ST KITTS AND NEVIS UNDER SCRUTINY OVER MONEY LAUNDERING VULNERABILITIES

A recent Mutual Evaluation Report has raised concerns over the vulnerabilities in St Kitts and Nevis’ anti-money laundering (AML) regime, highlighting deficiencies in reporting, investigations, and prosecutions.

Deficiencies in AML Regime

The report, conducted by the Caribbean Financial Action Task Force (CFATF), notes that while the jurisdiction has made progress in developing a National Action Plan (NAP) to mitigate risks identified in its AML/CFT regime, there are still significant weaknesses to be addressed. One of the key concerns is the low level of suspicious transaction reports (STRs) submitted by financial institutions and designated non-financial businesses and professions (DNFBPs).

Low Level of Suspicious Transaction Reports

• Many FIs and DNFBPs lack understanding of their reporting obligations, resulting in a low number of STRs being submitted to the Financial Intelligence Unit (FIU).
• The FIU’s operational analysis has highlighted weaknesses in the use of financial intelligence by law enforcement agencies.

Weaknesses in Investigations and Prosecutions

• There have been no money laundering convictions in St Kitts and Nevis.
• Confiscation proceedings are exceptionally low.
• The jurisdiction’s limited experience in asset recovery with foreign counterparts has also raised concerns.

Recommendations for Improvement

The CFATF assessors have recommended that St Kitts and Nevis strengthen its AML regime by:

Key Findings

• Low level of suspicious transaction reports (STRs) submitted by financial institutions and designated non-financial businesses and professions (DNFBPs)
• Weaknesses in the use of financial intelligence by law enforcement agencies
• No money laundering convictions in St Kitts and Nevis
• Confiscation proceedings are exceptionally low
• Limited experience in asset recovery with foreign counterparts

Next Steps

The CFATF assessors will work closely with St Kitts and Nevis to implement the recommended improvements to its AML regime. The jurisdiction must take immediate action to address its vulnerabilities and improve its anti-money laundering framework to avoid reputational damage and potential sanctions from international partners.

By implementing these recommendations, St Kitts and Nevis can strengthen its AML regime, improve financial transparency, and reduce the risk of money laundering and terrorist financing in the jurisdiction.