Financial Crime World

Title: St. Kitts and Nevis’ Strict Enforcement of Money Laundering Laws: A Closer Look at KYC and CDD Policies

Overview

In St. Kitts and Nevis, the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) laws are meticulously enforced against Regulated Businesses. The Financial Services Regulatory Commission (FSRC) plays a crucial role in regulating and supervising these businesses’ adherence to AML/CFT requirements.

Regulation and Supervision

Since May 2015, the St. Kitts and Nevis Branches of the FSRC have employed a Risk-based Supervision Framework (RBS) for ensuring compliance. This framework includes on-site and off-site examinations.

Regular On-site Examinations

During these assessments, FSRC-Nevis Examiners focus on areas like KYC and CDD policies. Regulated Entities in St. Kitts and Nevis are required to:

  1. Identify, verify, obtain, maintain, and monitor customers and beneficial owners (BOs) of legal persons and arrangements
  2. Disclose this information to competent authorities

Know Your Customer (KYC) and Customer Due Diligence (CDD) Policies

The AML/CFT legislation mandates Regulated Entities to comply with the following KYC and CDD policies for their customers and BOs:

  1. Identification: Submit copies of passports or identity cards (duly notarized)
  2. Verification: Present original letters of reference from a recognized banking institution and a professional body (lawyer or accountant)
  3. Address: Provide proof of address via utility bills

Regulated Entities also need to maintain additional documents:

  • Customer risk assessments
  • Source of funds and wealth declarations
  • Detailed account opening files
  • Corporate documents, registers, trust deeds, letters of wishes, and share certificates

Examiners will extensively review customer files, AML/CFT due diligence reports, and citizenship by investment applications to verify proper KYC and CDD documentation.

Assessing Compliance and Implications

Examiners evaluate entities’ policies, practices, and procedures for AML/CFT compliance. This includes ongoing monitoring programs, training schedules, suspicious transaction reporting, record keeping systems, retention periods, and record conditions.

Conclusion

The results of an on-site examination significantly impact the intensity and frequency of future monitoring. Satisfactory entities require less frequent monitoring than those revealing weaknesses and deficiencies. By maintaining stringent KYC and CDD guidelines, St. Kitts and Nevis fortifies its reputation as a reputable global financial hub.