FATF Mutual Evaluation Aruba FATF Mutual Evaluation Sator Regulatory Consulting Helen Hatton - Managing Director Neil Haworth – Regulatory Consultant

FATF Process Global Standards applied to large and small countries Scaleable solutions harder for small places – not impossible Focus is on EFFECTIVENESS Regulation Supervision Enforcement International Co Operation

International Community want evidence that Aruba is ready to stand as a Responsible partner in the Global Community A partner – not a pariah A friend – not a risk

Why bother? Doesn’t Aruba do OK? Our finance centre is only 1% of our economy – is this a big deal for us? Worth the investment? FATF standards are written for big countries not ones like ours

Imagine ……………… Its Spring 2012, the international recession is over, recovery is all around …… The FATF issues a world wide public warning that Aruba does not sufficiently apply the 40+9 recommendations and that countries dealing with Aruba should apply additional due diligence. Text… A B C D E F G H I J

every transaction moving in or out of Aruba Sator Regulatory Consulting Limited Text… A B C D E F G H I J A bad scenario Automatically all compliant jurisdictions are required under the FATF process to apply heightened due diligence to:- every transaction moving in or out of Aruba every customer originating from Aruba including trading companies (import/export of goods) Stage III SANCTION

Text… A B C D E F G H I J Local business costs increase, access to markets is reduced Wealthy residents business affairs are slowed New investors are less attracted to the island, with associated slowing of building and other trades Standard & Poors type global credit ratings are degraded resulting in Aruban currency and debt issues becoming harder to place Stage III SANCTION

Text… A B C D E F G H I J Aruban based assets or deals are no longer as attractive to investment committees – for example the board of a mutual fund investing in real estate for future hotel or residential development would be less likely to include investment in Aruban property in its asset portfolio WORST SCENARIO? OECD countries instruct their subsidiaries to withdraw US dollar clearing system is closed to Aruban originating transactions Stage III SANCTION

AML/CFT STRATEGY GROUP TOUGH DECISIONS:- Your agency senior management, simply has to be up to the tasks ahead. They have to be of the personal calibre to do the job AND you have to resource them properly This does not mean a blank cheque, but it does mean having people in post who are solutions oriented and capable of adapting, changing and leading that change.