Financial Crime World

Limited Guidance and Feedback Contribute to Low STRs Reporting in St. Kitts and Nevis

Inadequate Suspicious Transaction Reports (STRs) Reporting by Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs)

A recent assessment has revealed that the reporting of Suspicious Transaction Reports (STRs) by FIs and DNFBPs in St. Kitts and Nevis is woefully inadequate, with some entities demonstrating a lack of understanding of their reporting obligations.

Limited Guidance and Feedback from Authorities

The report highlights that the Financial Intelligence Unit (FIU) distributes typologies and advisories to FIs and DNFBPs, but this information appears not to be having a significant impact on STRs reporting. The Competent Authority for Tax Matters (CATM) and the Royal St. Christopher & Nevis Police Force (RSCNPF) units outside of the Financial Intelligence Unit (FIU) do not regularly request financial intelligence from the FIU, further exacerbating the issue.

Security Concerns regarding FIU’s Information Technology System

Furthermore, security concerns have been raised regarding the FIU’s information technology system, which is overseen by an external officer employed by the Ministry of Finance. This raises questions about data confidentiality and independence.

Well-established Technical Framework for Investigating Money Laundering (ML) and Conducting Prosecutions

The report also notes that St. Kitts and Nevis has a well-established technical framework for investigating ML and conducting prosecutions, with investigators at the WCCU unit of the RSCNPF being well-trained and experienced. However, ML investigations are limited in scope:

  • Only six cases were reported in 2019 and 2020.
  • Two cases were reported in the first three months of 2021.

Lack of Aggressive Investigation into ML Cases

The lack of aggressive investigation into ML cases is attributed to a lack of guidance and feedback from authorities, resulting in low levels of confiscation of criminal proceeds. The report also highlights that there has been no opportunity for the use of civil asset forfeiture or confiscation mechanisms during the review period.

National Policy Objective for Confiscation of Criminal Proceeds

In addition, St. Kitts and Nevis does not have a national policy objective for the confiscation of criminal proceeds, instrumentalities, and property of equivalent value for ML until March 2021, and there is no dedicated unit within the WCCU or DPP for conducting confiscation proceedings or asset forfeiture under the Proceeds of Crime Act (POCA).

Recommendations to Improve Anti-Money Laundering Regime

The report concludes that limited guidance, awareness, and feedback from authorities are contributing factors to the low reporting of STRs by FIs and DNFBPs in St. Kitts and Nevis, and recommends measures to improve the country’s anti-money laundering regime.

  • Provide regular guidance and feedback to FIs and DNFBPs on their reporting obligations.
  • Enhance awareness among FIs and DNFBPs about the importance of reporting suspicious transactions.
  • Improve the technical framework for investigating ML and conducting prosecutions.
  • Establish a national policy objective for the confiscation of criminal proceeds, instrumentalities, and property of equivalent value for ML.
  • Create a dedicated unit within the WCCU or DPP for conducting confiscation proceedings or asset forfeiture under the Proceeds of Crime Act (POCA).