St. Kitts and Nevis Tightens Rules on Reporting Financial Crimes

Introduction

In a bid to combat financial crimes and terrorism financing in the country, the government of St. Kitts and Nevis has introduced new regulations and procedures for reporting suspicious transactions. The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation applies to all regulated businesses in St. Kitts, including banks, insurance companies, and other financial institutions.

The Proceeds of Crime Act

The Proceeds of Crime Act, Cap 4.28, 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. This act covers all serious offenses, including those related to financial crimes and terrorism financing.

Risk-Based Supervision Framework (RBS)

The Financial Services Regulatory Commission (FSRC) has adopted a Risk-based Supervision Framework (RBS) to ensure that entities are operating in a sound financial position and managing their business in a prudent manner. Comprehensive and regular on-site examinations of regulated entities are conducted by Examiners from the FSRC, who determine whether there are appropriate policies and procedures established to ensure compliance with AML/CFT legislation.

Customer Due Diligence (CDD)

Regulated entities are required 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.

Know Your Customer (KYC)

Examiners review relevant customer files of regulated entities as well as citizenship by investment applications to ensure that adequate KYC and CDD documents for BOs of legal persons and legal arrangements are obtained and kept up-to-date. These documents include:

• A copy of the customer’s/BO’s passport or identity card with photo ID
• Two original letters of references from recognized professionals
• Proof of address via utility bills
• Other relevant information

Enforceable Guidelines and Regulations

Enforceable guidelines and regulations on Anti-Money Laundering and Anti-Terrorism are outlined in the following:

• The Anti-Money Laundering Regulations 2011
• The Anti-Terrorism (Prevention of Terrorist Financing) Regulations 2011
• The Financial Services (Implementation of Industry Standards) Regulations, 2011
• The Anti-Terrorism De-Listing Procedures Regulations, 2011

The Financial Intelligence Unit (FIU)

The Financial Intelligence Unit (FIU), established under the Financial Intelligence Unit Act, Cap. 21.09, is responsible for receiving, collecting, analyzing, and acting upon reports of suspicious transactions from regulated businesses in St. Kitts and Nevis. The FIU performs investigations and establishes a database for detecting money laundering.

Reporting Suspicious Transactions

All regulated businesses are required to report suspicious transactions to the competent authority (i.e., FIU). Failure to report suspicion of money laundering is an offense under the Proceeds of Crime Act Cap 4.28.