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Limited Guidance, Awareness, and Feedback Contribute to Low Numbers of STRs in St. Kitts and Nevis
Evaluation Reveals Low Level of Suspicious Transaction Reports
A recent evaluation has revealed that the level of Suspicious Transaction Reports (STRs) submitted by Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs) to the Financial Intelligence Unit (FIU) in St. Kitts and Nevis is low, despite the country’s vulnerability assessment indicating otherwise.
Lack of Understanding and Guidance
According to the report, FIs and DNFBPs have demonstrated a lack of understanding of their reporting obligations, which has resulted in a limited number of STRs being submitted. The FIU distributes typologies and advisories to FIs and DNFBPs, but it appears that this guidance is not being adequately utilized.
Concerns about FIU’s Information Technology System
Furthermore, the report highlights concerns about the FIU’s information technology (IT) system, which is overseen by an officer external to the FIU who is employed by the Ministry of Finance. This raises security concerns about the confidentiality and independence of FIU data.
Limited Efforts in Investigating Money Laundering and Terrorist Financing
The evaluation also found that while St. Kitts and Nevis has a well-established technical framework for investigating Money Laundering (ML) and Terrorist Financing (TF), there are limited efforts to aggressively investigate these crimes. The Royal St. Christopher & Nevis Police Force’s units outside the Financial Intelligence Unit do not regularly request financial intelligence from the FIU, which hinders investigations.
Limited Experience in Asset Recovery
In addition, the report notes that the country has limited experience in asset recovery with foreign counterparts and has not pursued confiscation of criminal proceeds for ML or TF as a policy objective.
Recommendations for Improvement
The lack of guidance, awareness, and feedback is likely contributing to the low numbers of STRs submitted by FIs and DNFBPs, which in turn hinders investigations and prosecutions. The authorities must take steps to address these issues and improve their efforts to combat ML and TF.
Key Recommendations:
- Provide adequate guidance and training to FIs and DNFBPs on reporting obligations
- Improve awareness and understanding of the importance of STRs among FIs and DNFBPs
- Enhance feedback mechanisms to ensure that FIs and DNFBPs receive timely and relevant information about their reporting responsibilities
- Strengthen the FIU’s IT system to ensure confidentiality, independence, and security of data
- Increase efforts in investigating ML and TF crimes, including regular requests for financial intelligence from the FIU
Source: Mutual Evaluation Report of St. Kitts and Nevis 2022, CFATF