Combating Money Laundering

The unchecked use of financial systems for money laundering purposes has the potential to undermine individual financial institutions and, ultimately, the entire financial sector. The increased integration of the world’s financial systems and the removal of barriers to the free movement of capital, have both enhanced the ease with which criminal money can be laundered and complicated the tracing process.

The Anti-Money Laundering Regulations 2005 as “relevant financial business” and are required to comply with the requirements in the Regulations and this includes the following obligations:

  • Deposit-taking business
  • trust companies
  • company formation agents and managers
  • stockbrokers
  • fund managers
  • insurance companies and intermediaries
  • financial intermediaries, accountants and lawyers
  • surveyors and real estate agents
  • casinos
  • dealers in precious metals and bullion
  • antique dealers, car dealers and others selling high value commodities and luxury goods
  • money transmitters
  • bureaux de change

Requirement to Know Your Customer

The “know your customer” rule should be applied by all regulated persons, although the extent of validation required may depend upon the type of business being undertaken, and the procedures to be followed will depend upon the legal personality of the applicant for business and the capacity in which he is applying.

Requirement to Keep Records

A regulated person must:

  • keep a record of all evidence obtained in respect of each person whose identity he has sought to verify. This applies whether or not a business relationship is eventually established or a transaction carried out. Identification records should include:
  • maintain a record of all transactions undertaken;
  • establish and maintain a register detailing all suspicious transaction reports and all money laundering enquiries made to the Reporting Authority;
  • keep such records in respect of staff training

Except in the case of training records which should be kept for at least 3 three years, all other records must be kept for a period of 6 years from the date when the person concerned ceases to be a client.

All records should be kept in Montserrat.

Requirement to Recognise and Report Suspicious Transactions

The Anti-Money Laundering Regulations require a regulated person to report to the Reporting Authority any transaction that gives rise to a suspicion that money laundering may be taking place. Reporting of a suspicion on reasonable grounds is not deemed to be a breach any legislative restriction on the disclosure of information.

Requirement to establish Internal Reporting Procedure

A regulated person must:

  • appoint one of his employees as a Money Laundering Reporting Officer (“MLRO”). The MLRO must be a member of management and the identity of the appointed officer must be notified to the Reporting Authority.
  • establish and maintain internal reporting procedures of how employees should deal with information or other matter relating to suspicious transactions;
  • make it a mandatory requirement that employees must disclose to the MLRO, as soon as reasonably practicable, any information or other matter that comes to his attention.

Requirement to Train Staff and bring awareness of the Anti-Money laundering Regulations to relevant staff

A regulated person must:

  • Provide MLROs with in-depth training on all aspects of the primary legislation, the Code and internal policies.
  • Ensure supervisors and managers should receive a higher level of training covering all aspects of money laundering procedures, including the offences and penalties arising from the relevant primary legislation for non-reporting or for assisting money launderer.;
  • Ensure that training is given to new staff as soon as possible after their appointment.

A person commits an offence under the Order if he believes or suspects that another person has committed an offence under any of articles 6 to 9 of the Order, and bases his believe or suspicion on information which comes to his attention in the course of a trade, profession, business or employment and he fails to make a disclosure to a constable (which definition includes the Reporting Authority) as soon as is reasonably practicable.

Combating the Financing of Terrorism

The Commission is committed to the fight against the financing of terrorism and ensures that persons subject to the requirements of the Anti-terrorism (Financial and Other Measures) (Overseas Territories) Order 2002 are made aware of their obligations under the Order to disclose information or other matter. The Order makes it an offence to provide funding for terrorism and a person commits an offence if he:

  • invites another to provide money or other property;
  • receives money or other property;
  • provides money or other property;
  • possesses money or other property;
  • he enters into or becomes concerned in an arrangement as a result of which money or other property is made available or is to be made available to another; and
  • he knows or has reasonable cause to suspect that it will or may be used for the purposes of terrorism or intends that it should be used, or has reasonable cause to suspect that it may be used, for the purposes of terrorism.