Limited Guidance, Awareness, and Feedback Hamper Fight Against Money Laundering in St. Kitts and Nevis
A recent assessment of St. Kitts and Nevis’ efforts to combat money laundering (ML) has revealed that the country is struggling to tackle this issue due to limited guidance, awareness, and feedback.
Lack of Understanding among Financial Institutions and DNFBPs
Some financial institutions and designated non-financial businesses and professions (DNFBPs) are not reporting suspicious transactions as required by law. This lack of understanding of their obligations is contributing to a low number of Suspicious Transaction Reports (STRs) submitted to the country’s Financial Intelligence Unit (FIU).
Ineffective Utilization of Typologies and Advisories
The report found that the FIU is distributing typologies and advisories to financial institutions and DNFBPs, but these efforts are not being utilized effectively. The Competent Authority for Tax Matters and the Royal St. Christopher & Nevis Police Force (RSCNPF) are also failing to regularly request financial intelligence from the FIU.
Concerns about Data Confidentiality and Independence
The country’s information technology system is overseen by an external officer, raising concerns about data confidentiality and independence.
Progress in Investigating ML Cases
Despite these challenges, St. Kitts and Nevis has made some progress in investigating ML cases. The WCCU, a unit of the RSCNPF, has conducted six ML investigations in 2019 and 2020, and two in the first three months of 2021. However, the report noted that there is a lack of aggressive investigation into ML cases, particularly those involving foreign predicates or corporate entities.
Limited Convictions and Pursuit of Confiscation Proceedings
The country’s courts have seen few ML convictions, with no convictions recorded during the review period. In lieu of securing an ML conviction, authorities are seeking to pursue confiscation proceedings and asset forfeiture.
Improvements Needed in Confiscation Regime
St. Kitts and Nevis has recently implemented measures to improve its confiscation regime, including the establishment of a civil asset forfeiture mechanism. However, there is still no dedicated unit within the WCCU or DPP for conducting confiscation proceedings or asset forfeiture under the Proceeds of Crime Act (POCA).
Recommendations
The report concluded that St. Kitts and Nevis needs to strengthen its efforts to combat ML by improving guidance, awareness, and feedback among financial institutions and DNFBPs. The country must also enhance its investigation and prosecution capabilities, as well as improve its confiscation regime to effectively tackle this serious crime.
Key Recommendations:
- Improve guidance, awareness, and feedback among financial institutions and DNFBPs
- Enhance investigation and prosecution capabilities
- Improve confiscation regime by establishing a dedicated unit within the WCCU or DPP for conducting confiscation proceedings and asset forfeiture under POCA.