WHAT ARE THE
Money laundering and terrorism financing laws in the Seychelles?
In the Seychelles, money laundering and terrorism financing are serious offences and are governed by the following laws and regulations:
- Anti-Money Laundering Act 2020 (AML Act): This is the principal legislation addressing money laundering in the Seychelles. It outlines the offences related to money laundering and mandates the identification, reporting, and investigation of suspicious financial activities. The Act also sets out requirements for financial institutions and other reporting entities to conduct due diligence and maintain records of transactions.
- Prevention of Terrorism Act 2004: This law addresses terrorism financing, defining the offence and stipulating the legal measures to combat the financing of terrorism. It imposes penalties on individuals and organisations found guilty of providing financial support to terrorist activities or organisations.
- Financial Institutions Act 2004: This Act regulates financial institutions in the Seychelles and requires them to establish internal controls and measures to combat money laundering and terrorism financing. It also mandates compliance with the Central Bank's anti-money laundering guidelines.
- Anti-Corruption Act 2016: While primarily focused on corruption, this law also aids in preventing money laundering through its provisions that promote transparency and accountability in financial transactions, particularly for government officials.
- Seychelles Financial Intelligence Unit (FIU): The FIU, established under the AML Act, plays a critical role in monitoring and investigating suspicious financial activities. It is tasked with receiving, analysing, and disseminating information on suspected money laundering and terrorism financing cases.
- International Cooperation: The Seychelles is a member of international organisations such as the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), and it has committed to adhering to the Financial Action Task Force (FATF) recommendations on combating money laundering and terrorism financing.
These laws and institutions work together to create a comprehensive framework aimed at preventing financial crimes, protecting the integrity of the financial system, and cooperating with international efforts to combat money laundering and terrorism financing.
WHAT ARE THE
Key obligations reporting entities have under the Seychelles laws?
The key obligations under the AML/CFT laws in the Seychelles include:
- Business-Wide ML/TF Risk Assessments: Reporting entities must conduct business-wide risk assessments to identify and assess the money laundering and terrorism financing risks associated with their business activities, customers, products, and services. This involves evaluating the likelihood and potential impact of money laundering and terrorism financing risks and implementing measures to mitigate those risks.
- Internal Controls and Compliance Programs: Reporting entities are required to establish and maintain internal controls and compliance programs to ensure adherence to AML/CFT regulations. This includes policies, procedures, and training programs for employees to detect and prevent money laundering and terrorism financing activities.
- Customer Due Diligence (CDD): Reporting entities are required to conduct customer due diligence procedures to verify the identity of their customers and assess the risk associated with their business relationships. This involves collecting information such as the customer's name, address, identification documents, and the nature of the business relationship.
- Enhanced Customer Due Diligence (EDD): In cases where there is a higher risk of money laundering or terrorism financing, reporting entities must apply enhanced customer due diligence measures. This may include obtaining additional information about the customer, the source of funds/wealth, and the purpose of the transactions.
- Employee Training: Regular training must be provided to employees, ensuring they are knowledgeable about AML/CFT laws and regulations, including how to identify and report suspicious activities. Ongoing awareness programs should also be in place to keep staff informed of evolving risks and responsibilities related to money laundering and terrorism financing.
- Suspicious Transaction Reporting: Reporting entities are obligated to report suspicious transactions to the relevant authorities. This includes transactions that are unusual, inconsistent with the customer's known profile or business activities, or otherwise raise suspicion of money laundering or terrorism financing.
- Record-Keeping: Reporting entities must maintain records of customer identification, transactions, and due diligence measures for a specified period. These records must be sufficient to enable authorities to reconstruct transactions and demonstrate compliance with AML/CFT requirements.
- Reporting Obligations to Authorities: In addition to reporting suspicious transactions, reporting entities may have other reporting obligations to regulatory authorities. This may include reporting large cash transactions, cross-border fund transfers, and other activities specified in the regulations.
- Independent Audits and Reviews: Institutions must conduct independent audits and reviews of their AML/CFT programs to ensure compliance with regulations and to assess the effectiveness of their internal controls and procedures.
WHO ARE THE
ML/TF regulators in the Seychelles and what functions do they perform?
In the Seychelles, the regulators responsible for overseeing and enforcing AML/CFT measures are primarily:
- Financial Intelligence Unit (FIU): The FIU is the central authority responsible for receiving, analysing, and disseminating reports of suspicious transactions. It plays a critical role in combating money laundering and terrorist financing. The FIU works closely with law enforcement agencies and other regulatory bodies to investigate and combat financial crimes.
- Seychelles Financial Services Authority (FSA): The FSA is responsible for regulating and supervising non-banking financial institutions, ensuring they comply with AML/CFT obligations. It oversees the implementation of the Anti-Money Laundering Act and provides guidance on compliance requirements for financial services providers.
- Central Bank of Seychelles (CBS): The CBS regulates and supervises banking institutions in Seychelles, ensuring they adhere to AML/CFT laws and guidelines. The Central Bank conducts assessments and provides training to financial institutions on best practices related to preventing money laundering and terrorist financing.
- Seychelles Revenue Commission (SRC): The SRC is responsible for enforcing tax laws and can play a role in combating financial crimes through its oversight of tax compliance and financial transactions. It collaborates with other regulatory bodies to identify and investigate potential money laundering activities.
- Law Enforcement Agencies: Various law enforcement agencies, including the Seychelles Police Force, are involved in investigating and prosecuting offences related to money laundering and terrorism financing. They work in conjunction with the FIU and other regulatory bodies to enforce the law.
- Ministry of Finance and Economic Affairs: The Ministry plays a strategic role in developing policies related to financial crime prevention and oversees the overall financial regulatory framework in Seychelles.
- National Anti-Money Laundering and Combating the Financing of Terrorism Committee (NAMLATFC): This inter-agency committee coordinates national efforts to combat money laundering and terrorism financing, bringing together various stakeholders from government and law enforcement.
WHAT ARE THE
Industry sectors subject to ML/TF regulations?
The regulated industry sectors in the Seychelles subject to AML/CFT regulations include, but are not limited to:
Designated Non-Financial Businesses and Professions (DNFBPs)
Including lawyers, accountants, real estate agents, trust and company service providers, dealers in precious metals or stones, and other professionals or businesses engaged in high-value transactions.
WHAT ARE THE
Penalties for non-compliance with AML/CTF laws?
The penalties for non-compliance with money laundering and terrorism financing laws in the Seychelles can include the following:
- Administrative Sanctions: Regulatory authorities have the authority to impose administrative sanctions on entities found to be in violation of AML/CFT regulations. These sanctions may include fines, warnings, temporary suspensions of operations, or revocation or suspension of operating licences.
- Criminal Penalties: Serious violations of AML/CFT laws may lead to criminal prosecution. Individuals or entities engaged in money laundering, terrorism financing, or related offences may face criminal charges, which can result in imprisonment, substantial fines, asset freezing or seizing or any combination of these. Criminal penalties may vary depending on the severity of the offence and applicable laws.
- Civil Penalties: In addition to administrative and criminal sanctions, non-compliance with AML/CFT laws may expose individuals and entities to civil penalties. This could involve legal action brought by regulatory authorities or affected parties seeking damages for harm caused by the violation of AML/CFT regulations.