Haiti

Sanctions

EU

FATF AML Deficient List

Higher Risk

Compliance with FATF 40 + 9 Recommendations
US Dept of State Money Laundering assessment 
Not on EU White list equivalent jurisdictions
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
International Narcotics Control Majors List
Failed States Index (Political Issues)(Average Score)

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ANTI-MONEY LAUNDERING

 

FATF Status

Caribbean FATF Public Statement on Haiti released following CFATF meeting on 9th November 2016

The CFATF undertook a High Level Mission (HLM) to the Republic of Haiti on Monday 27th of April 2015. Thereinafter, a letter from the CFATF Chair, was sent to Haiti on the 17th of September 2015, making reference that Haiti would remain in the second stage of enhanced of follow-up but would need to demonstrate progress. At the CFATF Plenary in November 2015, Haiti demonstrated some progress on non-legislative measures. Plenary determined that Haiti should remain in the status quo and demonstrate to the May 2016 Plenary substantial compliance with both non-legislative and legislative requirements. At the CFATF Plenary in June 2016, Haiti demonstrated that had taken steps towards improving its AML/CFT compliance regime with non-legislative actions, including providing training to FIU, Police officers, Prosecutors and Magistrates; and taking steps to join the Egmont Group. However, Plenary was not satisfied with the pace of reforms and agreed to the issuance of a public statement against Haiti asking members to consider the risk posed by Haiti. Plenary also agreed that Haiti must make sufficient progress and demonstrate such progress by the November 2016 Plenary. At the CFATF Plenary in November 2016, Haiti demonstrated that sufficient progress has been made through: the amended Law Sanctioning Money Laundering and Terrorist Financing (LSMLTF) by the Chamber of Deputies on September 9th, 2016 and by the Senate on September 28th, 2016; the enactment of the new UCREF law seeking to establish the l’Unité Centrale de Renseignements Financiers (Central Financial Intelligence Unit) (UCREF) as an autonomous administrative financial intelligence unit; and the publication in the National Gazette of the Decree establishing procedures for the implementation of measures aimed at freezing funds and other assets connected with the financing of terrorism.

Haiti is encouraged to continue the reform process including the passage of the legislative framework and continue addressing its AML/CFT deficiencies.

Haiti and the CFATF should continue to work together to ensure that Haiti’s reform process is completed, by addressing its remaining deficiencies and continue implementing its Action Plan.

 

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Haiti was undertaken in 2019. According to that Evaluation, Haiti was deemed Compliant for 0 and Largely Compliant for 2 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)

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

OVERVIEW

 

Haitian gangs are engaged in international drug trafficking and other criminal and fraudulent activity.  While Haiti itself is not a major financial center, regional narcotics and money laundering enterprises utilize Haitian couriers, primarily via maritime routes.  Much of the drug trafficking in Haiti, and related money laundering, has a connection to the United States.  

 

Haiti adopted important legislation over the past several years, in particular anticorruption and AML laws.  The weakness of the Haitian judicial system, impunity, and a lack of political interest leave the country vulnerable to corruption and money laundering. 

 

On June 8, 2016, the CFATF issued a public statement asking its members to consider the risks arising from the deficiencies in Haiti’s AML/CFT regime.  The statement followed CFATF’s acknowledgement that Haiti had not made sufficient progress to fulfill its action plan to address serious AML deficiencies, including legislative reforms.  On May 31, 2018, noting Haiti’s continued progress, the CFATF removed Haiti from its public statement.

 

 

 

SANCTIONS

UN and EU relating to the non-implementation by the military authorities to hand over power and instances of violations of human rights. The restrictions were initially put in place in 1994 but have been regularly reviewed and reduced since.

 

BRIBERY & CORRUPTION

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           20

World Governance Indicator – Control of Corruption             10

 

ECONOMY

Haiti's economy suffered a severe setback in January 2010 when a 7.0 magnitude earthquake destroyed much of its capital city, Port-au-Prince, and neighbouring areas. Currently the poorest country in the Western Hemisphere, with 80% of the population living under the poverty line and 54% in abject poverty, the earthquake further inflicted $7.8 billion in damage and caused the country's GDP to contract. In 2011, GDP growth rose to 5.5% as the Haitian economy began recovering from the earthquake. However, growth slowed in 2015 to 2% as political uncertainty, drought conditions, and the depreciation of the national currency took a toll on investment and economic growth.

