Financial Crime World

Limited Awareness and Feedback Hamper Fight Against Money Laundering in St. Kitts and Nevis

Lack of Awareness and Feedback among Financial Institutions and DNFBPs

A recent evaluation has revealed that a lack of awareness and feedback among financial institutions and designated non-financial businesses and professions (DNFBPs) is a major obstacle in submitting Suspicious Transaction Reports (STRs). The number of STRs submitted by these entities is low, which is not commensurate with the country’s vulnerability assessment.

  • This lack of understanding of reporting obligations has led to a significant gap in the fight against money laundering.
  • The Financial Intelligence Unit (FIU) distributes typologies and advisories to financial institutions and DNFBPs, but there is limited use of financial intelligence by the Competent Authority for Tax Matters (CATM) and the Royal St. Christopher & Nevis Police Force (RSCNPF).

Limited Use of Financial Intelligence

  • The IT system of the FIU is overseen by an external officer, raising concerns about data confidentiality and independence.
  • Despite having a well-established technical framework to investigate money laundering and conduct prosecutions, the country’s investigators are hindered by limited access to financial intelligence.

Low Number of Money Laundering Investigations

  • There were only six ML investigations in 2019 and 2020, and two in the first three months of 2021.
  • This suggests that money laundering is not being aggressively investigated by the authorities.
  • Moreover, there have been no ML investigations for foreign predicates or corporate entities.

Lack of National Policy Objective for Confiscation

  • The country lacked a national policy objective for the confiscation of criminal proceeds, instrumentalities, and property of equivalent value for money laundering until recently.
  • The legislative infrastructure was amended to include civil forfeiture in March 2021, but there is no dedicated unit within the WCCU or DPP for conducting confiscation proceedings or asset forfeiture.

Recommendations

  • Measures should be taken to improve financial intelligence sharing, investigation, and prosecution of money laundering cases.