Financial Crime World

Seychelles Introduces Tougher Rules on Record-Keeping and Reporting Suspicious Transactions

The Seychelles government has introduced new regulations to strengthen its efforts against money laundering and the financing of terrorism. As part of these efforts, all reporting entities are now required to appoint a Chief Compliance Officer (CRO) responsible for Anti-Money Laundering (AML)/Combating the Financing of Terrorism (CFT) compliance.

Responsibilities of the Chief Compliance Officer

The CRO must be a senior officer with sufficient qualifications and experience to comply with AML/CFT laws. Key responsibilities include:

  • Serving as the liaison point with the Financial Intelligence Unit (FIU) and relevant supervisory authorities in Seychelles
  • Possessing independence and authority to train and supervise all other officers, employees, and agents within the organization
  • Establishing and maintaining a manual of compliance procedures
  • Setting up an audit function to test AML/CFT procedures and systems
  • Taking overall responsibility for all Suspicious Transaction Reports (STRs)
  • Ensuring that all officers, employees, and agents are screened, trained, and comply with relevant obligations under AML/CFT laws

Requirements for the Chief Compliance Officer

The CRO must be resident in Seychelles at all times. It is highly recommended that an alternate be appointed to assume the prescribed responsibilities and duties in the CRO’s absence. For entities operating closely together within a group, a single CRO at group level may be designated.

Importance of Ongoing Monitoring and Reviewing Arrangements

The guidelines emphasize the importance of ongoing monitoring and reviewing arrangements on a regular basis to ensure compliance with internal procedures and update them in light of any amendments to the AML/CFT legislation.

Customer Due Diligence Guidelines

In related news, the Seychelles Financial Services Authority (FSA) has issued guidelines on Customer Due Diligence (CDD), which highlights four key components:

  • Identifying customers and verifying their identity
  • Identifying beneficial owners and taking reasonable measures to verify their identity
  • Obtaining information about the nature of the business relationship and the customer or beneficial owner’s business
  • Taking reasonable measures to ascertain the purpose of one-off transactions

The FSA has also emphasized the importance of understanding the concept of beneficial ownership, which is a broader concept that focuses on real benefit and/or ultimate effective control, rather than just legal ownership.

Conclusion

These new regulations aim to enhance Seychelles’ efforts against money laundering and financing of terrorism by ensuring that reporting entities have robust record-keeping and reporting systems in place.