Financial Crime Reporting Requirements Tightened in St. Kitts and Nevis
The government of St. Kitts and Nevis has implemented stricter regulations to combat financial crime and terrorism financing, according to sources close to the Financial Services Regulatory Commission (FSRC).
Risk-Based Supervision Framework
Effective May 2015, the FSRB adopted a risk-based supervision framework (RBS) to ensure compliance with anti-money laundering and counter-terrorist financing (AML/CFT) requirements. The RBS is applicable to both on-site and off-site examinations of regulated entities.
On-Site Examinations
Comprehensive on-site examinations are conducted regularly to ensure that financial institutions in Nevis comply with the Financial Services Regulatory Commission Act, AML/CFT legislation, and other relevant enactments. During these examinations, examiners from the FSRB-Nevis Branch assess whether policies and procedures are in place to identify and mitigate risks.
Customer Identification and Due Diligence
A key requirement under AML/CFT legislation is that regulated entities must:
- Identify, verify, and monitor their customers and beneficial owners of legal persons and legal arrangements
- Provide this information to competent authorities and those conducting due diligence
Review of Customer Files and Documents
Examiners review relevant customer files and citizenship by investment applications to ensure that adequate Know Your Customer (KYC) and Customer Due Diligence (CDD) documents are obtained and maintained. Required documents include:
- Identification documents
- Proof of address
- Records of transactions
Assessment of Policies, Practices, and Procedures
Examiners also assess the regulated entity’s policies, practices, procedures, and internal controls for compliance with AML/CFT legislation. This includes:
- Ongoing monitoring programs
- Training schedules
- Suspicious transaction reporting
- Record-keeping systems
- Retention periods
- Condition of records
Monitoring and Enforcement
The results of on-site examinations influence the intensity and frequency of monitoring. Entities that operate satisfactorily may require less frequent monitoring than those with weaknesses and deficiencies.
FSRB Commitment to Transparency and Compliance
The FSRB is committed to ensuring that financial institutions in Nevis are operating in a sound and transparent manner, and these regulations are designed to prevent and detect financial crime and terrorism financing.