Stricter Rules Introduced to Combat Money Laundering in St. Christopher and Nevis

The Financial Services Commission (FSC) of St. Christopher and Nevis has announced the introduction of new regulations aimed at enhancing the country’s anti-money laundering (AML) framework. These regulations come into effect immediately, requiring financial institutions to implement stricter measures to prevent money laundering and terrorist financing.

Enhanced Customer Due Diligence

The new rules require financial institutions to conduct enhanced customer due diligence procedures for:

• High-risk customers: Financial institutions must gather sufficient information about high-risk customers and transactions, including their business nature, systems, and controls.
• Correspondent banks: Correspondent banks must ensure that their respondent banks do not provide services to shell banks or engage in suspicious activities.

Ongoing Monitoring of Business Relationships

The regulations also introduce enhanced ongoing monitoring of business relationships with:

• High-risk customers: Financial institutions must conduct regular monitoring of high-risk customers, including those who are politically exposed persons (PEPs).
• PEPs: PEPs are individuals who hold prominent public functions or have close associates who may pose a higher risk of money laundering or terrorist financing.

Reduced Customer Due Diligence Procedures

The regulations also provide for reduced customer due diligence procedures in low-risk situations, such as:

• Dealing with public authorities
• Pension schemes: Financial institutions must still conduct some level of verification and monitoring even in these cases.

Commitment to Combating Money Laundering

“We are committed to ensuring that our financial system is robust and secure,” said a spokesperson for the FSC. “These new regulations demonstrate our commitment to combating money laundering and terrorist financing, while also minimizing the burden on legitimate customers.”

Compliance and Penalties

The new regulations come into effect immediately and apply to all financial institutions operating in St. Christopher and Nevis. Failure to comply with the regulations may result in severe penalties, including:

• Fines
• Revocation of licenses

Financial institutions are advised to review their existing policies and procedures to ensure compliance with the new regulations. The FSC has also established a hotline for reporting suspicious transactions or activities related to money laundering or terrorist financing.

Conclusion

The introduction of these stricter rules aims to strengthen St. Christopher and Nevis’ AML framework, ensuring that its financial system is robust and secure. Financial institutions are urged to comply with the new regulations to minimize the risk of money laundering and terrorist financing.