GUIDANCE and feedback are critical components of an effective regulatory framework. Recommendation 34 of the Financial Action Task Force (FATF) Recommendations explores this matter.
This recommendation requires competent authorities, supervisors and self –regulatory bodies to establish guidelines and provide feedback to financial institutions and designated non-financial business and professions, such as Accountants, Casinos, Real Estate Agents and Attorneys (referred to as other business activities in the Money Laundering (Prevention) Act). A self-regulatory body as defined by the Financial Action Task Force “is a body that represents a profession (e.g. lawyers, notaries, other independent legal professionals or accountants), and which is made up of members from the profession, has a role in regulating the persons that are qualified to enter and who practice in the profession, and also performs certain supervisory or monitoring type functions”.
The feedback provided should assist financial institutions and DNFBPs in applying national measures geared towards combatting money laundering and terrorist financing. It should also enable these entities to better detect and report suspicious transactions.
Under section 6(1) (h) of the Money Laundering Prevention Act, Cap.12.20 the FIA which is the anti-money laundering regulator can “inspect and conduct audits of a financial institution or a person engaged in other business activity to ensure compliance with this Act”. These audits have the primary purpose of identifying strengths and weaknesses. It is then incumbent upon the competent authority to provide these entities with a detailed account of what has been identified. In doing so, the entity is better placed implement to a risk based approach to correct deficiencies.
The regulator is responsible for developing creative and effective means through which the information can be communicated to entities. It may be through meetings with compliance officers, correspondences, general notices posted on websites or trainings in which typologies are examined. The regulator must also implement avenues through which corrective actions taken by financial institutions or DNFBPs are identified and measured for effectiveness.
Suspicious transactions can be reported to the FIA through its website at www.slufia.com. These reports are held in the strictest of confidence.
Information on the FATF Forty Recommendations can be found on the Caribbean Financial Action Task Force (CFATF) website at https://www.cfatf-gafic.org.
Editor’s note: The preceding is Part 38 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.