Limited Guidance, Awareness, and Feedback Hamper Fight Against Money Laundering in St. Kitts and Nevis
St. Kitts and Nevis is struggling to effectively combat money laundering (ML) due to limited guidance, awareness, and feedback among key stakeholders, according to a recent evaluation.
Limited Guidance and Awareness Among Key Stakeholders
Some financial institutions and designated non-financial businesses and professions (DNFBPs) are failing to submit Suspicious Transaction Reports (STRs) to the Financial Intelligence Unit (FIU), despite their reporting obligations. This lack of understanding is contributing to the low numbers of STRs submitted, which is not commensurate with the country’s vulnerability assessment.
- The FIU distributes typologies and advisories to financial institutions and DNFBPs, but these efforts appear to have a limited impact.
- The Competent Authority for Tax Matters (CATM) and the Royal St. Christopher & Nevis Police Force (RSCNPF) units outside the Financial Intelligence Unit (FIU) do not regularly request financial intelligence from the FIU.
Security Concerns Over FIU’s IT System
The report highlights concerns over the security of the FIU’s IT system, which is overseen by an officer external to the FIU who is employed by the Ministry of Finance. This raises questions about the confidentiality and independence of the FIU’s data.
Established Framework for Investigating ML and Conducting Prosecutions
Despite these challenges, St. Kitts and Nevis has a well-established technical framework for investigating ML and conducting prosecutions. The Western Caribbean Currency Union (WCCU) conducts ML investigations, which are led by experienced investigators. However, the number of ML investigations is low, with only six cases reported in 2019 and 2020.
National Policy Objective for Confiscation of Criminal Proceeds
The report notes that there is no national policy objective for the confiscation of criminal proceeds, instrumentalities, and property of equivalent value for ML until recently, when legislative infrastructure was amended to include civil forfeiture. Additionally, there is no dedicated unit within the WCCU or Director of Public Prosecutions (DPP) for conducting confiscation proceedings or asset forfeiture under the Proceeds of Crime Act.
Recommendations for Improvement
The report concludes that St. Kitts and Nevis needs to address these shortcomings to effectively combat ML and TF. This includes:
- Providing guidance and training to financial institutions and DNFBPs
- Improving awareness of reporting obligations
- Strengthening the FIU’s IT security
- Establishing a national policy objective for confiscation and asset recovery to prevent the misuse of proceeds from criminal activity