Financial Crime World

St. Kitts and Nevis National Risk Assessment Reveals Areas of Concern

A recent national risk assessment for St. Kitts and Nevis has identified several areas of concern regarding money laundering and terrorist financing (ML/TF) threats. The assessment, conducted by a team of international experts, evaluated the country’s vulnerabilities to ML/TF and its compliance with anti-money laundering (AML)/CFT regulations.

High National ML/TF Threat Rating

According to the assessment, St. Kitts and Nevis has a high national ML/TF threat rating due to several factors, including:

  • The size of its financial sector relative to its GDP
  • The types of products and services offered by local entities
  • Inadequate AML/CFT legislation and regime in some areas

Vulnerability Ratings

The assessment also produced vulnerability ratings for various sectors, with:

  • Commercial banking, international banking, and money services businesses (MSBs) being identified as high-risk areas
  • Development bank, domestic insurance, international insurance, securities, credit unions, trust and corporate service providers, and real estate sector deemed medium to low risk

Proceeds of Crime

The assessment found that proceeds of crime in St. Kitts and Nevis are primarily generated from:

  • Larceny
  • Drug-related offenses
  • Robbery
  • Other gun-related crimes
  • There have been no convictions for money laundering to date.

Financial Intelligence Unit (FIU) Activities

During the assessment period, the FIU processed suspicious transaction reports (STRs) mainly from banks and MSBs. However:

  • The overall level of STR reporting was low in some sectors
  • Greater awareness raising and capacity building among Compliance Officers and AML/CFT Departments are needed.

Law Enforcement Efforts

Law enforcement efforts were identified as needing improvement, particularly with regards to:

  • Augmentation of human resources in the FIU, WCCU, and Police Force
  • Consistent and coherent record keeping practices among relevant agencies within the Police Force and Court System.

Recommendations

The assessment recommends that:

  • Money laundering be pursued more vigorously from an investigative point of view and in terms of prosecution.
  • There is a need for greater focus on confiscation of the proceeds of crime even in the absence of actual money laundering charges.
  • Extensive work is ongoing on civil forfeiture/asset-based recovery legislation to strengthen and expand the basis for such measures.

Tax Crimes

St. Kitts and Nevis has an effective mechanism for exchanging information for tax purposes, supported by:

  • The St. Kitts and Nevis (Mutual Exchange of Information on Tax Matters) Act
  • The jurisdiction has been rated as Largely Compliant in the most recent assessment by a major international organization.

Conclusion

Overall, the national risk assessment highlights the need for greater awareness raising and capacity building among local entities, improved law enforcement efforts, and enhanced record keeping practices to address the ML/TF threats facing St. Kitts and Nevis.