Financial Crime World

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Financial Regulation Enforcement Agencies in Seychelles Amend Laws to Meet International Standards

Seychelles has taken a significant step towards strengthening its financial sector by amending six laws to address deficiencies identified by the Eastern and Southern Africa Anti-Money Laundering Group.

Amendments Approved by National Assembly

The amendments were approved by the National Assembly last week for the following laws:

  • Mutual Legal Assistance in Criminal Matters Act
  • Extradition Act
  • Anti-Money Laundering and Countering the Financing of Terrorism Act
  • Beneficial Ownership Act
  • International Trust Act
  • Prevention of Terrorism Act

Background and Need for Amendments

According to Secretary of State for Finance Patrick Payet, the need for these amendments arose from a national risk assessment conducted in 2017. The report identified risks within Seychelles’ financial sector, rating the country as:

  • Compliant in 20 areas
  • Partially compliant in 16 areas
  • Non-compliant in four areas

Payet emphasized that the law on anti-money laundering and financing of terrorism activities has existed since 2006 but was reviewed to ensure it aligns with international standards.

Key Changes

The amendments include:

  • The Financial Intelligence Unit (FIU) will now have an administrative role and will sign agreements with other enforcement agencies for swift exchange of information when identifying law offenders.
  • Addressing the missing element of proliferation financing, ensuring coordination between the National Committee for AML/CFT and National Committee for Terrorism Financing.
  • Allowing for the sharing of information without being affected by laws on secrecy or confidentiality.

Additionally, non-for-profit organisations (NGOs) must undergo risk assessments, with high-risk NGOs’ names kept confidential to prevent disruption to their operations. The International Trust Act was also amended to require trustees to share information with financial institutions when forming business relationships or performing transactions above a set threshold.

Consequences of Non-Compliance

The Financial Action Task Force (FATF) has given Seychelles three years to implement the required reforms. If Seychelles fails to comply, it may face consequences such as:

  • Losing banking relationships
  • Credit/debit card transactions being deemed invalid

Payet emphasized that Seychelles aims to avoid these consequences by implementing the necessary changes.

Future Plans

The country is already working on reviewing laws relating to virtual asset service providers, registration of associations, and asset management regime.