Financial Crime World

Financial Crime Definition Takes Center Stage as St. Kitts and Nevis Moves to Enhance Transparency

In an effort to combat financial crime, the Government of St. Kitts and Nevis has defined financial crime as any activity that involves money laundering or the financing of terrorism.

What is Financial Crime?

According to the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation, financial crime is a serious threat to the stability and integrity of the country’s financial system. The definition applies to all regulated businesses operating in Nevis.

Risk-Based Supervision Framework

To combat this menace, the Financial Services Regulatory Commission (FSRC) has adopted a Risk-Based Supervision Framework (RBS). This framework allows the FSRC to assess the risk posed by each regulated entity and tailor its supervision accordingly. The RBS enables the Commission to focus its resources on those entities that pose the greatest risk to the financial system, thereby ensuring that the country’s financial infrastructure is protected from criminal activities.

Customer Due Diligence

In addition to defining financial crime, the AML/CFT legislation requires all regulated entities to:

  • Identify and verify customers and beneficial owners (BOs) of legal persons and legal arrangements
  • Obtain and maintain accurate records of this information
  • Conduct thorough due diligence on clients

The FSRC conducts regular on-site examinations of regulated entities in Nevis to ensure compliance with the AML/CFT legislation. During these examinations, Examiners from the FSRC review relevant customer files and citizenship by investment applications to verify that adequate Know Your Customer (KYC) and Customer Due Diligence (CDD) documents are obtained and kept up-to-date.

Monitoring and Compliance

The Examiners also assess the regulated entity’s policies, practices, procedures, and internal controls for compliance with AML/CFT legislation. This includes:

  • Ongoing monitoring programs
  • Training schedules
  • Suspicious transaction reporting
  • Record keeping systems
  • Retention period and condition of records

Conclusion

Financial crime is a serious threat to the stability and integrity of St. Kitts and Nevis’ financial system. To combat this menace, the Government has defined financial crime and implemented measures to prevent its occurrence. The FSRC plays a crucial role in regulating and supervising regulated businesses to ensure compliance with AML/CFT requirements.