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Mutual Evaluation Report of Turks and Caicos Islands

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The Caribbean Financial Action Task Force (CFATF) has released a Mutual Evaluation Report (MER) on Turks and Caicos Islands, assessing the country’s compliance with anti-money laundering and combating financing of terrorism (AML/CFT) requirements. This article summarizes the key points related to recommendations 10 and 14.

Recommendation 10: Customer Due Diligence

Progress in Addressing Deficiencies

Turks and Caicos Islands has made significant progress in addressing all deficiencies related to customer due diligence (CDD). The country has amended its AML/PTF Code and Regulations, which now require financial institutions (FIs) to review the CDD of existing customers based on materiality and risks.

Enhanced Due Diligence Measures

Financial institutions are required to apply enhanced due diligence (EDD) measures for specific situations and circumstances that present a higher risk of money laundering or terrorist financing. This includes:

  • Reviewing the CDD of existing customers based on materiality and risks
  • Applying EDD measures for high-risk transactions and customers
  • Conducting regular reviews of customer relationships and transactions

Recommendation 14: Money Transmitters

Progress in Addressing Deficiencies

Turks and Caicos Islands was previously rated partially compliant with Recommendation 14. However, the country has since addressed the deficiencies by amending the Money Transmitters Ordinance to define money transmission more broadly.

New Definition of Money Transmission

The revised ordinance defines money transmission as including the payment of a corresponding sum in any other form through a communication or clearing network. This includes:

  • Payment services
  • Transfer services
  • Remittance services
  • Electronic funds transfer services

Powers to Identify and Investigate Unauthorized MSBs

Carrying out money service business (MSB) without a license is now an offense, and the Financial Services Commission (FSC) has powers to identify and investigate unauthorized MSBs.

Key Takeaways

  • Turks and Caicos Islands has made significant progress in addressing AML/CFT deficiencies.
  • The country’s CDD provisions now apply to trusts, and FIs are required to review existing customers’ CDD based on materiality and risks.
  • The Money Transmitters Ordinance has been amended to define money transmission more broadly, and carrying out MSB without a license is now an offense.

Overall, the report suggests that Turks and Caicos Islands has made significant efforts to strengthen its AML/CFT framework and address technical deficiencies.