St Kitts and Nevis Struggling to Combat Money Laundering, Report Finds

Shortcomings in Combating Money Laundering (ML) and Terrorist Financing (TF)

A recent report has highlighted several shortcomings in St Kitts and Nevis’ efforts to combat ML and TF, including a lack of guidance, awareness, and feedback among financial institutions and designated non-financial businesses and professions (DNFBPs).

Low Level of Suspicious Transaction Reports

The level of suspicious transaction reports (STRs) submitted by FIs and DNFBPs is low.
The number of STRs does not align with the country’s vulnerability assessment.
Many financial institutions and DNFBPs lack understanding of their reporting obligations, resulting in a significant number of STRs not being submitted.

Limited Use of Typologies and Advisories

The Financial Intelligence Unit (FIU) distributes typologies and advisories to FIs and DNFBPs, but these are not being effectively utilized.
This limits the effectiveness of the FIU’s efforts to combat ML and TF.

Challenges in Financial Intelligence Gathering

The Royal St Christopher & Nevis Police Force’s financial intelligence gathering capabilities are limited.
There is a lack of regular requests for financial intelligence from outside the WCCU.

Concerns About Information Technology System

The FIU’s information technology system, overseen by an external officer employed by the Ministry of Finance, raises security concerns about data confidentiality and independence.

Positive Developments

St Kitts and Nevis has a well-established technical framework for investigating ML and conducting prosecutions.
The WCCU, a unit of the Royal St Christopher & Nevis Police Force, is responsible for conducting investigations and has a good track record of success.

Challenges in ML Investigations

There are significant challenges in terms of ML investigations, with only six investigations conducted in 2019 and 2020, and two in the first three months of 2021.
The lack of aggressive investigation and prosecution of ML cases is a major concern.

There is a lack of national policy objective for the confiscation of criminal proceeds, instrumentalities, and property of equivalent value for ML until March 2021.
There was no dedicated unit within the WCCU or DPP for conducting confiscation proceedings or asset forfeiture under POCA.

Conclusion

Overall, the report concludes that St Kitts and Nevis needs to address these shortcomings in order to effectively combat money laundering and terrorist financing.