Financial Crime World

Threats to Financial System Linger in St. Kitts and Nevis, Says CFATF

The Caribbean Financial Action Task Force (CFATF) has released its Mutual Evaluation Report on St. Kitts and Nevis, highlighting significant threats to the country’s financial system.

Failures in Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Regime

According to the report, St. Kitts and Nevis has failed to fully address vulnerabilities in its AML/CFT regime. The jurisdiction has not implemented adequate measures to prevent the use of shell companies, bearer shares, and other instruments that can be used for money laundering and terrorist financing.

High Risk of Money Laundering and Terrorist Financing

The report notes that St. Kitts and Nevis has a high risk of money laundering and terrorist financing due to its small size, lack of transparency, and limited regulatory oversight. The country’s financial intelligence unit (FIU) has not been able to effectively identify and track suspicious transactions, and the FIU has not been able to access all relevant information.

Lack of Cooperation and Effective Measures

The report also highlights a lack of cooperation between law enforcement agencies and the FIU, which hinders efforts to combat money laundering and terrorist financing. Additionally, St. Kitts and Nevis has not implemented adequate measures to prevent the use of cash and other instruments that can be used for money laundering and terrorist financing.

Inadequate Asset Forfeiture

Furthermore, the report notes that St. Kitts and Nevis has not been able to effectively confiscate criminal proceeds, instrumentalities, and property of equivalent value for money laundering and terrorist financing. The country’s laws and regulations do not provide adequate powers to freeze and seize assets related to these crimes.

Recommendations

The CFATF recommends that St. Kitts and Nevis implement a comprehensive plan to address the vulnerabilities identified in the report. This includes:

  • Strengthening its AML/CFT regime
  • Improving cooperation between law enforcement agencies and the FIU
  • Increasing transparency and regulatory oversight
  • Improving the effectiveness of the FIU in identifying and tracking suspicious transactions
  • Implementing adequate measures to prevent the use of cash and other instruments that can be used for money laundering and terrorist financing
  • Reforming laws and regulations to provide adequate powers to freeze and seize assets related to money laundering and terrorist financing

Key Findings

  • St. Kitts and Nevis has failed to fully address vulnerabilities in its AML/CFT regime.
  • The jurisdiction has a high risk of money laundering and terrorist financing due to its small size, lack of transparency, and limited regulatory oversight.
  • The FIU has not been able to effectively identify and track suspicious transactions.
  • Law enforcement agencies and the FIU have not cooperated effectively in combating money laundering and terrorist financing.
  • St. Kitts and Nevis has not implemented adequate measures to prevent the use of cash and other instruments that can be used for money laundering and terrorist financing.
  • The country’s laws and regulations do not provide adequate powers to freeze and seize assets related to money laundering and terrorist financing.