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Puerto Rico, U.S. Treasury reject European Commission list of money laundering risk jurisdictions

By on February 13, 2019

Gov. Ricardo Rosselló and U.S. Treasury Secretary Steven Mnuchin (Courtesy)

SAN JUAN – The executive director of the Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish acronym), Christian Sobrino Vega, and Puerto Rico Financial Institutions (OCIF by its Spanish acronym) Commissioner George Joyner, joined the U.S. Department of the Treasury Wednesday to reject the European Commission’s determination to include several U.S. territories in the list of high-risk jurisdictions for money laundering.

The list published by the European Commission included American Samoa, Guam, Puerto Rico and the U.S. Virgin Islands.

The Aafaf and OCIF officials said they collaborate with Treasury’s Office of Terrorist Financing and Financial Crimes (TFFC) and that the government of Puerto Rico has a “robust legal and regulatory framework to prevent, detect and combat said practice.”

For its part, the U.S. Treasury said in a statement that it “has significant concerns about the substance of the list and the flawed process by which it was developed.”

The agency explained that the Financial Action Task Force (FATF) is the entity in charge of developing global standards to combat money laundering, and terrorism and proliferation financing.

“The FATF, which includes the United States, the European Commission, 15 EU member states, and 20 other jurisdictions, already develops a list of high-risk jurisdictions with AML/CFT deficiencies as part of a careful and comprehensive process,” Treasury wrote.

It then said the commission’s process contrasts with the FATF’s in that it “did not include a sufficiently in-depth review,” provided the “affected jurisdictions with only a cursory basis for its determination,” notified these they would be included on the list “only days before issuance” and “failed to provide” them ” with any meaningful opportunity to challenge their inclusion or otherwise address issues identified by the Commission.”

Treasury rejected the inclusion of the territories on the list, saying “the commitments and actions of the United States in implementing the FATF standards extend to all U.S. territories, and that the same Anti-Money Laundering and Countering the Financing of Terror (AML/CFT) legal framework that applies to the continental United States also generally applies to U.S. territories.”

The agency concluded its statement saying it “does not expect U.S. financial institutions to take the European Commission’s list into account in their AML/CFT policies and procedures.”

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