Financial Crime World

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St. Kitts and Nevis Tightens Grip on Money Laundering and Terrorism Financing

The Financial Services Regulatory Commission (FSRC) has implemented a robust system to combat money laundering and terrorism financing in St. Kitts and Nevis, with the aim of protecting the integrity of the country’s financial sector.

Definition of Money Laundering

According to the Proceeds of Crime Act, Cap 4.28, money laundering is defined as engaging in transactions involving proceeds of crime or knowingly receiving, possessing, concealing, disposing of, bringing into or transferring from St. Kitts and Nevis any money or property that is the proceeds of crime.

AML/CFT Legislation

The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) legislation applies to all regulated businesses in the country, including banks, insurance companies, and trust and company service providers. The FSRF is responsible for regulating and supervising these entities’ compliance with AML/CFT requirements.

Compliance Requirements

To ensure that regulated entities comply with AML/CFT legislation, the FSRF conducts comprehensive and regular on-site examinations. During these exams, examiners assess whether policies and procedures are in place to identify risk appropriately and monitor customers and beneficial owners of legal persons and legal arrangements.

Regulated entities are required to:

  • Identify, verify, obtain, maintain, and monitor their customers and beneficial owners
  • Obtain proof of address via a utility bill
  • Conduct customer risk assessments, source of funds, and wealth declarations
  • Maintain account opening files

Examiners also review relevant customer files and citizenship by investment applications to ensure that adequate know your customer (KYC) and customer due diligence documents are obtained and kept up-to-date.

Risk-Based Supervision Framework

The FSRF has implemented a Risk-Based Supervision Framework (RBS), which is applicable to both off-site and on-site examinations of regulated entities. The framework assesses the risk posed by each entity based on factors such as its size, complexity, and business activities.

Financial Intelligence Unit

The Financial Intelligence Unit (FIU) plays a crucial role in receiving, collecting, analyzing, and acting upon reports of suspicious transactions from regulated businesses in St. Kitts and Nevis. The FIU performs investigations, establishes a database for detecting money laundering, and disseminates information on suspicious transactions to competent authorities.

Reporting Suspicious Transactions

All regulated businesses are required to report suspicious transactions to the competent authority (FIU). Failure to report suspicion of money laundering is an offense under the Proceeds of Crime Act Cap 4.28.

Guidelines and Regulations

The FSRF has also implemented guidelines and regulations for anti-money laundering and anti-terrorism, including:

  • Anti-Money Laundering Regulations 2011
  • Anti-Terrorism (Prevention of Terrorist Financing) Regulations 2011
  • Financial Services (Implementation of Industry Standards) Regulations, 2011
  • Anti-Terrorism De-Listing Procedures Regulations, 2011

International Recognition

The FSRF’s efforts to combat money laundering and terrorism financing have been praised by international organizations and financial institutions, which has helped to strengthen the country’s reputation as a responsible financial center.