Financial Crime World

Technical Deficiencies in Turks and Caicos Islands’ Anti-Money Laundering Framework

Introduction

The Turks and Caicos Islands (TCI) has made significant strides in addressing technical deficiencies in its anti-money laundering (AML) framework. In this article, we will explore the key points regarding Recommendation 14 from the Fourth Round Mutual Evaluation Report of TCI.

Technical Deficiencies

Prior to revisions, TCI’s AML/CFT framework faced several challenges:

  • Lack of proactive measures: There were no effective measures in place to identify natural or legal persons carrying out money or value transfer services (MVTS) business without a license.
  • Limited scope of activities regulated under the Money Transmitters Ordinance (MTO): The MTO did not cover all aspects captured in the Financial Action Task Force (FATF) Standards.

Revised AML/CFT Framework

TCI has taken steps to address these deficiencies by:

  • Expanding the definition of money transmission: The Money Transmitters (Amendment) Ordinance 2021 now includes payment of a corresponding sum in any other form within its scope.
  • Strengthening enforcement: It is an offense to carry out money services business (MSB) without a license, with penalties including fines and imprisonment.

Monitoring and Enforcement

To ensure effective implementation of the revised framework:

  • Financial Services Commission (FSC) powers: The FSC has the authority to identify and investigate persons carrying out MSB without a license.
  • Appointment of examiners: Section 35 of the Financial Services Commission Ordinance empowers the FSC to appoint an examiner to conduct an examination on its behalf in cases where there are reasonable grounds for suspicion.

Conclusion

TCI’s efforts to revise the AML/CFT framework and implement new regulations have addressed the technical deficiencies identified. However, it is worth noting that there have been no instances where the FSC has utilized its powers to investigate MSB carried out without a license. As a result, TCI has been re-rated as Compliant with Recommendation 14 (originally rated Partially Compliant).