Financial Crime World

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

The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation has significant implications for fintech companies in St. Kitts and Nevis. All regulated businesses in the country are required to comply with AML/CFT requirements by the Financial Services Regulatory Commission (FSRC).

Regulatory Framework

The FSR-Nevis Branch is responsible for regulating and supervising regulated businesses’ compliance with AML/CFT regulations using a risk-based supervision framework adopted in May 2015. This framework guides both off-site and on-site examinations of regulated entities.

Supervisory Duties

As part of its supervisory duties, the FSRC conducts comprehensive and regular on-site examinations to ensure that financial institutions are complying with relevant laws, regulations, and enactments. These examinations aim to assess whether entities have established appropriate policies and procedures to identify and mitigate risks related to money laundering and terrorist financing.

Examination Process

During these examinations, examiners review customer files, including information on beneficial owners of legal persons and legal arrangements. Fintech companies must provide adequate Know Your Customer (KYC) and Customer Due Diligence (CDD) documents for beneficial owners, which may include:

  • Passport copies
  • Identity cards
  • Letters of reference
  • Proof of address

Examiners also assess a company’s policies, practices, procedures, and internal controls to ensure compliance with AML/CFT regulations. This includes:

  • Ongoing monitoring programs
  • Training schedules
  • Suspicious transaction reporting
  • Record keeping systems
  • Retention periods
  • Conditions for maintaining records

Results of Examination

The results of on-site examinations influence the intensity and frequency of future monitoring. Fintech companies that operate in a satisfactory manner will require less frequent monitoring than those with weaknesses or deficiencies. As such, it is essential for fintech firms to prioritize AML/CFT compliance to avoid regulatory issues and maintain their reputation in the financial sector.

By complying with AML/CFT regulations, fintech companies can ensure a smooth operation and maintain trust with customers and regulators alike.