Cuba, which is at the centre of a money laundering case in which Republic Bank has been named, is on a list of 15 countries that have been identified as not being sufficiently compliant with the recommendations of the Financial Action Task Force (FATF), the inter-governmental agency that develops provides international policies to combat money laundering and terrorist financing.
The list is hosted on the Web site of T&T's Financial Intelligence Unit (FIU), which is required to publish the list of countries by virtue of Section 17(1)(a) of the Financial Intelligence Unit Act of T&T. The public notice is dated February 23, 2012-seven days after it was issued by the FATF-and is signed by the FIU's director, Susan Francois.
There is a double asterix next to Cuba's name on the list which draws attention to the fact that the Communist country "has not engaged with the FATF in the process." There is also a note below the list in which the FATF "calls on its members to consider the risks arising from the deficiencies associated" with each of the 15 countries deemed to be non compliant.
Responding to claims by a US prosecutor on Monday that millions of dollars defrauded from the American health insurance programme, Medicare, ended up in Cuba, the government of the Communist country on Wednesday said it maintains strict controls to avoid money laundering by banks operating in its territory.
"Foreign commercial banks that maintain accounts in Cuban banks are obliged to operate in strict compliance with international and Cuban rules and must guarantee the reliability of their transactions and the correct use of their accounts," according to the statement by Johana Tablada, deputy director for US affairs at the Cuba's Foreign Ministry.
Anti-money laundering guidelines issued by the Central Bank in October 2011 require local financial institutions to ensure that, at a minimum, the guidelines are also implemented in their branches and subsidiaries abroad. "Where the local applicable laws and regulations prohibit the implementation of this Guideline, the Central Bank must be notified," according to the document.
Further, the Central Bank guidelines require that local financial institutions "pay attention to and report if suspicious," business transactions "undertaken with persons and transactions with financial institutions in or from other countries which do not or insufficiently comply with the recommendations of the Financial Action Task Force," such as Cuba.
Local financial institutions with foreign branches or subsidiaries are required to conduct an assessment of the anti-money laundering regime in the jurisdiction in which those branches or subsidiaries operate. Meanwhile, the Associated Press reported yesterday that 46-year-old, Cuban-American Oscar Sanchez pleaded not guilty to conspiring to launder tens of millions of dollars in the massive Medicare fraud scheme.
Prosecutors say Sanchez conspired to send money from Medicare fraud to shell companies in Canada before it was passed through the Republic Bank in Trinidad and then to Cuba. Prosecutors say he gave cash to the fraud ringleaders who did not want their money traced. Sanchez was born in Cuba and is a US citizen. He appeared in federal court in Miami yesterday, and his attorney entered the not guilty plea.
Sanchez is being held in federal custody because prosecutors consider him a flight risk. Prosecutors are seeking more than $22 million in property from Sanchez. If convicted, he could face 13 years in prison.