Financial Crime World

Compliance with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Regulations

Training of Financial Services Unit Staff

The Financial Services Unit (FSU) is required to provide comprehensive training to its staff on conducting on-site and off-site inspections of entities and professionals to assess their AML/CFT systems and controls. This ensures that FSU staff are equipped with the necessary knowledge and skills to effectively identify and address potential money laundering and terrorist financing risks.

Establishing Effective Internal Control Systems

Entities and professionals in Trinidad and Tobago must establish a written and effective system of internal controls that provide appropriate policies, processes, and procedures for detecting and preventing activities related to money laundering and terrorist financing. This includes:

  • Providing increased focus on vulnerable operations: Identifying areas where the entity or professional may be more susceptible to money laundering or terrorist financing risks.
  • Regular reviews of risk assessment and management policies: Ensuring that AML/CFT policies are up-to-date, effective, and aligned with changing regulatory requirements.
  • Designating an individual responsible for managing AML/CFT compliance: Appointing a key person who can oversee the implementation and monitoring of AML/CFT measures.
  • Ensuring that money laundering and terrorist financing risks are assessed and mitigated before new products are offered: Conducting thorough risk assessments to ensure that new products or services do not introduce unnecessary AML/CFT risks.

Record Keeping and Reporting Requirements

Entities and professionals must maintain accurate and complete records related to AML/CFT, including:

  • Adequate record-keeping: Maintaining detailed records of all transactions, customer information, and other relevant data.
  • Timely updates in response to changes in regulations, policies, or other initiatives: Ensuring that the entity’s or professional’s internal controls are updated to reflect any changes in AML/CFT regulations.

Risk-Based Customer Due Diligence

Implementing risk-based customer due diligence policies, processes, and procedures is essential for identifying and mitigating potential money laundering and terrorist financing risks. This includes:

  • Identifying high-risk customers: Identifying customers who may be more susceptible to money laundering or terrorist financing risks.
  • Conducting enhanced due diligence: Conducting thorough due diligence on high-risk customers, including verifying their identity and conducting regular reviews of their transactions.

Additional Controls for Higher-Risk Customers, Transactions, and Products

Entities and professionals must implement additional controls as necessary to mitigate potential money laundering and terrorist financing risks. This includes:

  • Setting transaction limits: Establishing limits on the amount that can be transferred or exchanged.
  • Requiring management approvals: Requiring approval from senior management before processing high-risk transactions.

Timely Identification of Reportable Transactions

Entities and professionals must establish mechanisms for the timely identification of reportable transactions, including:

  • Monitoring transactions in real-time: Continuously monitoring transactions to identify any suspicious or reportable activity.
  • Ensuring accurate filing of required reports: Ensuring that all necessary reports are filed accurately and on time.

Adequate Supervision of Employees

Entities and professionals must ensure that employees handling currency transactions, completing reports, or engaging in other activities related to AML/CFT are adequately supervised. This includes:

  • Providing regular training: Providing periodic training to key staff, including front office staff.
  • Conducting regular audits: Conducting regular audits to ensure that employees are following established internal controls.

Establishing a Common Control Framework

Entities with group entities must establish a common control framework to ensure consistency in AML/CFT measures across the organization. This includes:

  • Defining clear policies and procedures: Defining clear policies and procedures for all group entities.
  • Conducting regular audits: Conducting regular audits to ensure that all group entities are following established internal controls.

Disciplining Employees

Entities and professionals must provide for disciplining employees who fail to make timely reports of internal suspicious activity or transactions related to money laundering or terrorist financing. This includes:

  • Establishing clear consequences: Establishing clear consequences for employees who fail to report suspicious activity.
  • Providing regular training: Providing periodic training to key staff, including front office staff.

Independent Testing and Validation

Senior management must be allowed to independently test and validate the development and operation of risk management processes and related internal controls. This includes:

  • Conducting regular audits: Conducting regular audits to ensure that risk management processes are operating effectively.
  • Reviewing and updating policies: Reviewing and updating policies to reflect any changes in AML/CFT regulations.

Communicating the Written System of Internal Controls

Entities and professionals must establish policies, processes, and procedures for communicating their written system of internal controls to employees. This includes:

  • Providing regular training: Providing periodic training to key staff, including front office staff.
  • Conducting regular audits: Conducting regular audits to ensure that employees are following established internal controls.

Entering into Business Relationships

Entities and professionals must establish policies, processes, procedures, and conditions governing the entering into business relationships. This includes:

  • Conducting thorough due diligence: Conducting thorough due diligence on potential business partners.
  • Establishing clear terms and conditions: Establishing clear terms and conditions for business relationships.

These requirements aim to ensure that entities and professionals in Trinidad and Tobago implement effective AML/CFT measures to prevent and detect money laundering and terrorist financing activities.