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IMF Hails Noticeable Efforts by St. Kitts-Nevis Government to Combat Money Laundering and Terrorist Financing

BASSETERRE, ST. KITTS, MAY 8TH, 2017 (PRESS SEC) – During the recent Article Four (IV) Consultation in St. Kitts and Nevis, International Monetary Fund (IMF) officials affirmed the progress that is continuously being achieved by the Government in strengthening the country’s anti-money laundering and anti-terrorist financing regime.

The IMF team, which visited St. Kitts and Nevis between April 18th and May 3rd, 2017, commended the Government of National Unity, saying: “The authorities have further improved compliance with international AML/CFT [anti-money laundering/combating the financing of terrorism] standards and exchange of information…”

The Federation’s demonstrable commitment to implementing international standards on financial transparency was a focus of the Government’s statement issued today, Monday, May 8th, 2017.  It was issued in response to erroneous statements about St. Kitts and Nevis contained in the U.S. Department of State’s 2017 International Narcotics Control Strategy Report, Volume II: Money Laundering and Financial Crimes.

The Government’s response stated in part: “…St. Kitts and Nevis’ commendable progress in implementing the recommendations of the Financial Action Task Force (FATF) precipitated the country’s removal from the list of jurisdictions with strategic deficiencies in their AML/CFT regimes.  Additionally, the Organisation for Economic Co-operation and Development’s (OECD) Global Forum on Transparency and Exchange of Information for Tax Purposes completed a Phase 2 Peer Review Assessment of St. Kitts and Nevis, rating it as “Largely Compliant” along with approximately 80 other countries, including the United Kingdom and the United States of America.”

Today’s response from the Government of St. Kitts and Nevis ended with this affirmation: “Our Government is working assiduously to demonstrate that we are committed to abiding by the same exacting standards that the United States of America and our other longstanding allies adhere to, as responsible members of the international community.”

Indeed, the Government of National Unity is actively engaged in collaborative efforts, a fact that the IMF took note of during its Article IV Mission to St. Kitts and Nevis.  For instance, the IMF observed that, “They [the St. Kitts-Nevis authorities] have strengthened the due-diligence process [of the Citizenship by Investment program] with dedicated resources and global collaboration, as this is essential to reduce integrity and security risks, preserve the program’s credibility, and avoid a race-to-the-bottom.”

The IMF team added that, “The mission thanks the authorities and technical staff for the warm welcome, constructive discussions, and positive spirit of cooperation.”

It was in this spirit of cooperation that, on August 31st, 2015, the Government of St. Kitts and Nevis signed an Inter-Governmental Agreement (IGA) with the United States to facilitate compliance by financial institutions in the Federation with the U.S. Foreign Account Tax Compliance Act (FATCA).

Then-U.S. Ambassador to Barbados, the Eastern Caribbean and the OECS, Larry Palmer said at the time that, “The United States welcomes St. Kitts and Nevis’ commitment to enhancing global financial transparency by improving international tax compliance.  Today’s signing marks a significant development in our nations’ collaborative efforts to combat offshore tax evasion – an objective that mutually benefits our two countries.”

Almost one year to the day later, Prime Minister Dr. the Honourable Timothy Harris attended another signing ceremony on behalf of St. Kitts and Nevis.  On August 25th, 2016, the Prime Minister of St. Kitts and Nevis signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, upon the invitation of the Organisation for Economic Co-operation and Development (OECD).

After the signing ceremony at the OECD headquarters in Paris, France, Prime Minister Harris deposited the Instrument of Ratification with the Organisation for Economic Co-operation and Development, thereby formalizing St. Kitts and Nevis’ commitment.

Deputy Financial Secretary in the Government of St. Kitts and Nevis, Mrs. Sylvia Gumbs, who observed both the FATCA and Multilateral Convention signing ceremonies in Barbados and France, respectively, noted last August that, “This [the signing of the Convention] will also further cement the country’s reputation for being a cooperative jurisdiction with respect to tax transparency, as we would have met all three criteria that assess a jurisdiction’s level of cooperativeness, namely (i) it being in receipt of a ‘Largely Compliant’ rating with respect to the Exchange of Information on Request Standard, (ii) its commitment to automatically exchange CRS [the Common Reporting Standard] information by 2018 at the latest, and (iii) its participation in the Convention.”

Mrs. Gumbs added that, “In an era where the Financial Services Sector is constantly being challenged with the introduction of new standards and regulations, to a point where some Correspondent Banking Relationships are at risk of being terminated, it is critically important that the Federation of St. Kitts and Nevis takes the necessary steps to protect our Financial Services Sector and ensure that our people and businesses are not prevented from conducting legitimate business worldwide.”

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