Anti-Money Laundering / Combating the Financing of Terrorism Compliance Unit Ministry of National...

Anti-Money Laundering /

Combating the Financing of

Terrorism

Compliance UnitMinistry of

National Security

Objectives of the AML/CFT

Compliance Unit of the Ministry of National

Security.

• Receiving, analysing and responding to requests and reports  from FATF and CFATF;

• Identifying and recommending the way forward in respect of existing deficiencies within the AML/CFT framework;

• Cooperating and Co-ordinating with the Cabinet appointed AML/CFT Committee for the framing of recommendations for the formulation of National Policy in respect of AML/CFT.

The National AML/CFT Committee

Purpose :

To bring together all national stakeholders to contribute the development and formulation of AM/CFT recommendations for policy, legislation, reforms and implementation of action plans.

The Committee consist of:- Director, (AML/CFT) Unit, Ministry

of National Security (Chair)  Senior Legal Advisor to the

Attorney General (Deputy Chairperson)

The Director of Public Prosecutions

The Commissioner of Police

The Chief Immigration Officer -Ministry of National Security

The Comptroller of Customs and Excise

The Deputy Permanent Secretary -Ministry of Finance

The Head, Financial Intelligence Unit-Ministry of Finance 

The Head, Financial Investigations Branch-Ministry of National Security

 The Head, Central Authority Unit, Office of the Attorney General

The Legal Adviser to the Minister of Justice

Representatives of each of the following:

The Legislative Drafting Department

The Trinidad and Tobago Securities and Exchange Commission

The Central Bank of Trinidad and Tobago

What is Money Laundering?

Money laundering involves taking criminal proceeds and disguising their illegal source.

Simply put, money laundering is the process of making dirty money look clean.

Money laundering often involves a complex series of transactions that are usually difficult to separate.

Three Stages in the Money Laundering Cycle

Stage 1 PlacementThe physical disposal of cash or assets derived from criminal activity.

This phase can involve transactions such as:

• Breaking up large amounts of cash into smaller sums and depositing them directly into a bank account.

• Transporting cash across borders to deposit in foreign financial institutions, or to buy high-value goods — such as artwork, antiques, and precious metals and stones — that can then be resold for payment by check or bank transfer.

Stage 2 Layering

Involves the separation of illicit proceeds from their source by layers of financial transactions intended to conceal the origin of the proceeds.

Transactions within this phase:• Sending wire transfers of funds from one account to another, • Converting deposited cash into monetary instruments (e.g. traveler’s checks).• Reselling high-value goods and prepaid access/stored value products.• Investing in real estate and legitimate businesses.• Placing money in investments such as stocks, bonds or life insurance

Stage 3 Integration

This stage entails using laundered proceeds in seemingly normal transactions to create the perception of legitimacy.

Effect of Money Laundering and Terrorist Financing on the economy

• It destabilizes the economy and financial systems

• Increased crime and corruption

• Undermining the legitimate private

sector• Loss of tax revenue• Reputational risk for the country• Social Cost

Trinidad and Tobago Legislation on Money Laundering and the

Financing of Terrorism

Financial Institutions and listed businesses are required to have systems in place to ensure full compliance with the provisions of the Acts.

a)The Proceeds of Crime Act Chapter 11:27 (as amended)

b)The Financial Intelligence Unit of Trinidad and Tobago Act No. 11 of 2009 (as amended)

c)The Financial Obligations Regulations 2010

d)The Anti-Terrorism Act 2005 (as amended)

e)Financial Intelligence Unit Regulations 2011

POCA establishes procedures for the confiscation of proceeds of crime and for the criminalising of money laundering. It also outlines the circumstances in which a financial institution and/or its employees shall be guilty of the offence of money laundering.

This is dealt with in Sections 43-46

The FIU Act 2009 establishes a department, within the Ministry of Finance for the collection, analysis, dissemination and exchange of financial intelligence and information among law enforcement authorities, financial institutions and listed businesses in Trinidad and Tobago and internationally.

The Financial Obligations Regulations 2010 establishes minimum requirements to which financial institutions and listed businesses must abide to ensure that they are not used as a vehicle for money laundering.

The Anti-Terrorism Act 2005 criminalizes terrorist the financing of terrorism and introduces the procedure for the freezing of terrorist’s assets or funds.

As a consequence the suite of AML/CFT legislation ensures that Real Estate agents take certain steps to become compliant.

Definition of Real Estate under POCA

Any natural or legal person, partnership or firm carrying on the business of buying, selling or leasing land and any interest in land or any, buildings thereon and appurtenances thereto.

Risk Indicators for Real Estate Agents

• The payment of a cash deposit under a contract and then the cancellation of the contract for no apparent reason

• Buyers wanting to make payment in cash

• Cash is being transferred by an unrelated third parties for the acquisition of the property

Core requirements that will affect real estate agents include:-

• customer due diligence (CDD),

• suspicious transaction reporting,

• development of a compliance program and

• record keeping.

Customer due diligence

Real Estate agents will be required to:• identify and verify clients

• identify beneficial ownership involving corporate clients

• conduct on going due diligence and

transaction monitoring throughout the business relationship

Record keeping

Real estate agents will be required to collect information concerning, and retain records of, their clients' identity and their on going activities.

Reporting

Real estate agents will be required to make a report to the Financial Intelligence Unit if they suspect on reasonable grounds that a client is not who they claim to be or that information about a service may be relevant to tax evasion, a criminal offence, proceeds of crime or a money laundering or terrorism financing offence.

AML/CTF program

Real Estate Agents will be required to develop internal AML/CTF procedures and guidelines and ensure adequate AML/CTF staff training, in accordance with section 55(5) of the Proceeds of Crime Act

Effects on Real Estate Agents of Trinidad and Tobago being

BLACKLISTED

• Drop in Foreigners investing in local real estate

• Foreign wire transfers and correspondent banking between Trinidad and Tobago will be slowed due to applied extra scrutiny,

• Local banks will have to spend additional resources on scrutiny which will be passed on to the customer

• Non-acceptance of credit cards, foreign bank drafts, traveller cheques issued by banks within Trinidad and Tobago

• lowering of citizens’ current standard of living.

•US banks refusing to recognise entities incorporated in Trinidad and Tobago

End of Presentation