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St. Kitts and Nevis Tightens Banking Regulations to Prevent Financial Crime
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The government of St. Kitts and Nevis has implemented stringent banking regulations to prevent financial crime, including money laundering and the financing of terrorism.
Background
The Anti-Money Laundering and Countering the Financing of Terrorism legislation (AML/CFT) is applicable to all Regulated Businesses in the country. The Financial Services Regulatory Commission (FSRC), which regulates and supervises regulated businesses’ compliance with AML/CFT requirements, has adopted a Risk-based Supervision Framework (RBS) to ensure that entities are operating in accordance with the legislation.
Comprehensive Examinations
Comprehensive and regular on-site examinations of regulated entities are conducted by Examiners from the FSRC-Nevis Branch to ensure compliance with AML/CFT legislation, enactments specified in Schedule 1 to the Act, and that the entity is in a sound financial position. The Examiners determine whether there are appropriate policies and procedures established to ensure compliance with AML/CFT legislation and identify risk appropriately.
Know Your Customer (KYC) and Customer Due Diligence (CDD)
The AML/CFT legislation requires all regulated entities to:
- Identify, verify, obtain, maintain, and monitor their customers and beneficial owners (BOs) of legal persons (companies) and legal arrangements (trusts)
- Make this information available to the competent authorities and those conducting AML/CFT due diligence
- Review relevant customer files and 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
Monitoring and Enforcement
Examiners conduct assessments of the regulated entity’s policies, practices, procedures, and internal controls for compliance with AML/CFT legislation. The results of an on-site examination influence the intensity and frequency of monitoring.
Entities that are operating in a satisfactory manner will require monitoring on a less frequent basis than entities with weaknesses and deficiencies. The FSRC has made it clear that it will continue to monitor regulated entities’ compliance with AML/CFT legislation and take enforcement action against those who fail to comply.
Conclusion
St. Kitts and Nevis has taken significant steps to prevent financial crime by implementing stringent banking regulations. Regulated entities are required to maintain high standards of compliance, and the FSRC will continue to monitor and enforce these requirements.