Limited Guidance, Awareness, and Feedback Contribute to Low Numbers of Suspicious Transaction Reports

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St. Kitts and Nevis is facing concerns over the limited guidance, awareness, and feedback provided by financial institutions and designated non-financial businesses and professions (DNFBPs), which may be contributing to the low numbers of suspicious transaction reports (STRs) submitted to the Financial Intelligence Unit (FIU).

Lack of Understanding among Financial Institutions

Some financial institutions (FIs) and DNFBPs have demonstrated a lack of understanding of their reporting obligations, resulting in a low level of STR submissions. This is despite the country’s vulnerability assessment indicating that FIs and DNFBPs should be reporting more frequently.

Ineffective Typologies and Advisories Distribution

The FIU distributes typologies and advisories to FIs and DNFBPs, but this has not been effective in improving reporting rates.

Limited Request for Financial Intelligence from Law Enforcement Agencies

The review found that the Royal St. Christopher & Nevis Police Force (RSCNPF) units outside the WCCU do not regularly request financial intelligence from the FIU.

Concerns over FIU’s IT System

The review highlighted concerns over the IT system of the FIU, which is overseen by an officer external to the FIU and raises security concerns about data confidentiality and independence.

Well-Established Technical Framework for Investigating Money Laundering

St. Kitts and Nevis has a well-established technical framework for investigating money laundering (ML) and conducting prosecutions. The WCCU, a unit of the RSCNPF, is responsible for ML investigations and has access to databases of other law enforcement agencies.

Low Number of ML Investigations and Convictions

However, the number of ML investigations remains low, with only six cases reported in 2019 and 2020. Additionally, there have been no ML convictions in St. Kitts and Nevis since the NRA period, making it impossible to assess the effectiveness of sanctions.

Limited Experience in Asset Recovery and Confiscation Proceedings

The review also highlighted concerns over the country’s approach to confiscation proceedings and asset forfeiture. While legislative infrastructure was amended to include civil forfeiture in March 2021, 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).

Need for Improved Guidance, Awareness, and Feedback

Overall, the review highlights the need for improved guidance, awareness, and feedback to increase reporting rates by FIs and DNFBPs, as well as enhanced cooperation between law enforcement agencies and financial institutions to combat ML and TF.