The new AML/CTF framework in Curaçao: façade or substance?

The overhaul of Curaçao’s anti-money laundering and counter-terrorist financing regime has been presented as one of the most important developments in the island’s regulatory history. Legislators, regulators and industry consultants have promoted the changes as a decisive step towards aligning with European Union standards and satisfying the Financial Action Task Force’s recommendations. At first glance, the reforms seem to signal a shift from the island’s long-standing reputation for light-touch supervision towards a more rigorous compliance culture.

Yet when examined more closely, there is a risk that these changes may be more cosmetic than substantive. For years, Curaçao’s gambling and corporate services sectors have operated under a framework that attracted criticism for weak oversight, limited enforcement and tolerance of high-risk operators. While the new rules introduce mandatory compliance functions, detailed reporting requirements and a formal supervisory structure, it remains unclear whether these measures will be enforced consistently or whether they will primarily serve as a façade for international optics.

Apparent improvements, limited enforcement

The December 2024 passage of the LOK legislation and the January 2025 commencement of its accompanying regulations have been framed as a watershed moment. Operators are now obliged to submit AML and CTF policies to the Curaçao Gaming Authority by set deadlines. They must appoint an AML Compliance Officer, implement customer due diligence procedures and maintain suspicious transaction reporting processes. These obligations mirror the expectations placed on licensed operators in European jurisdictions, suggesting a deliberate attempt to close the gap between Curaçao and more established regulators.

However, the Caribbean Financial Action Task Force’s most recent mutual evaluation report paints a less optimistic picture. The assessment noted that while the legal framework has been updated, many of the effectiveness ratings for Curaçao’s AML/CTF regime remain moderate or low. Issues such as insufficient supervisory resources, inconsistent data collection and a lack of targeted enforcement measures indicate that the core weaknesses identified in past evaluations have not been fully addressed.

Institutional capacity gaps and enforcement fragility

Effective regulation is not solely dependent on legislation. It requires the operational capacity to identify, investigate and sanction breaches. Curaçao’s supervisory bodies, including its Financial Intelligence Unit and gaming regulator, have historically been constrained by limited budgets, small staff numbers and a reliance on desk-based reviews rather than proactive on-site inspections. This has allowed non-compliance to persist for extended periods without consequence.

Although a framework for administrative fines and criminal sanctions now exists, public evidence of serious enforcement action remains scarce. Past breaches have often been resolved through negotiated settlements with minimal publicity. Such arrangements can produce swift resolutions but rarely create strong deterrence. Without visible and consistent sanctions, operators may calculate that compliance is less urgent than maintaining business as usual.

Settlements in place of sanctions

A notable example is the reported settlement between twelve operators and the Public Prosecutor’s Office over failures in customer due diligence. Rather than facing suspension or revocation of licences, these operators reportedly agreed to remediation and settlement terms that allowed them to continue operating. While settlements may be practical for securing immediate corrective action, they also risk sending the message that breaches can be managed quietly without lasting reputational damage.

This approach, if repeated, could undermine the credibility of the new AML/CTF framework. For the reforms to be taken seriously by banks, payment service providers and international partners, they must be backed by evidence of enforcement that is both consistent and proportionate to the seriousness of the violations.

The façade of alignment with international standards

The requirement to appoint an AML Compliance Officer is perhaps the most significant change in the new regime. The role is directly comparable to the Money Laundering Reporting Officer in EU jurisdictions and requires both professional qualifications and at least two years of relevant AML experience. On paper, this brings Curaçao in line with established best practice.

Yet without active supervisory follow-up, there is no guarantee that appointed officers will be genuinely empowered to act independently or that they will be provided with the resources to monitor compliance effectively. In jurisdictions where enforcement is robust, compliance officers operate within a culture of accountability, knowing that failure to act can lead to personal liability. It is not yet clear whether Curaçao’s system will foster that level of responsibility or whether the role will, in some cases, exist primarily to satisfy a formal requirement.

Tight timelines and compliance fatigue

The compliance deadlines imposed by the Curaçao Gaming Authority have been tight. For example, the requirement for operators to upload AML policies within six weeks of the April 2025 notification placed significant pressure on both in-house compliance teams and outsourced service providers. While deadlines are necessary to maintain momentum, excessively compressed timeframes can incentivise superficial compliance. Operators may submit templated documents that meet formal requirements without addressing the underlying operational risks.

Meaningful AML/CTF implementation requires more than a written policy. It demands staff training, integration into business processes and ongoing monitoring of effectiveness. Achieving these outcomes within weeks is unrealistic for operators starting from a low baseline of compliance maturity.

Risk-based approach but inconsistent follow-through

Curaçao’s regulations emphasise the risk-based approach endorsed by the FATF. Operators are expected to conduct risk assessments, apply enhanced due diligence to high-risk customers such as politically exposed persons and implement transaction monitoring thresholds. This flexibility is intended to allocate resources proportionately to the level of risk.

However, the CFATF has noted that in practice, supervisory bodies have not consistently demonstrated the ability to evaluate whether operators’ risk assessments are accurate or whether enhanced measures are genuinely applied. Without this oversight, the risk-based model can be exploited to justify lower levels of scrutiny, leaving significant vulnerabilities unaddressed.

