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Mutual Evaluation Report of Turks and Caicos Islands: AML/CFT Requirements

Overview

The Mutual Evaluation Report (MER) of Turks and Caicos Islands assesses the country’s compliance with various criteria related to Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) requirements. This report provides an evaluation of the country’s performance in meeting these standards.

Compliance Assessment

Customer Due Diligence for Existing Customers (Criterion 10.16)

  • A deficiency was addressed by amending Regulation 11(c) to require Financial Institutions (FIs) to review Customer Due Diligence (CDD) of existing customers based on materiality and risks.
  • FIs are required to ensure that CDD is reviewed regularly to maintain the accuracy of customer information.

Enhanced Due Diligence Measures (Criterion 10.17)

  • No deficiencies were cited, and FIs are required to apply Enhanced Due Diligence (EDD) measures for specific listed situations and higher-risk circumstances.
  • EDD measures include additional scrutiny of customers, transactions, and business relationships.

Simplified Customer Due Diligence Measures (Criterion 10.18)

  • No deficiencies were noted, and there are no provisions allowing FIs to apply simplified CDD measures.
  • FIs must conduct thorough CDD for all customers, without exceptions.

CDD Procedures (Criterion 10.19)

  • No deficiencies were cited, and the business relationship or transactions shall not be established without satisfactory completion of CDD.
  • FIs must verify customer identity, assess risk, and monitor transactions regularly.

Deficiency in Criterion 10.20

A deficiency was found in Criterion 10.20, which relates to the requirement for Financial Businesses to pursue CDD when there is suspicion of money laundering/terrorist financing (ML/TF). The report notes that under certain circumstances, FIs are allowed to make a suspicious activity report (SAR) rather than pursuing CDD.

Addressing Recommendation 14

Recommendation 14 was previously rated “Partially Compliant” (PC), due to deficiencies in:

  • Lack of proactive measures to identify natural or legal persons carrying on Money Value Transfer Services (MVTS) business without a license.
  • Limitations in the scope of activities regulated under the Money Transmitters Ordinance (MTO).

These deficiencies have been addressed by amending the MTO and introducing new provisions, including:

  • Broadening the definition of money transmission to include payment of corresponding sums in any other form.
  • Empowering the Financial Services Commission (FSC) to identify and investigate persons carrying out MVTS business without a license.

Conclusion

Turks and Caicos Islands has addressed all the deficiencies and is now rated Compliant with Recommendation 14. This achievement demonstrates the country’s commitment to meeting international standards for AML/CFT requirements.