Financial Crime World

Fintech Companies in St. Kitts and Nevis Must Comply with AML/CFT Regulations

The Financial Services Regulatory Commission (FSRC) has emphasized the importance of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) compliance for all fintech companies operating in St. Kitts and Nevis.

Definition of Money Laundering and Terrorism

According to the Proceeds of Crime Act, Cap 4.28, money laundering is defined as engaging directly or indirectly in a transaction that involves money or property that is the proceeds of crime. The Anti-Terrorism Act, Cap 4.02, criminalizes terrorism and gives effect to the suppression and elimination of international terrorism.

Risk-Based Supervision Framework (RBS)

The FSRCC has adopted a Risk-Based Supervision Framework (RBS) to regulate and supervise fintech companies’ compliance with AML/CFT requirements. The RBS is applicable to both off-site and on-site examinations of regulated entities.

Comprehensive On-Site Examinations

Comprehensive on-site examinations are conducted to ensure that fintech companies comply with the Financial Services Regulatory Commission Act, Cap 21.10, and AML/CFT legislation. Examiners assess whether policies and procedures are in place to identify risk and prevent money laundering.

Customer Due Diligence Requirements

Fintech companies must also identify, verify, obtain, maintain, and monitor their customers and beneficial owners (BOs) of legal persons and legal arrangements. To increase transparency, entities and trustees must make this information available to the competent authorities and those conducting AML/CFT due diligence.

  • Documents required include:
    • Copy of customer’s/BO’s passport or identity card
    • Letters of reference
    • Proof of address
    • Other corporate documents

Monitoring and Enforcement

The FSRCC monitors fintech companies’ compliance by reviewing relevant customer files and citizenship by investment applications. Examiners also assess whether adequate Know Your Customer (KYC) and Customer Due Diligence (CDD) documents for BOs of legal persons and legal arrangements are obtained and kept up-to-date.

Enforceable Guidelines and Regulations

Enforceable guidelines and regulations include:

  • Anti-Money Laundering Regulations 2011
  • Anti-Terrorism (Prevention of Terrorist Financing) Regulations 2011
  • Financial Services (Implementation of Industry Standards) Regulations, 2011
  • Anti-Terrorism De-Listing Procedures Regulations, 2011

The Role of the Financial Intelligence Unit (FIU)

The Financial Intelligence Unit (FIU) is responsible for receiving, collecting, analyzing, and acting upon reports of suspicious transactions from fintech companies. The FIU performs investigations, establishes a database for detecting money laundering, and disseminates information on suspicious transactions to competent authorities.

Reporting Suspicious Transactions

All fintech companies are required to report suspicious transactions to the competent authority (FIU). Failure to report suspicion of money laundering is an offence under the Proceeds of Crime Act Cap 4.28.