Reputation management versus operational reality

There is no doubt that the reforms help Curaçao present a more credible image to the international community. Alignment with EU-style regulations can improve the jurisdiction’s standing with correspondent banks and payment processors, many of which have been cautious about working with Curaçao-licensed entities. For policymakers, the reforms offer a narrative of modernisation and commitment to international standards.

The challenge is that reputational gains achieved through legislative change will quickly erode if enforcement fails to follow. International observers, including regulators in other jurisdictions, will assess the reforms not on the basis of their design but on evidence of their application. If operators can continue business largely unchanged while meeting only the minimum formal requirements, the reforms risk being dismissed as symbolic.

Broader structural weaknesses

Curaçao’s gambling industry has long operated within a licensing structure that allowed master licence holders to issue sub-licences with limited government oversight. This arrangement contributed to a perception of regulatory detachment. While the new regime replaces that structure with direct licensing by the CGA, many of the same industry actors remain active. Without a change in supervisory culture, the regulatory risks inherent in the old model may persist under a new name.

Additionally, AML/CTF compliance in gambling cannot be fully effective without coordination across sectors. Online gambling platforms often use multiple jurisdictions for payment processing, customer onboarding and technical infrastructure. This creates challenges in information sharing and cross-border enforcement. Curaçao’s reforms, while important, must be accompanied by cooperation agreements and mutual assistance arrangements with other regulators if they are to have real impact.

Conclusion: form without substance remains a risk

Curaçao’s new AML/CTF regime contains many elements that, on paper, align it with international best practice. The introduction of dedicated compliance officers, mandatory policy submissions, transaction monitoring thresholds and enhanced due diligence requirements represents a significant evolution from the previous system. However, the effectiveness of these measures will depend entirely on the capacity and willingness of the authorities to enforce them.

The history of light-touch supervision in Curaçao, combined with the CFATF’s continuing concerns about institutional capacity, raises legitimate questions about whether the reforms will be more than a façade. Until the jurisdiction demonstrates consistent, transparent and proportionate enforcement, scepticism will remain justified. Operators may comply with the letter of the law, yet the spirit of genuine financial crime prevention will remain elusive.

FAQs

What are Curaçao's new AML/CTF reforms?
Curaçao introduced mandatory compliance policies, transaction monitoring, and dedicated AML officers to align with international standards.

When did the new regulations come into effect?
The LOK legislation passed in December 2024, with accompanying regulations starting in January 2025.

Who must comply with the new AML/CTF requirements?
Licensed gambling operators and corporate service providers are required to implement AML/CTF measures.

What is the role of the AML Compliance Officer?
The officer ensures adherence to AML/CTF policies, oversees risk assessments, and reports suspicious transactions.

Are the reforms fully enforced yet?
Effectiveness is limited; supervisory bodies face resource constraints and inconsistent enforcement.

What is the risk-based approach in Curaçao's regulations?
Operators must assess customer risk, apply enhanced due diligence for high-risk clients, and monitor transactions proportionally.

Have there been any penalties for non-compliance?
Some operators have settled with the Public Prosecutor’s Office, but major visible sanctions remain rare.

Will these reforms improve Curaçao's international reputation?
Legislation helps perception, but real credibility depends on consistent and transparent enforcement.

Why is enforcement considered fragile?
Limited staff, budget constraints, and reliance on desk reviews reduce the authorities’ ability to sanction violations effectively.

What challenges remain for AML/CTF compliance in Curaçao?
Issues include short compliance deadlines, coordination across jurisdictions, and ensuring that policies translate into genuine operational compliance.

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Sources

1. CSB Group – “Curaçao passes LOK – a game changer for the island’s regulatory framework” – https://www.csbgroup.com/malta-news/online-gaming/curacao-passes-lok-a-game-changer-for-the-islands-regulatory-framework/
2. Delphi Alliance – “Understanding the new Curaçao gaming licence regulations” – https://www.delphialliance.com/post/understanding-the-new-cura%C3%A7ao-gaming-license-regulations
3. SiGMA World – “AML regulations take effect in Curaçao” – https://sigma.world/news/aml-regulations-take-effect-in-curacao/
4. SiGMA World – “Curaçao sets AML/CFT compliance deadline for gambling operators” – https://sigma.world/news/curacao-sets-aml-cft-compliance-deadline-for-gambling-operators/
5. Curaçao Chronicle – “Curaçao Gaming Authority enforces new AML rules for licence holders” – https://www.curacaochronicle.com/post/main/curacao-gaming-authority-enforces-new-aml-rules-for-license-holders/
6. FATF/CFATF – “Mutual Evaluation Report – Curaçao” – https://www.fatf-gafi.org/content/dam/fatf-gafi/fsrb-mer/Curacao-MER-Evalution-CFATF-round4.pdf
7. Next.io – “Curaçao reaches settlement with 12 operators” – https://next.io/news/regulation/curacao-reaches-settlement-12-operators/
8. Rue.ee – “Curaçao gambling licence overview” – https://rue.ee/gambling-license/curacao/