Financial Crime World

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Seychelles Financial Intelligence Unit Warns of Severe Consequences for Non-Compliance with Anti-Money Laundering Regulations

VICTORIA, Seychelles - The Seychelles Financial Intelligence Unit (FIU) has issued a stern warning to financial institutions and businesses in the country, reminding them that failure to comply with anti-money laundering (AML) regulations can result in severe consequences.

Consequences of Non-Compliance

According to the FIU, reporting entities are required to make disclosures under the Prevention of Terrorism Act. Failure to comply with these core obligations may lead to:

  • Compliance action by the FIU
  • Disciplinary action by relevant supervisory authorities
  • Potentially even criminal prosecution for breach of AML or Prevention of Terrorism Acts or complicity in money laundering

Risk-Sensitive Approach

The AML Regulations (2012) reflect a risk-sensitive approach to due diligence and monitoring, allowing reporting entities to adopt different approaches to customer due diligence (CDD) and ongoing monitoring based on the risk rating of customers. However, the FIU emphasized that this does not detract from the ultimate responsibility of reporting entities to identify and address actual risks arising in the course of their business.

Internal Controls and Policies

Reporting entities must take appropriate measures to ensure that all officers, employees, and agents engaged in dealing with customers or processing business transactions understand and comply with applicable AML/CFT procedures. This includes:

  • Appointing a Compliance Reporting Officer (CRO) who is responsible for implementing procedures and systems set out in the AML Act
  • Ensuring the CRO is a senior officer with sufficient qualifications and experience to comply with detailed requirements
  • Appointing an alternate CRO to assume responsibilities in their absence

Customer Due Diligence

CDD has four key components:

  • Identifying customers
  • Verifying their identity
  • Obtaining enough information about business relationships
  • Taking reasonable measures to ascertain the purpose of transactions

The concept of “beneficial owner” is critical in CDD, focusing on real benefit and/or ultimate effective control rather than legal ownership. The FIU emphasized that CDD obligations apply across all business relationships and transactions, and continue after a business relationship has been established.

Ongoing Monitoring

Reporting entities must also implement ongoing monitoring measures to identify suspicious transactions and trends associated with money laundering and financing of terrorism. This includes:

  • Training officers and employees to recognize suspicious transactions and comply with internal procedures
  • Reviewing arrangements regularly to verify compliance with internal procedures and ensure that they are meeting the requirements of AML regulations

Conclusion

Failure to comply with these regulations can have severe consequences for financial institutions and businesses in Seychelles. The FIU is urging all reporting entities to take immediate action to ensure full compliance with AML/CFT regulations.