The Domestic Financial Institutions Conference (DFIC) was jointly hosted by the Central Bank of Barbados and the Financial Services Commission (FSC) in August 2020. Regulators and representatives from the financial sector discussed the topic "Customer Due Diligence, Reporting Obligations & Monitoring.”

Opening discussions by the panel focused on the need for financial institutions (FIs) to comply with international Anti-Money-Laundering and Combatting the Financing of Terrorism (AML/CFT) requirements. The panel clarified that the fulfilment of these requirements is the main rationale behind customers having to submit a checklist of documents that include ID, proof of address, and source of funds such as job letters.

Noting the findings of the Nationals Risk Assessment (NRA) for Barbados, Cyralene Benskin-Murray, General Counsel at the FSC stated that the country is particularly vulnerable to fraud and it posed a significant threat in terms of crime. In her contributions, Ms. Cyralene Benskin-Murray noted that FIs utilize the information requested from customers as part of the due diligence process to fight money laundering (ML) and terrorist financing (TF). She noted furthermore, the information facilitates monitoring, reporting purposes and developing customer profiles that help establish a pattern for incoming and outgoing funds, which greatly assist FIs to protect its customers from financial crimes.  

Using an example of fraudulent online activities to transfer money from one account to another, the General Counsel revealed that such activities have occurred before and highlights the need for ongoing due diligence. Noting that the attempted transaction was prevented because the FI flagged the transaction as unusual for the customer being targeted, FIs were urged not treat requests for information as repetitious. She added, "you are not required to produce information for just producing it sake. It is not about collecting information. The ultimate goal is to prevent money laundering and terrorist financing. The goal is to also make sure that predicate offenses, which are like fraud, corruption, and drugs, that the proceeds for those crimes do not find their way into our system.”

One recommendation put forward in the sessions to address the need for the increased use of due diligence measures is the application of more risk-based assessment principles such as Know Your Own Customer (KYOC). However, General Counsel Benskin-Murray warned that FIs should be mindful to protect financial inclusion. General Counsel Benskin-Murray went on further to say that “increasing the convenience to customers first, through financial education and communication” assist customers to understand and helps FIs in the long run. She further noted that voluntary compliance with the measures is encouraged when customers understand the reasons for the process and adequate training of frontline staff in FIs will greatly assist in streamlining this process based on the risk profile of the customer.

The Financial Investigations Division (FID) of the Ministry of Finance and the Public Service in Jamaica has forfeited Jamaican $524,000 and £1,850 from Abdullah el-Faisal in the St Catherine Parish Court on August 7^th, 2020. The money was seized by the Jamaican Constabulary Force (JCF) in 2017 under the Proceeds of Crime Act (POCA). Mr. el-Faisal was the subject of an extradition warrant from the U.S. Government, which alleges his involvement in terrorism offences. The money was found at his home following his arrest.

Following investigations by the FID on the origin and intended use of the money, an application for its forfeiture was made to the Court. The Court ordered that the money be forfeited to the State. The Ministry of Finance and Public Service noted that this decision follows shortly after a Court of Appeal judgement which upheld the application for Mr. el-Faisal to be extradited to the U.S. to stand trial.

The Chief Technical Director of the FID, Selvin Hay, stated that “This forfeiture highlights the commitment of FID and its partners, in this instance the Jamaica Constabulary Force, to robustly apply the Proceeds of Crime legislation where appropriate in conjunction with any investigation being conducted. The majority of criminal and civil investigations being conducted across Jamaica inevitably involve profit, and this profit can and will be taken from those persons who are concerned in any way.”

He further noted that there are a large number of offences committed under POCA, which includes not only the initial commission of a crime, but knowingly assisting either before, during or after the fact.

An enhancement of the digital asset regulatory framework in Bermuda is being sought through a Consultation Paper that outlines the proposed changes to the country’s current Digital Asset Business Act, 2018. The amendments put forward in the Consultation Paper seeks to give “greater clarity to certain sections and to make other changes that are intended to facilitate the development of the FinTech sector in Bermuda and a more effective administration of the Act”.

 The Consultation Paper notes that the primary intended amendments to the Digital Asset Business Amendment Act, 2020 (Bill) will: 1) amend some definitions to clarify the Bermuda Monetary Authority’s (BMA’s) intent in certain sections; 2) insert a requirement to notify the BMA of changes to exemption conditions; 3) extend the Authority’s ability to modify applicable fees and 4) establish a new testing licence to be called a Class T licence, which will facilitate the testing and piloting of a business model, product or service within the FinTech regulatory framework.

The consultation period for the submission of views on the proposals set out in the paper and Bill will conclude on September 7^th, 2020 at which time further steps would be taken. The Consultation Paper for the Digital Asset Business Amendment Act, 2020 can be found here.