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An In-depth Look at the FATF Forty Recommendations — Recommendation 28: Regulation and Supervision of DNFBPs

DESIGNATED non-financial businesses and professions (DNFBPs) are referred to as ‘other business activities’ in the Money Laundering (Prevention) Act, Cap. 12.20. Examples include, Casinos, Real Estate Agents, Jewellers, Lawyers and Accountants. Under the Financial Action Task Force (FATF) Forty Recommendations, the regulation and supervision of designated non-financial businesses and professions are covered under recommendation 28.

Countries are called upon by the FATF to ensure adequate systems are in place to monitor DNFBPs to ensure that they are complying with the anti-money laundering and counter terrorist financing regimes. A regulator should have oversight for this monitoring and regulation, which should be conducted using a risk based approach (RBA). In utilizing a risk based approach, DNFBPs which are assessed to be at a greater risk of money laundering and terrorist financing will be subjected to increased supervision.

It is incumbent upon countries to ensure that the regulator is adequately resourced with highly skilled and professional staff and having the proper technical and financial support. The regulator should also have the power, if necessary, to apply proportionate and dissuasive sanction to delinquent DNFBPs.

It is also necessary that appropriate steps be taken to prevent criminals or their associates from being the beneficial owner, that is having controlling interest in a DNFBP. This is accomplished by conducting fit and proper tests.

The Financial Intelligence Authority (FIA) is the money laundering/ terrorist financing regulator for DNFBPs within Saint Lucia. In carrying out its functions under the Money Laundering (Prevention) Act, the FIA has the power to inspect. DNFBPs are required, under section 16(1)(f) of the Money Laundering (Prevention) Act, to “permit a member of the Authority to enter into any premises of the financial institution or a person engaged in other business activity during normal working hours; and— (i) inspect the transaction records kept under paragraph (a), (ii) make notes or take a copy of the whole or part of the transaction record, (iii) answer any questions from the Authority in relation to the transaction record.”

During Saint Lucia’s 4th Round Mutual Evaluation which includes an onsite visit by the Caribbean Financial Action Task Force (CFATF) from September 16-27, 2019, a determination will be made as to how well DNFBPs are being regulated and supervised within Saint Lucia. To answer this question interviews will be conducted not only with the regulator but with DNFBPs. A rating is then applied to this recommendation. More information on this and the other recommendations can be garnered from the website of the Caribbean Financial Action Task Force at https://www.cfatf-gafic.org.

Editor’s note: The preceding is Part 31 of a series by The Attorney General’s Chambers and the National Anti-Money Laundering Oversight Committee (NAMLOC) which aims to shed light on the 40 recommendations of the Financial Action Task Force.

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