St. Kitts and Nevis Introduces Guidelines for Businesses to Combat Money Laundering and Terrorism
New Regulations Aim to Enhance Anti-Money Laundering and Countering the Financing of Terrorism Efforts
The Financial Services Regulatory Commission (FSRC) has introduced new guidelines for businesses operating in St. Kitts and Nevis to combat money laundering and terrorism. The guidelines are designed to ensure that regulated entities comply with anti-money laundering and countering the financing of terrorism (AML/CFT) requirements.
Background on AML/CFT Legislation
According to the Proceeds of Crime Act, Cap 4.28, all serious offenses are covered, including money laundering and terrorism. The Anti-Money Laundering and Countering the Financing of Terrorism legislation applies to all regulated businesses in the country.
Risk-Based Supervision Framework
The FSRB has implemented a Risk-Based Supervision Framework to ensure that regulated entities comply with AML/CFT requirements. Comprehensive on-site examinations are conducted regularly to assess compliance with relevant laws and regulations.
Requirements for Regulated Businesses
Under the new guidelines, regulated businesses are required to:
- Identify, verify, obtain, maintain, and monitor their customers and beneficial owners.
- Make this information available to competent authorities and those conducting due diligence.
- Review customer files and citizenship by investment applications to ensure that adequate Know Your Customer (KYC) and Customer Due Diligence (CDD) documents are obtained and kept up-to-date.
Record Keeping and Compliance
Regulated businesses must maintain accurate records, including:
- Proof of address
- Source of funds
- Account opening files
Examiners from the FSRB will assess the effectiveness of policies, practices, procedures, and internal controls for compliance with AML/CFT legislation. Entities that operate in a satisfactory manner will be monitored less frequently than those with weaknesses and deficiencies.
Enforceable Guidelines and Regulations
Enforceable guidelines and regulations include:
- Anti-Money Laundering Regulations 2011
- Anti-Terrorism (Prevention of Terrorist Financing) Regulations 2011
- Other relevant enactments
Role of the Financial Intelligence Unit (FIU)
The FIU is responsible for receiving, collecting, analyzing, and acting upon reports of suspicious transactions from regulated businesses in St. Kitts and Nevis. Failure to report suspicion of money laundering is an offense under the Proceeds of Crime Act Cap 4.28.
Reporting Suspicious Transactions
All regulated businesses are required to report suspicious transactions to the FIU, which will investigate and establish a database for detecting money laundering. The FIU will also disseminate information on suspicious transactions to competent authorities and liaise with other anti-money laundering intelligence agencies.
By implementing these new guidelines, St. Kitts and Nevis aims to enhance its efforts to combat money laundering and terrorism, ensuring the integrity of its financial system and protecting its citizens from financial crimes.