St. Kitts and Nevis’ Fight Against Money Laundering: Guidance and Awareness Remain Key Challenges

Introduction

A recent report has highlighted significant shortcomings in St. Kitts and Nevis’ efforts to combat money laundering (ML), with limited guidance, awareness, and feedback potentially contributing to the low number of suspicious transaction reports (STRs) submitted by financial institutions and designated non-financial businesses and professions (DNFBPs).

Technical Framework for Investigating ML

While St. Kitts and Nevis has a well-established technical framework for investigating ML and conducting prosecutions, there are concerns about the lack of understanding among financial institutions and DNFBPs regarding their reporting obligations. The Financial Intelligence Unit (FIU) distributes typologies and advisories to these entities, but it appears that they are not fully utilizing this information.

Challenges with IT System and Data Confidentiality

The report also notes that the FIU’s IT system is overseen by an officer external to the unit, raising concerns about data confidentiality and independence. Furthermore, 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 as a matter of policy.

Investigation Limitations

Despite these challenges, investigators at the WCCU, a unit of the RSCNPF, are well-trained and experienced. However, the report suggests that ML investigations are limited, with only six cases reported in 2019 and 2020, and two in the first three months of 2021.

Lack of Aggressive Investigation

The WCCU’s lack of aggressive investigation into ML cases is also concerning, particularly given St. Kitts and Nevis’ status as a small international financial centre with a foreign clientele and a substantial number of corporate entities.

Confiscation Procedures

In addition, the report highlights the need for improved confiscation procedures, with limited experience in asset recovery and no dedicated unit within the WCCU or Office of the Director of Public Prosecutions (DPP) for conducting confiscation proceedings or asset forfeiture. The lack of a national policy objective for the confiscation of criminal proceeds, instrumentalities, and property equivalent to ML until March 2021 is also seen as a significant gap.

Conclusion

The report concludes that St. Kitts and Nevis must address these challenges in order to effectively combat money laundering and terrorist financing (TF). The country needs to prioritize guidance, awareness, and feedback among financial institutions and DNFBPs, as well as improve its IT system and data confidentiality measures. Additionally, the WCCU and Office of the DPP need to develop a more aggressive approach to ML investigations and improve confiscation procedures.