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ST. KITTS AND NEVIS: A MODEL FOR FINANCIAL CRIME INVESTIGATION
In a bid to combat financial crimes, St. Kitts and Nevis has put in place robust legislation and regulations that have made the country an exemplary model for others to follow.
The Proceeds of Crime Act
The Proceeds of Crime Act, Cap 4.28 is one such legislation that covers all serious offenses, including money laundering. This act defines money laundering as conduct where a person engages directly or indirectly, in a transaction that involves money or other property that is the proceeds of crime or the person knowingly receives, possesses conceals, disposes of or brings into or transfers from St. Kitts and Nevis any money or property that is the proceeds of crime.
The Anti-Terrorism Act
In addition to the Proceeds of Crime Act, the Anti-Terrorism Act Cap 4.02 also gives effect to the suppression and elimination of international terrorism, and criminalizes the offense of terrorism.
STRONG LEGISLATION AND REGULATIONS
The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation in St. Kitts and Nevis applies to all regulated businesses in the country. The Financial Services Regulatory Commission (FSRC) has responsibility for regulating and supervising regulated businesses’ compliance with the AML/CFT requirements.
Risk-Based Supervision Framework
The FSRC has adopted a Risk-Based Supervision Framework (RBS), which is applicable to both off-site and on-site examination of regulated entities. This framework ensures that all regulated businesses are operating in a sound financial position and managing their business in a prudent manner.
REGULATED ENTITIES UNDER SCRUTINY
Comprehensive and regular on-site examinations of regulated entities in St. Kitts are conducted to ensure compliance with the AML/CFT legislation and enactments specified in Schedule 1 to the Financial Services Regulatory Commission Act, Cap 21.10 (FSRC Act).
Examiners’ Role
During these examinations, Examiners from the FSRC determine whether there are appropriate policies and procedures established to ensure compliance with AML/CFT legislation and identify risk appropriately.
IDENTIFYING AND VERIFING CUSTOMERS
The AML/CFT legislation requires all regulated entities to identify, verify, obtain, maintain, and monitor their customers and beneficial owners (BOs) of legal persons (companies) and legal arrangements (trusts). To increase transparency, entities and trustees are required to make this information available to the competent authorities and those conducting AML/CFT due diligence.
Examiners’ Review
Examiners will review relevant customer files of the regulated entity as well as citizenship by investment applications to ensure that adequate Know Your Customer (KYC) and Customer Due Diligence (CDD) documents for BOs of legal persons and legal arrangements are obtained and kept up-to-date.
ENFORCING GUIDELINES AND REGULATIONS
Enforceable guidelines and regulations on Anti-Money Laundering and Anti-Terrorism include the:
- Anti-Money Laundering Regulations 2011
- Anti-Terrorism (Prevention of Terrorist Financing) Regulations 2011
- Financial Services (Implementation of Industry Standards) Regulations, 2011
- Anti-Terrorism De-Listing Procedures Regulations, 2011
FINANCIAL INTELLIGENCE UNIT ROLE
The Financial Intelligence Unit (FIU) is responsible for receiving, collecting, analyzing, and acting upon reports of suspicious transactions from regulated businesses in St. Kitts and Nevis in accordance with the Financial Intelligence Unit Act, Cap 21.09.
FIU’s Role
The FIU performs investigations and establishes a database for detecting money laundering. They also disseminate information on suspicious transactions to competent authorities and liaise with other anti-money laundering intelligence agencies.
In conclusion, St. Kitts and Nevis has put in place robust legislation and regulations that have made the country an exemplary model for financial crime investigation. The FSRC’s Risk-Based Supervision Framework and the FIU’s role in receiving and analyzing suspicious transactions have ensured that all regulated businesses are operating in a sound financial position and managing their business in a prudent manner.