Financial Crime World

ST KITTS AND NEVIS FINANCIAL CRIME ALERT ISSUED BY US TREASURY DEPARTMENT

Financial Institutions on High Alert: Scrutiny of Transactions Involving St Kitts and Nevis

The United States Department of the Treasury has issued a warning to banks and financial institutions operating in the US, advising them to exercise increased scrutiny when dealing with transactions involving St Kitts and Nevis. This move aims to heighten awareness among financial institutions and prevent potential money laundering activities.

The Concerns Surrounding St Kitts and Nevis

  • The Federation of St Kitts and Nevis has a significant number of offshore companies, with over 9,000 registered in Nevis alone.
  • Experts have raised concerns about the lack of effective supervision and regulation of these entities, citing deficiencies in the country’s counter-money laundering regime.
  • St Kitts and Nevis’ laws fail to adequately address money laundering, allowing individuals with criminal records to hold management positions in offshore banks.

Key Issues Identified by the US Treasury Department

  • Lack of customer verification: Offshore companies are not required to verify customer identities or maintain records relating to their customers.
  • Inadequate reporting: Financial institutions operating in St Kitts and Nevis are not obligated to report suspicious transactions.
  • Bank secrecy laws: The country’s bank secrecy laws prohibit governmental authorities from accessing information collected by financial institutions about their customers’ identities and transactions.

The Advisory: What It Means for US Financial Institutions

  • The advisory is aimed at heightening awareness among financial institutions operating in the US to exercise enhanced scrutiny when dealing with transactions involving St Kitts and Nevis.
  • Financial institutions are urged to carefully examine any transaction involving entities organized or domiciled, or persons maintaining accounts, in St Kitts and Nevis, and report suspicious transactions as required by law.

Response from the US Treasury Department

  • The advisory does not mean that US financial institutions should curtail legitimate business with St Kitts and Nevis.
  • Any report relating to a transaction described in this advisory will be considered a report of a suspicious transaction relevant to a possible violation of law or regulation, for purposes of the prohibitions against disclosure and protection from liability for reporting of suspicious transactions.

Cooperation with St Kitts and Nevis

  • The US government is committed to working with St Kitts and Nevis officials to address the deficiencies in their counter-money laundering systems.
  • Officials stand ready to provide technical assistance as needed to help the country improve its regulatory framework and prevent financial crimes.