Financial Crime World

St. Kitts and Nevis Businesses Must Comply with AML/CTF Guidelines

The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation has come into effect, requiring all regulated businesses in St. Kitts and Nevis to adhere to strict guidelines.

Financial Services Regulatory Commission’s Role

The Financial Services Regulatory Commission (FSRC), responsible for regulating and supervising compliance with AML/CFT requirements, has implemented a risk-based supervision framework to ensure regulated entities are operating in a sound financial position.

Risk-Based Supervision Framework

The FSRCC’s Risk-Based Supervision Framework, adopted in May 2015 and revised in June 2017, applies to both off-site and on-site examinations of regulated entities. Comprehensive and regular on-site examinations are conducted to verify that businesses are complying with the Financial Services Regulatory Commission Act and relevant enactments specified in Schedule 1.

On-Site Examination Process

During an on-site examination, examiners from the FSRCC assess whether policies and procedures are in place to ensure compliance with AML/CFT legislation and identify risk appropriately. Specifically, regulated entities must:

  • Identify, verify, obtain, maintain, and monitor customers and beneficial owners of legal persons and legal arrangements.
  • Make customer information available to competent authorities and those conducting AML/CFT due diligence.

Required Documents

Examiners review relevant customer files and citizenship by investment applications to ensure adequate Know Your Customer (KYC) and Customer Due Diligence (CDD) documents are obtained and up-to-date. Required documents include:

  • Government-issued passport or identity card with photo ID, notarized
  • Two original letters of reference from recognized institutions
  • Proof of address via utility bill
  • Customer risk assessments
  • Source of funds and wealth declarations
  • Accounting records

Assessment of Policies and Procedures

Examiners also assess regulated entities’ policies, practices, procedures, and internal controls for compliance with AML/CFT legislation. These include:

  • Ongoing monitoring programs
  • Training schedules
  • Suspicious transaction reporting
  • Record-keeping systems
  • Retention periods
  • Condition of records

Results of On-Site Examination

The results of an on-site examination influence the intensity and frequency of monitoring, with businesses operating satisfactorily requiring less frequent monitoring than those with weaknesses and deficiencies.

Conclusion

Compliance is crucial for regulated entities in St. Kitts and Nevis to ensure a sound financial position and prudent business management. By adhering to AML/CFT guidelines, businesses can maintain trust and confidence among stakeholders while minimizing the risk of money laundering and terrorist financing.