By Andre Bagoo Thursday, October 8 2009

WHILE there is no specific ban on the introduction of a sunset clause for legislation giving effect to regulations of the Financial Action Task Force (FATF) which is behind the proposed Financial Intelligence Unit, Government yesterday said such a clause would fall foul of the regulations.

Minister of Trade Mariano Browne yesterday admitted the FATF 40 recommendations, which are behind the Government’s move to introduce a Financial Intelligence Unit (FIU), did not explicitly rule out a sunset clause but said such a clause would still fall foul of the FATF.

“Whilst the recommendations hold no overt statement in respect of a sunset clause, remember this is an administrative organ; your legislation is examined to ensure compliance and commitment to the process,” Browne said. “You cannot include a sunset clause to give effect (to the recommendations); that is not deemed to be commitment. If you sign up for it you are in the organisation. If you are in the organisation, this is what is required,” he said.

There is no specific recommendation in the FATF that bans a sunset clause. In fact, recommendation 32 requests that countries “should ensure that their competent authorities can review the effectiveness of their systems to combat money laundering”.

In the Senate on Tuesday, during debate on a bill to introduce a FIU which would have invasive powers to gather information about companies, Independent senators had called for a sunset clause for the legislation. They did so out of concerns that the unit could be found to be too closely aligned with the political directorate because it would fall under the control of the Minister of Finance.

In arguing for the bill, Browne, as well as Attorney General John Jeremie, said a sunset clause was not an option as this would be repugnant to the FATF recommendations based on the advice of FATF liaison officers in the country.

The FATF is an inter-governmental body whose purpose is the promotion of international policies to combat money laundering and terrorist financing.

The Financial Action Task Force on Money Laundering was established by the G-7 Summit that was held in Paris in 1989. In 2000, the FATF expanded to 31 members, in 2003 to 33 members and in 2007 it expanded to its current 34 members.

In April 1990, the FATF issued a report containing a set of 40 recommendations, which provide a comprehensive plan of action needed to fight against money laundering.

Trinidad and Tobago is not listed as a direct member of FATF. However this country is a member of the Caribbean Financial Action Task Force (CFATF) which is listed as an associate member of FATF.

The CFATF is an organisation of states and territories of the Caribbean which have agreed to implement common counter-measures against money laundering.

In November 1996, 21 members of the CFATF entered into a memorandum of understanding in which they agreed to implement the FATF 40 recommendations and the CFATF 19 recommendations among other agreements.