Update Country Report Curaçao 05 Apr 2017

Event

In late March the US Department of State released the 2017 International Narcotics Control Strategy Report (INCSR), in which both Curaçao and Sint Maarten were named as major money-laundering countries and "countries of primary concern".

Analysis

The INCSR is published annually to provide an overview of the efforts of countries globally to counter the international drug trade, including drug seizures, legislative changes, anti-money-laundering efforts and other financial regulations.

The report notes that Curaçao is a major financial centre and, because of its location, a transhipment point for drugs passing from South America towards the US, Europe and the Caribbean. It also states that money-laundering in Curaçao takes advantage of secrecy within the country's banking system. However, the report does acknowledge that the country is trying to shed its reputation as a tax haven, and points to tightened anti-money-laundering legislation and ongoing co-operation with the Dutch and US authorities as positive indicators.

Similarly, the report also points to Sint Maarten's geographic vulnerability to drug-trafficking and to the fact that it shares the island with the French territory of St Martin, which operates as a free-trade zone. Money-laundering is primarily related to proceeds from drug-trafficking, but Sint Maarten does not have an offshore banking sector, unlike Curaçao. The report notes that Sint Maarten lacks institutional accountability, related to a lack of enforcement of its criminal legislation, including financial crime.

Impact on the forecast

Our forecast remains unchanged. Curaçao and Sint Maarten are regularly mentioned in the annual INCSR reports and their inclusion this year will come as little surprise. Both countries will continue to work with the Kingdom of the Netherlands to strengthen anti-money-laundering capability, with the aim of moving off the "countries of primary concern" list in the medium term. However, in the short term the authorities in Curaçao will be focused more on upcoming elections than revising financial regulation.