Strengthening finance in the Caribbean

Kirsty Scott

3 August 2023

This is an article from the CSC Development Theme: Strengthening global peace, security and governance

The Caribbean tends to be seen as a high-risk territory for money laundering. For us in the region we may not feel like that but internationally we tend to be perceived as a high risk jurisdiction.

Suzette Lewis

The Financial Action Task Force (FATF) leads global action to tackle money laundering, terrorist and proliferation financing. The inter-governmental body sets international standards that aim to prevent these illegal activities at the national level and monitors and reports on evolving threats to financial systems. 

In the Caribbean region, the Caribbean Financial Action Task Force (CFATF) is the regional body that oversees the effective implementation of, and compliance with, the FATF recommendations.

In 2021, Commonwealth Alumnus Suzette Lewis joined the Eastern Caribbean Central Bank (ECCB), which is the central bank for eight islands in the eastern Caribbean.

As an examiner, she is assigned to the Financial Sector Supervision Department (FSSD) within the ECCB. The FSSD is responsible for the supervision and regulation of Licensed Financial Institutions under the region’s Banking Act. It is also responsible for the Anti-Money Laundering/Combating Finance and proliferation financing (AML/CFT/CPF) supervision for six of the eight territories.

Suzette notes that internationally, the Caribbean is typically viewed as financial high-risk for trade and business.

“The Caribbean tends to be seen as a high-risk territory for money laundering, but not for us [in the region]. We wouldn’t feel like that particularly given that the data does not support the ECCU region as a high risk jurisdiction for money laundering and even lower for terrorist financing. But I think in the international sphere, we tend to be perceived as a high-risk territory, perhaps due to information asymmetries.”

She cites the perception of the islands as tax havens with underground economies built on drug-smuggling as significant factors in this. However, in her own opinion, she feels these are unfair assessments and do not consider the myriad of ways that the region is implementing and adhering to international standards on anti-money laundering and anti-terrorist financing.

 Developing skills in the long-term

Prior to completing her Master’s in Finance at City, University of London through a Commonwealth Scholarship, Suzette worked at the Ministry of Finance and Economic Planning in Saint Vincent in the Supervision and Regulation Unit.

In 2008, the global financial crisis occurred and effects of this were felt in the Caribbean region. Coupled with the collapse of a couple of insurance companies in the region, this highlighted the need for stronger regulation and supervision.

The Financial Services Authority (FSA) was formed in 2012 with the mandate to supervise and regulate the operations of specified non-bank financial entities. Suzette was assigned to the Insurance and Pensions Unit within the FSA where she continued her work in the supervision of the non-bank financial sector, including the insurance and pension sector.

Suzette was awarded her Commonwealth Scholarship in 2015 and left the FSA to pursue her studies in the UK. Upon completion of her Master’s, Suzette returned to her previous role and in 2018 was involved in the completion of a National Risk Assessment (NRA). The NRA allows countries to identify, assess and understand its financial risks and apply appropriate mitigation measures and polices.

Each sector has its own section in the NRA and based on her work in the Insurance and Pensions unit, Suzette was assigned to the insurance group to gather and analyse information on the insurance sector.

As part of the insurance working group, Suzette was responsible for collecting data on insurance products and customer information. She supported the group in gathering data that was not readily available through the development of questionnaires, coordinating with the sector, and meeting with key stakeholders within the sector to gather information to input into the World Bank’s NRA toolkit.

Suzette credits her Master’s studies in helping her to manage and deliver this work.

“My Master’s helped me, to develop my analytical skills, my critical thinking, and, also, just to be a better team player.”

In 2023, Saint Vincent and the Grenadines underwent a Mutual Evaluation conducted by the CFATF. The evaluation assesses the extent to which a country is in compliant with the FATF standards and is globally published. It can also lead to whether a country is listed on the FATF’s grey or blacklist.

The outcome of the evaluation was positive with significant progress in the country’s AML/CFT regime. Suzette is pleased with this outcome and her contributions to the NRA, which led the country to devise a national action plan and therefore contribute to the result of the mutual evaluation.

Regulations in the future

Suzette’s current role at the ECCB sits within the Anti Money Laundering Unit, where she is part of a team that is responsible for the implementation of the ECCB’s risk based framework for AML/CFT for the banking sector in the ECCU. For her, working at the ECCB is an opportunity to expand the application of her skills and knowledge, whilst drawing on her previous professional and study experiences.

“I took the opportunity to work at Eastern Caribbean Central Bank to develop my skills further and being assigned in this unit is an opportunity for further growth, as I am now exposed to the entire region rather than just my country or one single institution.”

Suzette now being exposed to other country’s NRAs and Mutual Evaluations and this work has provided an opportunity for her to reflect and draw on her experiences with the FSA to assist her current role.

With further exposure to the financial regulations and measures in place, Suzette reflects that positive progress is being made and hopes this will soon change the international perspective of financial sectors in the region.

“A lot of our islands are putting the necessary regulations and legislations in place. And in a lot of the mutual evaluations, we’ve had good outcomes in terms of what we are doing as regulators. I think it will be a while for that to catch up on the international stage for people to see that the work is being put in.”

The FATF monitors ever evolving financial threats to support the development of new regulations. Suzette notes that virtual assets, such as cryptocurrency and digital currency are emerging areas that require more regulation and training on the opportunities and threats, both within the sector and the general public.

“We as a region have to look at what type of regulations we put in place for this, how we’re going to protect the stakeholders, and how this impacts the normal person on the street. Because not everyone is aware of what virtual currency is, how it’s used.”

Reflecting on her Commonwealth Scholarship

Thinking back to her Commonwealth Scholarship, Suzette has fond memories of studying in the UK. Her Master’s in Finance enabled her to bring together her passion for both economics and accounting, and her course at City, University of London enabled her to meet and study as part of a diverse international community.

“I enjoyed my time at City, University of London and I enjoyed London as well. I found the school was great and the programme was very well rounded because you are exposed to various academic fields such as statistics, economy, accounting.”

Looking to the future, she hopes to continue to work in regulation and contribute to economic opportunities and growth in the region, and is continuing her professional development through further professional qualifications and designations.

“I love Regulation. It is not something that I thought that I wanted to do initially but it is something that I am excited to be part of, and to be able to contribute to the sound financial sector no matter how small my role may be. In the next five years, I would like to see myself in leadership role in an international organisation.”

Suzette Lewis is a 2015 Commonwealth Scholar from Saint Vincent and the Grenadines. She completed a MSC Finance at City, University of London.