|Part 1: Suggested actions for the legal and institutional framework|
|Customer due diligence||The AML Act should be amended to provide that core provisions on customer identification procedures are set out in the AML Act rather than in the Guidance Notes; The customer identification requirements regarding non-resident individuals and non-resident companies, as well as regarding IBCs, should be strengthened.|
CBS’ Comments: The proposal is to amend the existing AML Act and allow the Minister for Finance to make regulations and possibly use sections 6 and 10 of what has been proposed in the draft legislation on AML/CFT in the regulations.
|Record Keeping||The AML Act should be amended to provide that core provisions on record keeping procedures are set out in the AML Act rather than in the Guidance Notes.|
CBS’ Comments: Proposed regulations will set out what has been suggested in section 8 of the draft AML/CFT legislation.
|Suspicious transactions reporting||The AML Act should be amended to emphasize that suspicious transaction reports must be submitted promptly (without undue delay), and to provide for an explicit confidentiality waiver and legal protection for reporting entities and their staff when submitting suspicious transaction reports in good faith.|
CBS’ Comments: Proposed regulations would cover in detail reporting of suspicious transactions and possibly use what has been proposed in section 12 of the draft AML/CFT legislation.
|AML/CFT internal controls||Internal controls should be extended to include terrorist financing issues;|
The AML Act should be amended to require the appointment of a compliance officer.
CBS’ Comments. Proposed regulations would consider covering section 18 of the draft AML/CFT legislation.
|Sanctions||The AML Act should be amended to increase the maximum penalties for non-compliance with specific reporting and other obligations imposed under the AML Act; The authorities should consider the possibility to grant explicit authority to the CBS to impose administrative fines directly.|
CBS’ Comment: To be discussed with AG’s office.
|Integrity standards||The FIA and AML Act should be amended to require CBS approval of any subsequent changes in management, directors and significant shareholders;|
CBS’ Comment: The draft FIA contains such an amendment.
|With regard to other persons, the authorities may consider to establish fit and proper standards in the AML Act;|
CBS’ Comment: To be considered when updating guidance notes; the latter to become more binding.
|The Company Registrar should intensify background checks for managers, directors and shareholders of domestic companies; SIBA should increase the level of oversight for IBCs and for licensing registered agents and trustees.|
|Criminalization of money laundering and financing of terrorism||Legislation criminalizing terrorism, terrorist organizations and terrorist financing should be adopted as soon as possible, and by December 31, 2002 at the latest;|
CBS’ Comment: Prevention of Terrorism Act 2004 enacted in June 2004.
|The AML Act should be amended to stipulate the loss of authority to do business as one of the sanctions for money laundering;|
CBS’ Comment: To be considered as part of the amendment to the existing AML Act.
|The International Convention for the Suppression of the Financing of Terrorism and the Palermo Convention should be ratified as soon as possible, and by December 31, 2002 at the latest.|
CBS’ Comment: Palermo Convention ratified on March 30, 2004 while the former was ratified on April 22, 2004
|Confiscation of proceeds of crime or assets||The legal provisions on forfeiture should be amended to explicitly provide for the forfeiture of substitute assets obtained with funds that were partly proceeds of crime and partly legitimate resources, and for the forfeiture of assets of equivalent value. The provisions should also be clarified regarding the forfeiture of any income or gains received on proceeds of crime;|
The AML Act should be amended to permit the temporary seizure of assets.
CBS’ Comment: Proposed regulations would consider covering what has been proposed under section 38(13) of the draft AML/CFT legislation.
|Process for receiving analyzing, and disseminating disclosures of financial information and intelligence||The Central Bank of Seychelles Act should be amended to clearly set out that the CBS may exercise the function of a financial intelligence unit in the Seychelles;|
CBS’ Comment: To be included in the amendment to the AML Act.
|The AML Act should be amended to provide for an effective mechanism to freeze suspicious transactions;|
CBS’ Comment: To be considered as part of the amendment to the existing AML Act.
|CBS staff should be protected by granting explicit personal legal protection when carrying out their official duties;|
CBS’ Comment: Existing AML Act to be amended to cover this.
|One additional staff experienced in AML/CFT issues should be allocated to AML/CFT issues by December 31, 2002;|
CBS’ Comment: One experienced officer handles AML/CFT issues but is assisted by three other officers, including the head of Bank Supervision.
|The flow of information between the various government entities involved in the AML/CFT effort should be improved and a forum to combine the financial expertise of CBS staff with the investigative knowledge of the police force should be put in place.|
|International cooperation in AML/CFT matters||The powers of the CBS to receive and disseminate information should be specified by law.|
CBS’ Comment: Being taken up with the AG’s office.
|Part 2: Suggested actions for the banking sector|
|Organizational and administrative arrangements||CBS should carry out onsite inspections focusing on AML/CFT issues; Banks should be required to submit their AML/CFT internal guidelines to CBS for review;|
CBS’ Comment. Since 2003, five of the six commercial banks have undergone on-site examinations and their AML/CFT internal guidelines have been evaluated by CBS. The last bank is due to be examined in early September 2004.
|CBS should intensify training sessions and emphasize recent best practices regarding AML/CFT issues and regularly provide updated guidance on identifying suspicious transactions.|
CBS’ Comment. Training began in February 2004; the presentation carried out can be viewed on CBS’ website. www.cbs.sc.
|Customer identification and due diligence||Banks should increase their focus on identifying the ultimate beneficial owners of funds;|
CBS’ Comment: As part of the on-site examination carried out this is an area that is rigorously covered.
|Rigorous customer identification procedures for IBCs need to be put in place;|
CBS should issue special guidance regarding private banking activities and higher risk customers, such as politically exposed persons.
CBS’ Comment: These issues will be covered when the guidance notes are updated.
|Monitoring and reporting suspicious transactions||CBS should issue guidance to banks alerting them to the need to consolidate customer accounts for monitoring and suspicious transaction reporting purposes.|
CBS’ Comment: This issue will be covered when the guidance notes are updated.
|Record keeping, compliance and audit||CBS should ensure that all banks appoint a compliance officer.|
CBS’ comment: This has already been done during the on-site examinations recently carried out. CBS intends to have a presentation on the responsibilities of the MLRO or compliance officer sometime during the latter part of 2004.
|Cooperation between supervisors/regulators and competent authorities||The procedures for cooperation and exchange of information with central banks and foreign regulatory authorities should be enhanced and formalized.|
CBS’ Comment: Amendments have been made to the draft FI legislation to allow. for this.
|Licensing and authorizations||The reviews of CBS concerning fit-and-proper requirements for managers, directors and significant shareholders should be strengthened.|
CBS’ Comment: Amendments have been made to the draft FI legislation to cater for this.