Financial Crime World

Mutual Evaluation Report: Strengthening Anti-Money Laundering and Combating Terrorist Financing Framework in St. Kitts and Nevis

Executive Summary

The Caribbean Financial Action Task Force (CFATF) conducted a Mutual Evaluation Report of St. Kitts and Nevis to assess the country’s compliance with international anti-money laundering (AML) and combating terrorist financing (CTF) standards.

Key Observations and Recommendations

Low Suspicious Transaction Reporting (STR)

  • Issue: STR reporting from financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs) is low, indicating a lack of understanding of their reporting obligations.
  • Recommendation: Improve awareness and training for FIs and DNFBPs on STR reporting requirements.

Limited Use of Financial Intelligence

  • Issue: The FIU distributes typologies and advisories to FIs and DNFBPs, but the CED and Competent Authority for Tax Matters (CATM) only use financial intelligence to a limited extent. The Royal St. Christopher & Nevis Police Force (RSCNPF) units outside the WCCU do not regularly request financial intelligence.
  • Recommendation: Enhance the use of financial intelligence by CED, CATM, and RSCNPF units.

Security Concerns

  • Issue: The report raises security concerns about FIU data confidentiality and independence due to an external IT system overseen by an officer employed by the Ministry of Finance.
  • Recommendation: Ensure the independence and confidentiality of FIU data.

Well-Established Technical Framework

  • Strength: St. Kitts and Nevis has a well-established technical framework for investigating money laundering (ML) and conducting prosecutions, with trained investigators at the WCCU.

Low Number of ML Investigations

  • Issue: Despite the NRA findings, the WCCU reports only six (6) ML investigations each for 2019 and 2020 and two (2) for the first three months of 2021, highlighting the low level of ML investigations.
  • Recommendation: Increase efforts to investigate and prosecute ML cases.

No ML Convictions

  • Issue: There were no ML convictions in St. Kitts and Nevis during the review period, making it impossible to assess the effectiveness, proportionality, and dissuasiveness of sanctions.
  • Recommendation: Enhance efforts to secure ML convictions.

Limited Confiscation of Proceeds

  • Issue: Confiscation of proceeds and instrumentalities of crime are exceptionally low in St. Kitts and Nevis, with no dedicated unit for conducting confiscation proceedings or asset forfeiture under POCA.
  • Recommendation: Establish a dedicated unit for confiscation proceedings and asset forfeiture.

Limited Experience in Asset Recovery

  • Issue: The country has limited experience in asset recovery with foreign counterparts, either for proceeds of foreign predicates located in the jurisdiction or proceeds from domestic predicates laundered outside St. Kitts and Nevis.
  • Recommendation: Enhance efforts to recover assets with foreign counterparts.

Conclusion

The report identifies several areas where St. Kitts and Nevis needs to improve its AML/CTF framework, including increasing STR reporting, using financial intelligence more effectively, addressing security concerns, and enhancing confiscation of proceeds and asset recovery with foreign counterparts.