Financial Crime World

South Georgia and South Sandwich Islands Regulatory Update: New Requirements for Financial Institutions to Combat Financial Crime

The government of the South Georgia and South Sandwich Islands has released a new set of regulatory updates aimed at strengthening the country’s anti-financial crime laws. The updates, which come into effect on January 1st, 2023, require financial institutions to implement robust measures to prevent and detect financial crimes such as money laundering, terrorist financing, and corruption.

Key Areas of Focus

The new regulations place a strong emphasis on the following areas:

  • AML/CFT Priorities: Financial institutions are required to incorporate the government-wide AML/CFT priorities into their risk-based compliance programs. This includes identifying and mitigating risks associated with products, services, customers, and geographic operations.
  • Beneficial Ownership Information Reporting: Financial institutions must maintain accurate and up-to-date beneficial ownership information on customers, including non-individuals such as companies and trusts.
  • Suspicious Activity Reporting for Environmental Crimes: Financial institutions are required to report suspicious transactions related to environmental crimes, including the financing of illegal activities such as deforestation and wildlife trafficking.
  • ESG-Factors: Financial institutions must consider ESG-factors such as human rights and workplace safety when assessing risks associated with third-party vendors.

New Requirements for Financial Institutions

To comply with the new regulations, financial institutions in South Georgia and South Sandwich Islands will need to:

  • Conduct thorough customer due diligence, including verifying the identity of customers and beneficial owners.
  • Implement robust transaction monitoring systems to detect suspicious transactions.
  • Develop effective risk management policies and procedures to mitigate risks associated with products, services, customers, and geographic operations.
  • Provide ongoing training and awareness programs for employees on AML/CFT compliance.

Enforcement and Penalties

The government has announced plans to increase enforcement activities and impose significant penalties on financial institutions that fail to comply with the new regulations. This includes fines of up to $10 million and reputational damage.

Implementation Timeline

Financial institutions have until January 1st, 2023, to implement the new requirements. A transitional period will be granted for institutions that are unable to fully comply by this date.

By implementing these new regulations, the government aims to strengthen its anti-financial crime laws and protect the integrity of the financial system in South Georgia and South Sandwich Islands.

KPMG Regulatory Insights

For more information on the new regulations and how they may impact your organization, please contact our team at KPMG Regulatory Insights. We offer a range of services to help you navigate the complex regulatory landscape and ensure compliance with AML/CFT requirements.