Gumbs says St. Maarten must strengthen financial laws to reduce grey-listing risk

GREAT BAY--Minister of Finance Marinka Gumbs told Parliament that St. Maarten is not currently on the FATF grey list, but warned that the country remains at risk if it does not make sufficient progress in strengthening its financial supervision, anti-money laundering, payment systems and virtual asset regulatory framework.

The Minister made the statement while responding to questions from Members of Parliament during the handling of several draft national ordinances related to financial supervision, payment service providers, virtual asset service providers, Central Bank oversight, and clearing and settlement systems within the monetary union of Curaçao and St. Maarten.

According to the Minister, failure to implement these standards could expose the country to reputational damage, increased international monitoring, pressure on correspondent banking relationships and possible disruptions to international payment traffic. For a small and open economy such as St. Maarten, she said, maintaining confidence in the financial system and continued access to international financial markets is critical.

The Financial Action Task Force, FATF, is an international standard-setting body that develops rules and recommendations to help countries fight money laundering, terrorist financing and the financing of weapons proliferation. Countries are assessed on how well their laws, institutions and enforcement systems meet these standards. If a country has serious weaknesses and does not address them quickly enough, it can be placed on the FATF grey list, which signals to the international financial community that the jurisdiction requires increased monitoring. For St. Maarten, this matters because grey listing can affect banking relationships, international transfers, investor confidence and the cost of doing business.

Gumbs said the draft laws are important not only from a legal and regulatory standpoint, but also for safeguarding St. Maarten’s financial stability, international reputation and continued access to the international financial system. She explained that the legislation forms part of St. Maarten’s commitment to comply with international standards concerning financial supervision, anti-money laundering measures, payment systems and virtual asset services.

Gumbs clarified that St. Maarten is currently under an enhanced follow-up process by the Caribbean Financial Action Task Force, CFATF, following the 2025 mutual evaluation report. She said shortcomings were identified in the country’s AML/CFT framework, and that improvements are expected within a set timeframe.

An AML/CFT framework refers to a country’s system of laws, regulations, institutions and enforcement measures used to combat money laundering and terrorist financing. AML means anti-money laundering, while CFT means combating the financing of terrorism. In practical terms, the framework requires banks, payment providers, virtual asset companies and other financial institutions to identify customers, monitor transactions, report suspicious activity, keep proper records and follow rules that prevent the financial system from being misused.

“The concern is therefore not hypothetical, but also not immediate in the sense that a grey-listing decision has already been taken,” Gumbs explained. She said what matters now is demonstrating political commitment, legislative progress and effective implementation.

The Minister said the risk of grey listing did not arise overnight. St. Maarten has been aware since the evaluation process intensified in 2024, and since the report was adopted in 2025, that continued legislative and enforcement action would be necessary to reduce the risk. She described the five draft national ordinances before Parliament as part of a broader set of measures aimed at strengthening the country’s regulatory and supervisory framework.

Gumbs said the core issue is protecting St. Maarten’s financial reputation, correspondent banking relationships and international confidence in the country’s financial system. She also linked the draft laws to the principle of uniformity within the monetary union, noting that Curaçao and St. Maarten share a joint Central Bank and therefore require a harmonized supervisory framework to ensure effective oversight, consistent regulation and credibility.

The Minister also explained that the laws are tied to internationally recognized standards, including FATF recommendations and principles for financial market infrastructures developed under the Bank for International Settlements and the International Organization of Securities Commissions. She said adherence to these standards is widely regarded as essential for maintaining market integrity, safeguarding financial stability and preserving access to international financial markets.

Asked about the consequences of not adopting the uniform national ordinances, Gumbs said the principal risk is that St. Maarten could face placement on the FATF grey list, bringing significant financial, economic and reputational consequences. She warned that local banks could face increased scrutiny from international correspondent banks, making international transactions slower, more expensive or, in some cases, restricted.

She said ordinary citizens and businesses could experience delays when sending or receiving money internationally, while government itself could face higher costs when conducting financial transactions. Foreign investors and international businesses may also become hesitant to do business with St. Maarten, because grey listing creates the perception that a jurisdiction carries higher financial and compliance risks.

Gumbs warned that the burden would ultimately fall on residents, because increased compliance costs imposed on banks and businesses are often passed down to consumers through higher banking fees, stricter requirements to open accounts or obtain financing, and reduced access to financial services.

“This is precisely why these legislative measures are so important,” the Minister told Parliament, explaining that the laws should not be viewed as merely technical or administrative, but as measures to protect St. Maarten’s financial stability, reputation and economic future.

She also said the ordinances would strengthen the country’s ability to prevent financial fraud, money laundering and other forms of financial abuse by clearly designating the Central Bank as the competent authority for licensing and supervision. Through that framework, the Central Bank would be able to apply fit and proper assessments, legal compliance requirements and operational standards, while also maintaining ongoing supervision and enforcement powers.

The draft laws before Parliament include the National Ordinance on the Supervision of Securities Intermediaries and Asset Managers; the Draft National Ordinance on the Supervision of Payment Service Providers; the Draft National Ordinance on the Supervision of Virtual Asset Service Providers; the Draft National Ordinance on Oversight of Payment or Securities Settlement Systems; and the Draft National Ordinance on the Supervision of FMI System Operators.

Gumbs said the adoption and implementation of the laws would help St. Maarten remain a credible and reliable participant in the international financial system, while also supporting a modern legal framework for digital financial innovation, payment services and financial market oversight.

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