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Financial Institutions Urged to Adopt Best Practices for Compliance in Trinidad and Tobago
As the financial landscape continues to evolve, financial institutions in Trinidad and Tobago are being reminded of the importance of implementing robust compliance programmes to prevent money laundering, financing of terrorism and proliferation financing (ML/FT/PF).
Importance of a Well-Designed Compliance Programme
A well-designed compliance programme is essential for mitigating identified risks and ensuring that financial institutions operate within the bounds of the law. According to experts, each business’s unique needs must be taken into account when developing their compliance programmes.
Key Principles of a Good Compliance Programme
- Customer Due Diligence measures: A good compliance programme should include customer due diligence measures to ensure that customers are properly identified and verified.
- Identification and internal reporting of suspicious transactions: Financial institutions should have policies and procedures in place for identifying and reporting suspicious transactions.
- A risk-based approach to monitoring financial transactions: The compliance programme should take into account various risk factors, including customer types, payment systems, product offerings, jurisdictions they conduct business with, and transactional activities.
- External and independent testing for compliance: Regular testing of the compliance programme is essential to ensure that it is effective and up-to-date.
- Retention of transaction and identification records: Financial institutions must retain all relevant records related to transactions and customer identities.
- High-risk and designated jurisdictions: The compliance programme should include policies and procedures for dealing with high-risk and designated jurisdictions.
Implementation and Maintenance
While templates are available, each compliance programme must be uniquely designed for the specific business. Financial institutions can consult the Financial Intelligence Unit of Trinidad and Tobago’s (FIUTT) Guidance Note on how to structure their Compliance Programme.
Key Steps in Implementing a Compliance Programme
- Sign, date, and circulate the approved Compliance Programme: The approved compliance programme must be signed, dated, and circulated to all staff.
- Train employees on the compliance programme: All employees must be trained on the compliance programme and its policies and procedures.
- Regularly review and update the compliance programme: The compliance programme must be regularly reviewed and updated to ensure that it remains effective and up-to-date.
By following these best practices, financial institutions in Trinidad and Tobago can reduce their risk of money laundering, financing of terrorism, and proliferation financing, and maintain a strong reputation as compliant and responsible financial institutions.