BELIZE CITY, Thurs. Oct. 7, 2021– On Tuesday, the Financial Intelligence Unit (FIU) responded to the reports published by the International Consortium of Investigative Journalists (ICIJ), that link registered entities in Belize to efforts by US nationals, accused of criminal activity, to evade taxes or court orders — thus calling into question the level of integrity within the industry.
The release from the FIU accurately points out that no actual law-breaking was involved in the provision of financial services by Belizean companies to those persons; rather, there was only a suggestion in the reports of “extremely poor due diligence and oversight in the conducting of business by corporate service providers.”
While the FIU release lauds the ICIJ for the work it carried out to bring this information to light, it stated that in Belize, mechanisms have already been put in place to combat the crimes related to the illicit use of offshore companies.
“A tremendous amount of collaborative work has been undertaken since 2015 to ensure domestic coordination to combat financial crimes. This includes conducting a national risk assessment to identify the country’s money laundering risks and vulnerabilities, implementing a national action plan to mitigate the risks identified, requiring corporate service providers to verify the identity of beneficial owners, directors, and shareholders, and hold this information in Belize, which must be made available to authorities on demand, and introducing economic substance requirements for Belize registered international business companies,” the release from the FIU states.
Prior to the introduction of the more rigorous protocols in 2015, personal information on the individuals playing key roles in the formation of offshore companies was not required as a part of the application process. This would allow questionable, at times criminal, persons and organizations to use the offshore services to launder their illicitly gained funds.
Belize recently successfully completed round 3 of the Caribbean Financial Action Task Force mutual evaluation process. The National Anti-Money Laundering Committee (NAMLC) has reportedly been conducting a bi-monthly meeting for the past four years, pending the 2023 4th Round of mutual evaluation.
Reports from the ICIJ state that documents shared by the US, Russia, Ukraine, Spain, Belgium, and Austria show hundreds of requests for information being made between 2002 and 2018 to solve criminal and civil cases. These requests were typically made through the FIU to the corporate service companies in Belize. According to the ICIJ’s reports, prosecutors say that they were unable to get any answers or any useful information from those entities in Belize.
“It is our expectation that any deficiency in diligence that would not rise to the current standards promulgated by the Financial Action Task Force (the FATF) would have been remedied by this time. Should our investigations demonstrate otherwise, then effective, proportionate, and dissuasive sanctions will be applied to all-natural and legal persons and legal arrangements involved, including corporate service providers,” the release from the FIU states.
The release went on to thank the ICIJ for its efforts to gather and share this information, stating, “While it often cannot provide all the answers to the questions raised, it assists the work of law enforcement and regulatory authorities by providing useful information from, at times, unconventional sources.”