FATF Status

Barbados is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies.

Latest FATF Statement  -  23 February 2024

The FATF welcomes Barbados’ significant progress in improving its AML/CFT regime. Barbados strengthened the effectiveness of its AML/CFT regime to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in February 2020, including (1) demonstrating it effectively applies risk-based supervision for FIs and DNFBPs; (2) taking appropriate measures to prevent legal persons and arrangements from being misused for criminal purposes, and ensuring that accurate updated beneficial ownership information is available on a timely basis; (3) increasing the capacity of the FIU to improve the quality of its financial information to further assist LEAs in investigating ML or TF; (4) demonstrating that money laundering investigations and prosecutions are in line with the country’s risk profile and reducing the backlog in the adjudication of criminal cases, in particular ML cases involving confiscation, and demonstrating the application of sanctions when appropriate; and (5) further pursuing confiscation in ML, including by seeking assistance from foreign counterparts. Barbados is therefore no longer subject to the FATF’s increased monitoring process.

Barbados should continue to work with CFATF to sustain its improvements in its AML/CFT system.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Barbados was undertaken in February 2021. According to that Evaluation, Barbados was deemed Compliant for 6 and Largely Compliant for 27 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

​US Department of State Money Laundering assessment (INCSR)

Barbados is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

Overview

Barbados has an active offshore financial services sector.  The country has made some progress on its anti-money laundering/combating the financing of terrorism (AML/CFT) regime.  A comprehensive national risk assessment in 2019 identifies evolving money laundering/terrorist financing risks and vulnerabilities.  Barbados developed a national action plan and began implementing risk-based measures to mitigate money laundering/terrorist financing vulnerabilities more effectively.  Barbados does not have free trade zones or an economic citizenship program.   

The Office of the Attorney General is responsible for leading the national AML/CFT response, working with private sector entities and government agencies, such as the financial intelligence unit (FIU), Central Bank of Barbados, and the Customs and Excise Department, among others.  The Financial Services Commission (FSC) is responsible for the licensing and supervision of credit unions and non-bank financial institutions.   

EU list of non-cooperative jurisdictions for tax purposes

In February 2021, Barbados was removed from the EU list of non-cooperative jurisdictions for tax purposes.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           69

World Governance Indicator – Control of Corruption             89

Barbados is the wealthiest and most developed country in the Eastern Caribbean and enjoys one of the highest per capita incomes in the region. Historically, the Barbadian economy was dependent on sugarcane cultivation and related activities. However, in recent years the economy has diversified into light industry and tourism with about four-fifths of GDP and of exports being attributed to services. Offshore finance and information services are important foreign exchange earners and thrive from having the same time zone as eastern US financial centers and a relatively highly educated workforce. Barbados' tourism, financial services, and construction industries have been hard hit since the onset of the global economic crisis in 2008. Barbados' public debt-to-GDP ratio rose from 56% in 2008 to 101% in 2015. Growth prospects are limited because of a weak tourism outlook and planned austerity measures.

Agriculture - products:
sugarcane, vegetables, cotton

​Industries:
tourism, sugar, light manufacturing, component assembly for export

​Exports - commodities:
manufactures, sugar, molasses, rum, other foodstuffs and beverages, chemicals, electrical components

Exports - partners:
Trinidad and Tobago 22.5%, US 11.8%, St. Lucia 9.2%, St. Vincent and the Grenadines 5.7%, Antigua and Barbuda 4.7%, St. Kitts and Nevis 4.4%, Guyana 4.2% (2015)

​Imports - commodities:
consumer goods, machinery, foodstuffs, construction materials, chemicals, fuel, electrical components

Imports - partners:
Trinidad and Tobago 39%, US 31.1% (2015)

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Investment Climate  -  US State Department

​With a $4.4 billion economy, Barbados is the largest economy in the Eastern Caribbean. The shutdown of the tourism sector in 2020 due to the pandemic led to an 18 percent GDP contraction. The economy began to recover in 2021 with 1.4 percent growth, and the International Monetary Fund (IMF) forecasts 2022 growth at 8.5 percent. Unemployment was estimated at approximately 40 percent in the first quarter of 2021, representing a 30 percent increase from the same period last year.

The Government of Barbados entered a standby arrangement with the IMF in late 2018.  The $290 million ($580 million Barbados dollars) Barbados Economic Recovery and Transformation (BERT) program aims to decrease the debt-to-GDP ratio, strengthen the balance of payments, and stimulate growth.  While the government was on track to meet its IMF targets pre-pandemic, the program dampened income and spending power due to public sector layoffs, the introduction of new indirect taxes, and a decline in the construction sector.  The impact of the pandemic required the IMF to adjust the program targets downwards several times. The IMF also approved additional lending into the program twice in 2020.

The country’s services sector continues to hold the largest growth potential, especially in the areas of international financial services, information technology, global education services, health, and cultural services.  The gradual decline of the sugar industry has opened land for other agricultural uses.  Investment opportunities exist in the areas of agricultural processing and alternative and renewable energy.  Uncertainty about the trajectory of economic recovery of the tourism, commercial aviation, and cruise industries impacts the potential for projects in those sectors. The government has identified renewable energy and climate resilience projects as top priorities. In 2021, Barbados joined the Organization of Economic Cooperation and Development (OECD) framework seeking to harmonize global corporate minimum tax rates at 15 percent.

Barbados bases its legal system on the British common law system. It does not have a bilateral investment agreement with the United States, but it does have a double-taxation treaty and a tax information exchange agreement.

In 2015, Barbados signed an intergovernmental agreement in observance of the United States’ Foreign Account Tax Compliance Act (FATCA), making it mandatory for banks in Barbados to report the banking information of U.S. citizens.

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Country Links

Central Bank of Barbados

Financial Services Commission, Barbados

Barbados Financial Intelligence Unit (FIU-Barbados)

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