Financial Crime World

St. Kitts and Nevis’ Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Efforts: A Report by the Caribbean Financial Action Task Force (CFATF)

Introduction

The report by the Caribbean Financial Action Task Force (CFATF) highlights several areas where St. Kitts and Nevis needs to improve its anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts.

Key Findings

Low Suspicious Transaction Reporting Rates

  • Some financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs) have low suspicious transaction reports (STRs) reporting rates, which is not commensurate with the country’s vulnerability assessment.
  • This indicates a lack of understanding of reporting obligations among FIs and DNFBPs.

Financial Intelligence Unit (FIU)

  • The FIU distributes typologies and advisories to FIs and DNFBPs, but its information technology system is overseen by an external officer, raising security concerns about data confidentiality and independence.
  • This highlights the need for improved IT systems and internal controls at the FIU.

WCCU Investigations

  • ML investigations are conducted by the WCCU, a unit of the Royal St. Christopher & Nevis Police Force (RSCNPF).
  • Investigators at the WCCU are well-trained and experienced, but the number of ML investigations is low.
  • This suggests that there may be a need for increased resources or prioritization of ML cases.

Predicate Offences

  • Cases above a threshold of XCD 20,000 (USD 7,361) would include a parallel investigation for ML, while those under the threshold only have predicate offence investigations.
  • This creates an uneven playing field and may lead to inconsistent outcomes.

Prosecutions and Convictions

  • There were eight prosecutions before the court for self-laundering ML at the time of the onsite visit, but no ML convictions in St. Kitts and Nevis during the review period.
  • This indicates a need for improved prosecution strategies and outcomes.

Confiscation of Proceeds and Asset Recovery

  • Confiscation of proceeds and instrumentalities of crime are exceptionally low in St. Kitts and Nevis.
  • The country has limited experience in asset recovery with foreign counterparts.
  • This highlights the need for improved confiscation laws and procedures, as well as international cooperation.

National Policy Objective

  • Until March 2021, St. Kitts and Nevis did not have a national policy objective for the confiscation of criminal proceeds, instrumentalities, and property of equivalent value for ML.
  • This indicates a lack of clear direction and priorities in the fight against money laundering.

Conclusion

The report highlights several areas where St. Kitts and Nevis needs to improve its AML/CFT efforts, including increasing STR reporting rates, improving understanding of reporting obligations, enhancing the FIU’s information technology system, and increasing prosecutions and convictions for ML. Addressing these issues will be crucial in preventing money laundering and financing of terrorism in the country.