Narcotics-related corruption and associated arms trafficking, and money laundering and financial crime constitute a “growing threat” to the small island states of the Caribbean, according to a new report published by the independent, anti-corruption group Transparency International. The report warned that the “urgent nature” of the narcotics threat derives from the fact that about 35 metric tons of cocaine originated from, was destined for, or transited through the Eastern Caribbean in 2002.
The Bahamas was in the top 21 of countries in the world in terms of cocaine interceptions in 2002, and almost half of the cocaine introduced into the United States and 30 percent introduced into Europe comes through the Caribbean corridor, said the report. In addition to assessing the Bahamas, Transparency International’s report examined the “national integrity systems” of Antigua-Barbuda, Barbados, Dominica, Grenada, St. Kitts-Nevis, St. Lucia, and St. Vincent and the Grenadines.
Transparency International says a national integrity system is a system of checks and balances that is unique to each country that either assures or fails to assure citizens of just and honest government.
Three of the countries studied in the report — Antigua-Barbuda, the Bahamas and Dominica — are regarded as major money-laundering territories “whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking.”
“It is therefore no exaggeration to suggest,” said the report, that “drug trafficking, official corruption, [and] violent intimidation have the potential to threaten the stability of the small, democratic countries of the Eastern Caribbean and to varying degrees have damaged civil society in all of these countries.”
On the positive side, the eight “micro-states” studied in the report “perform relatively better than most countries” in Latin America and elsewhere in the Caribbean region. The reason for this is because they have free and independent media, effective superior courts, a civil society with “latent anti-corruption potential,” and, most recently, have established more “stringent regimes against money laundering and financial crimes,” according to the report, entitled “The National Integrity Systems TI Caribbean Composite Study 2004.”
Transparency International, based in Berlin, also said the report found that domestic and international concern with financial crimes is the reason why some countries in the Caribbean region have adopted more stringent anti-money-laundering offices.
Consequently, those countries have been removed from the Organization for Economic Cooperation and Development’s Financial Action Task Force list of noncooperating countries regarding money laundering.
Transparency International’s findings follow U.S. government statements that the primary drug threat to the United States from the Caribbean is the trans-shipment of large amounts of cocaine from South America. The Caribbean also plays an important role in drug-related money laundering, with many Caribbean countries having well developed offshore banking systems and bank secrecy laws that facilitate money laundering, said the U.S. Drug Enforcement Administration (DEA) in its 2003 report called “The Drug Trade in the Caribbean: A Threat Assessment.”
In that report, the DEA said that in early 2000, the Caribbean Financial Action Task Force, an organization of states of the Caribbean Basin established to fight money laundering, estimated that $60 billion in drug trafficking and organized crime proceeds are laundered through the Caribbean every year.
The DEA report is available online at: http://www.dea.gov/pubs/intel/03014/03014.html.
The Transparency International report is available at:
http://www.transparency.org/activities/nat_integ_systems/dnld/carib_comp.pdf.
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
By Eric Green, Washington File Staff Writer
02 February 2005
