International Narcotics Control Strategy Report


United States Department of State

Bureau for International Narcotics and Law Enforcement Affairs

Money Laundering and Financial Crimes
March 2015

Belize is not a major regional financial center; however, it has a substantial offshore financial sector. The Government of Belize continues to encourage 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 (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 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.

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 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. The CFATF called upon its members to consider instituting countermeasures to protect their financial systems from the money laundering and terrorism financing risks emanating from Belize In May 2014, the CFATF noted that Belize has made substantial progress and encouraged Belize to continue implementing its action plan.

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
  • 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

REPORTING REQUIREMENTS:

  • Number of STRs received and time frame: 141: January 1 – November 14, 2014
  • 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: 0 in 2014
  • Convictions: 0 in 2014

RECORDS EXCHANGE MECHANISM:

  • With U.S.: MLAT: YES Other mechanism: YES
  • With other governments/jurisdictions: YES

Belize is a member of the Caribbean Financial Action Task Force (CFATF), a FATF-style regional body. Its most recent mutual evaluation can be found at: https://www.cfatfgafic.or/index.php?option=com_docman&task=cat_view&gid=352&Itemid=418&lang=en

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Following the CFATF designation, over the last two years the Belizean government dramatically increased its efforts to strengthen its national AML/CFT regime. In 2014, the Belize National Assembly amended a number of laws and adopted regulations to increase government oversight of financial activities in Belize. The amended acts include the Money Laundering and Terrorism (Prevention) Act; the Companies Act; the Domestic Banks and Financial Institutions Act; the Financial Intelligence Unit Act; the Mutual Legal Assistance and International Co-Operation Act; the Insurance Act; the Financial Investigative Unit Act; the International Financial Services Act; the Gaming Control Act; the Interception of Communications Act; Customs Regulation Act; Trust Act; Non-Governmental Organizations (NGO) Act; Criminal Code Act; and the Firearms Act.

The new Mutual Legal Assistance and International Co-Operation Act includes provisions to facilitate investigations, prosecutions, and judicial proceedings in relation to criminal matters, including the freezing, seizing, and confiscation of proceeds and instrumentalities of crime and terrorist property. This law also establishes a single competent authority for the receipt and processing of requests for mutual legal assistance and empowers the Attorney General and the Ministry of Foreign Affairs to undertake international cooperation inquiries to and on behalf of foreign countries.

Despite the new laws and regulations, some international experts have noted political will is needed to fully implement and enforce the new legislation through investigations and prosecutions. An absence of money laundering prosecutions and convictions in 2014, coupled with historically low figures, reflects the lack of robust enforcement efforts.

The financial intelligence unit (FIU) is responsible for enforcement and implementation of all AML/CFT-related regulations as well as international sanctions lists, domestic tax evasion, and all money laundering investigations. The FIU has gone through some organizational changes over the past two years, including attorney assignments and increasing the analytical staff from one to three. The FIU is reported to be focused on rolling out its new compliance regime. 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, government departments, and regulatory bodies. International donors are working with police executives to develop curricula to train police officers on how to identify cases appropriate for the FIU. At least four educational seminars have been held by the FIU with financial institutions.

In September 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. The suspects created three brokerage firms in Belize to assist U.S. citizens in fraudulent manipulation schemes of publicly traded companies. 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 Government of Belize should demonstrate its commitment to provide additional resources and training to effectively enforce the country’s enhanced AML/CFT regime. Belize should become a party to the UN Convention against Corruption.


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