Drug trafficking and fraud are primary sources of illicit funds in St Kitts-Nevis: US report

The United States Department of State in Washington, DC, said drug trafficking and fraud are the primary sources of illicit funds in the Federation of St Kitts and Nevis.

The International Narcotics Strategy Report for 2018 prepared by the Department of State and sent to the United States Congress also noted that while St Kitts and Nevis has helped foreign jurisdictions with money laundering cases, the country has not brought charges or prosecuted a money laundering case since 2015.

It noted that the Financial Services Regulatory Commission (FSRC) (Saint Kitts Branch) is responsible for the licensing, regulation, and supervision of the non-bank financial sector in Saint Kitts.

"As of September 2018, the regulated entities supervised by the Saint Kitts Branch are two insurance managers, 52 trust and service providers, 15 domestic insurance companies, 11 MSBs, four credit unions, and one development bank.

The FSRC (Nevis Branch) is responsible for the licensing, regulation, and supervision of regulated persons and entities in Nevis that conduct fiduciary and international financial services," the INCSR report said.

"As of September 2018, the regulated entities supervised by the Nevis Branch are 18 insurance managers, one international bank, 53 registered agents/service providers, three international insurance brokers, five MSBs, and 326 international insurance companies," said the report which pointed out that there is no recent information on the number of IBCs, limited liability companies, or trusts on either island," said the report.

"International experts have identified drug trafficking and fraud as the primary sources of illicit funds. Financial oversight of the offshore sector in Nevis remains challenging due to the strong secrecy and confidentiality laws covering IBCs and trusts. Bearer shares are authorized if the bearer share certificates are retained in the protected custody of persons or financial institutions authorized by the Minister of Finance," the report said.

The report said that specific identifying information must be maintained on bearer certificates, including the name and address of the bearer and the certificate’s beneficial owner." the International Narcotics Control Strategy Report (INCSR) said.

"International experts have recommended improvement in the following areas: ensuring information is available in a timely fashion on all owners, partners, and beneficial owners of a partnership or company; and ensuring the availability of accounting information for such entities," said the report.

"While Saint Kitts and Nevis has helped foreign jurisdictions with money laundering cases, the country has not brought charges or prosecuted a money laundering case since 2015," the International Narcotics Control Strategy Report said.

The Report disclosed that in 2016, the FSRC issued a General Warning that online Casino and Online Gaming entities are illegal in Saint Kitts and Nevis.