 

Haiti is a free market economy with low labour costs and tariff-free access to the US for many of its exports. Two-fifths of all Haitians depend on the agricultural sector, mainly small-scale subsistence farming, which remains vulnerable to damage from frequent natural disasters, exacerbated by the country's widespread deforestation. Poverty, corruption, vulnerability to natural disasters, and low levels of education for much of the population are among Haiti's most serious impediments to economic growth. Remittances are the primary source of foreign exchange, in 2015 equalling over one-fifth of GDP, and nearly double the combined value of Haitian exports and foreign direct investment.

 

US economic engagement under the Caribbean Basin Trade Partnership Act (CBTPA) and the 2008 Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE II) helped increase apparel exports and investment by providing duty-free access to the US. The Haiti Economic Lift Program (HELP) Act of 2010 extended the CBTPA and HOPE II until 2020, while the Trade Preferences Extension Act of 2015 extended trade benefits provided to Haiti in the HOPE and HELP Acts through September 2025. Apparel sector exports in 2015 reached $904 million and account for about 90% of Haitian exports and more than 10% of the GDP.

 

Investment in Haiti is hampered by the difficulty of doing business and weak infrastructure, including access to electricity. Haiti's outstanding external debt was cancelled by donor countries following the 2010 earthquake, but has since risen to nearly $2 billion as of December 2015, the majority of which is owed to Venezuela under the PetroCaribe program. Although the government has increased its revenue collection, it continues to rely on formal international economic assistance for fiscal sustainability, with over 20% of its annual budget coming from foreign aid or direct budget support.

 

Agriculture - products:

coffee, mangoes, cocoa, sugarcane, rice, corn, sorghum; wood, vetiver

Industries:

textiles, sugar refining, flour milling, cement, light assembly using imported parts

Exports - commodities:

apparel, manufactures, oils, cocoa, mangoes, coffee

Exports - partners:

US 85.3% (2015)

Imports - commodities:

food, manufactured goods, machinery and transport equipment, fuels, raw materials

Imports - partners:

Dominican Republic 35.3%, US 24.5%, Netherlands Antilles 9.4%, China 9.4% (2015)

Investment Climate  -  US State Department

Haiti occupies the western third of the island of Hispaniola located in the Caribbean Basin. Numerous measures have been initiated by the government of Haiti (GOH) to encourage foreign investment and to establish a legal framework for long-term private sector led, market based economic growth. Efforts have also been focused on reinforcing public administration, rebuilding Haiti's infrastructure and public services, and improving the enabling environment for private sector development. The provisional government is focused on reducing expenditures and increasing fiscal revenues. The Haitian central bank (BRH) continued to follow a contractionary monetary policy by tightening legal reserve requirements. Foreign direct investment inflow decreased slightly to USD 104 million in 2015, making Haiti one of the smallest recipients of FDI in the region, alongside Cuba. FDI inflow suffered from a sluggish economy and an unstable political environment. The GOH has designated tourism, agriculture, construction, energy, and manufacturing as key investment sectors, and supports sector-focused investment promotion, public spending, and special economic zones. In addition, the Center for Investment Facilitation (CFI) is attempting to expedite business start-ups by developing off-the-shelf, pre-registered corporations for investors seeking to do business in Haiti. To streamline the incorporation process, CFI eliminated the step requiring the President’s office to review the incorporation draft before final publication. According to CFI, most firms exploring investment in Haiti during 2015 were in the agri-business and national industry sectors. National industry is defined as goods produced in Haiti mostly for domestic consumption.

 

Haiti’s economy grew by 1.7 percent in 2015, a deceleration in comparison to FY 2014 when the economy grew at a rate of 2.8 percent. The contraction is mainly attributed to political uncertainty caused by the controversial 2015 elections, severe drought conditions in FY2013- 2015 that undercut agricultural production, and the continued reduction of external financial assistance. Also, annualized consumer price inflation significantly increased to 13 percent as of March 2016, the result of weak domestic production and a 30 percent depreciation of the local currency against the U.S. dollar during FY2015. The World Bank predicts GDP growth of less than 1 percent in 2016. A favorable investment outlook for Haiti in 2016 will be contingent on the continuation of legal and structural reform efforts as well as a stable political environment. The Government of Haiti still must enact difficult legal and business reforms to improve Haiti's business environment and make the country more attractive to foreign investment.

 

 

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