Financial Crime World

Mutual Evaluation Report: St. Kitts and Nevis Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT)

FATF Compliance

The report highlights several concerns regarding St. Kitts and Nevis’ compliance with international standards on anti-money laundering (AML) and combating the financing of terrorism (CFT). Some key issues include:

  • Lack of understanding among Financial Institutions (FIs) and Designated Non-Financial Business and Professions (DNFBPs): There is a lack of awareness among FIs and DNFBPs about their reporting obligations, which can lead to inadequate reporting and potential breaches of AML/CFT regulations.
  • Security concerns with the FIU’s IT system: The FIU’s IT system is overseen by an external officer, raising security concerns about data confidentiality and independence.

Investigations and Prosecutions

The report highlights several areas where St. Kitts and Nevis needs to improve its investigations and prosecutions of money laundering (ML) cases:

  • Low number of ML investigations: The number of ML investigations conducted by the WCCU is low, with only 6 investigations in both 2019 and 2020, and 2 for the first 3 months of 2021.
  • No ML convictions: There have been no ML convictions in St. Kitts and Nevis during the review period.
  • Limited use of confiscation proceedings and civil asset forfeiture: Prosecutions for self-laundering ML are ongoing, but there have been no opportunities to use confiscation proceedings or civil asset forfeiture during the review period.

Confiscation and Asset Recovery

The report highlights several areas where St. Kitts and Nevis needs to improve its confiscation and asset recovery processes:

  • Low confiscation of proceeds and instrumentalities of crime: Confiscation of proceeds and instrumentalities of crime is exceptionally low in St. Kitts and Nevis.
  • Limited experience with asset recovery from foreign counterparts: There is limited experience with asset recovery from foreign counterparts, and cross-border reports (CBRs) are not actively pursued as a policy objective.

National Policy Objectives

The report highlights several areas where St. Kitts and Nevis needs to improve its national policy objectives:

  • Lack of national policy objective for confiscation: Until March 2021, there was no national policy objective for the confiscation of criminal proceeds, instrumentalities, and property of equivalent value for ML.
  • Limited legislative infrastructure for civil forfeiture: The legislative infrastructure was amended to include civil forfeiture in March 2021, but no dedicated unit exists within the WCCU or DPP for conducting confiscation proceedings or asset forfeiture under POCA.

Recommendations

Based on the report’s findings, it is likely that the Financial Action Task Force (FATF) will recommend improvements in the following areas:

  • Enhance understanding among FIs and DNFBPs about their reporting obligations
  • Improve the FIU’s IT system security and independence
  • Increase the number of ML investigations and prosecutions
  • Strengthen confiscation and asset recovery processes, including the establishment of a dedicated unit for conducting confiscation proceedings and asset forfeiture
  • Develop a national policy objective for the confiscation of criminal proceeds, instrumentalities, and property of equivalent value for ML