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Anti-Money Laundering Framework in Turks and Caicos Islands

The Turks and Caicos Islands have a legal framework in place to combat money laundering, but there are areas that require improvement. In this article, we will explore the key points related to the anti-money laundering (AML) and combating the financing of terrorism (CFT) regime in the jurisdiction.

The Proceeds of Crime Money Laundering Regulations (PCMLR), adopted in 1999, provide a sound legal basis for the AML/CFT regime. These regulations require regulated sectors to establish and maintain procedures for:

  • Customer identification
  • Record-keeping
  • Internal reporting
  • Employee training

Regulated Sectors

The PCMLR apply to various sectors, including financial institutions, money services businesses, and other organizations that provide financial services. These sectors must adhere to the AML/CFT regulations to prevent money laundering and terrorist financing.

Reporting Suspicious Transactions (STRs)

While there is no positive duty to report STRs, the AML obligations are underpinned by an offense of failing to have these procedures and training set up and maintained. Regulated sectors must be vigilant in identifying and reporting suspicious transactions to prevent money laundering and terrorist financing.

Regulatory Bodies

Several regulatory bodies play a crucial role in enforcing the AML/CFT regime:

Financial Services Commission (FSC)

The FSC acts as a single regulator responsible for licensing and supervision of all institutions licensed under TCI financial legislation. The FSC ensures that regulated sectors comply with the PCMLR and other relevant regulations.

Licensing Committee

The Licensing Committee is comprised of ex officio members of the board of the FSC and one or more board-nominated appointed members, which exercises executive responsibility for licensing and supervision.

Money Laundering Reporting Authority (MLRA)

Although designated under the PCMLR as the body that receives STRs, the MLRA is not an operational body and does not meet the requirements of the Egmont Group to qualify as a Financial Intelligence Unit (FIU).

Financial Crimes Unit (FCU)

The FCU deals with STRs and investigates money-laundering offenses.

Statutory Provisions

Several overlapping statutory provisions criminalize money laundering, but there is no civil forfeiture regime. This limitation can hinder the effectiveness of the AML/CFT regime.

Conclusion

While the Turks and Caicos Islands have a legal framework in place for anti-money laundering, there are areas that require improvement, such as the establishment of a centralized financial intelligence agency and a civil forfeiture regime. Enhancing these measures will help to strengthen the jurisdiction’s ability to combat money laundering and terrorist financing.