by TONY BEST

BARBADOS remains vulnerable to money laundering and needs to do more to prevent illicit financial activity.

And, it is being urged to enact civil forfeiture and asset sharing legislation.

The demands came from the United States State Department in its annual assessment of drug control and money laundering efforts around the world.

In its report to the United States Congress, Washington urged Barbados to continue its efforts to "strengthen its anti-money laundering and counter-terrorism financing legislation".

In addition, the State Department urged Government to become "more aggressive in conducting examinations of the financial sector" as well as "maintaining strict control over vetting and licensing offshore entities".

In its review of Barbados' money laundering picture in 2007, the Bush Administration told the United States Congress that yes, Barbados was a "transit country for illicit narcotics", thus making it "vulnerable to money laundering, which primarily occurs in the formal banking system". It charged that domestically the money laundering occurring in the country could be traced to the "trafficking of cocaine and marijuana".

The State Department pointed out to the lawmakers on Capitol Hill that Barbados had already put several systems in place and enacted laws to deal with money laundering.

Just last year, the Central Bank revised the anti-money laundering guidelines for financial institutions to keep them in line with international standards and to provide guidance when it came to financing terrorism, the report explained.

Interestingly, government found no evidence last year that would indicate Barbados was being used as a conduit to finance terrorism.

Here then are some of the steps the State Department said Barbados had taken in recent years to prevent fraud and money laundering:

Extended the money laundering laws to cover offenses other than those involving drugs.

 Forced financial institutions to report suspicious transactions that may involve criminal activities, such as terrorism.

 Enabled the police to pursue "all potential prosecutions" of money laundering.

 Placed the burden of proof on accused persons to demonstrate that property in their possession was "derived from a legitimate source". Failure to do so could lead to a presumption that it was acquired through illegal means.