Joint effort to combat money laundering and terrorism financing |03 September 2020

The signing of the MoU: (l to r) Dr Fanny, Governor Abel and Mr Rampal (Photo: Jude Morel)

The Central Bank of Seychelles (CBS), the Financial Services Authority (FSA) and the Financial Intelligence Unit (FIU) have teamed up in the fight against money laundering and terrorism financing through the signing of a memorandum of understanding (MoU).

This is in accordance with the new Anti-Money Laundering and Countering of Terrorism (AML/CFT) Act 2020, launched last week to combat money laundering and terrorism financing in the country.

The signing of the MoU between the governor of CBS, Caroline Abel, the chief executive of FSA, Dr Steve Fanny and the director of FIU, Richard Rampal, took place yesterday morning at the CBS conference room.

The new AML/CFT Act has provides the three institutions with additional functions to supervise and enforce compliance with the Act by all entities falling under their regulatory purview.

The signing of the MoU further strengthens the collaboration that already exists between the three institutions, in the areas of joint inspections where required, sharing of experiences and exchange of information, including with other law enforcement bodies and the Seychelles Revenue Commission (SRC).

Addressing all present, Governor Abel said that CBS has been getting ready for this new challenge since last year with the setting up of a new AML/CFT section, which is now formally empowered to execute its functions.

She noted that resources will be allocated to the implementation of a risk-based approach to supervision of these institutions, and take measures to mitigate the impact of non-compliance.

“As we all know, money laundering and terrorism financing have far-reaching consequences not only for the entities but also impact on the credibility and stability of the financial system. As regulators, while we each have our responsibilities, enhancing coordination is also crucial, if we are to succeed in our fight against such threats,” Governor Abel said.

In the past, the FIU was sole supervisory authority across all sectors but it was concentrating more in the offshore sector and less on the domestic sector in its fight against money laundering and terrorism financing. Now the new act has brought numerous changes where the supervision of government and private institutions, among others, are shared also between CBS and FSA.

In the sharing of supervisory responsibilities, CBS will supervise and report on the activities of commercial banks, money changers, Seychelles Credit Union (SCU), Development Bank of Seychelles (DBS), Housing Finance Company (HFC) and payment service providers such as Airtel. FSA will on its part supervise and report on the activities of corporate service providers (CSPs), insurance companies and the gambling industry.

FIU will now focus its attention on supervising the Designated Non Financing Businesses and Professions (DNFBP) sector which involves accountants, real estate agencies, car dealers, auditors, lawyers and high value goods dealers, “where some key deficiencies were identified through the National Risk Assessment and the Mutual Evaluation Report,” according to Mr Rampal.

“Through all of these changes, one key aspect of our mandate remains unchanged. The FIU remains the central agency for the receipts of suspicious transaction reporting from all reporting entities. In this context we are pleased to report that this year alone, the FIU has recorded a significant increase in the number of suspicious transaction reporting it has received. This shows an improvement in the internal control system of reporting entities for monitoring and detection of suspicious activities,” Mr Rampal said.

Mr Rampal noted that the act should not be seen as a burden to individuals or to those in businesses as it is there to protect the country’s integrity and reputation against illegal activities such as fraud, corruption and drug dealings among others, where those involved try to launder their benefits through the legal financial system.

For his part Dr Fanny said that there are indeed serious risks posed to the AML/CFT regime and the MoU will enhance supervisions and mitigate the risk that people will pose to the financial services industry.

“We are sending a message out there today where we are saying to people that yes we want you to come into our jurisdiction, yes we want a financial services industry, but if you have unscrupulous intentions, Seychelles will not be welcoming to you and she will not be the right jurisdiction for you,” Dr Fanny said.

The signing of the MoU between the three AML/CFT supervisors is seen between them as testimony of their commitments to formalising and deepening their partnership a step further in assisting national efforts to combat and deter money laundering and terrorism financing.

Staff from the three institutions were also present at the signing of the MoU.

Patrick Joubert