTRs) with the FIU on any transaction that appears unusual (applying a broader standard than “suspicious”) or when there is reason to believe a transaction is connected with money laundering. If, after analysis of an unusual transaction, a strong suspicion of money laundering arises, those suspicious transactions are reported to the public prosecutor’s office.

The harbor of Sint Maarten is well known for its cruise terminal, one of the largest in the Caribbean islands. The local container facility plays an important role in the region. Larger container ships dock their containers in Sint Maarten where they are picked up by regional feeders to supply the smaller islands surrounding Sint Maarten. Customs and law enforcement authorities should be alert for regional smuggling, TBML, and value transfer schemes.

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