President signs AML/CFT and Beneficial Ownership bills into law |06 March 2020

President Faure signing the bills into law (Photo: Joena Meme)

Less than 24 hours after the National Assembly approved the Anti-Money Laundering and Counter the Financing of Terrorism (AML/CFT) and the Beneficial Ownership bills on Wednesday, President Danny Faure yesterday afternoon signed the bills into law.

Now fully fledged laws, the AML/CFT and Beneficial Ownership acts were assented to with the aim of reinforcing our financial sector regime and deter the tide of dirty money flowing into the country.

The signing at State House was witnessed by Minister for Finance, Trade, Investment and Economic Planning Maurice Loustau-Lalanne, secretary of state for Cabinet Affairs Mohammed Afif, Governor of the Central Bank of Seychelles (CBS) Caroline Abel, Attorney General Frank Ally and chairman of the Financial Services Authority (FSA) Suketu Patel.

Also present were a large number of key government officials who assisted in the development of the two legislations, including members of the technical and national AML/CFT committees.

In his address yesterday Minister Loustau-Lalanne stated that the new legislations address deficiencies that were identified in the country’s legal framework in regards to money laundering and aims to implement measures to protect Seychelles’ financial system from abuse “by criminals who seek to hide their ill-gained wealth”.

These deficiencies were pointed out in the National Risk Assessment in 2017 and Mutual Evaluation Report in 2018.

The bills highlight the government’s concerted efforts to meet the international standards Financial Action Task Force (FATF) and receive a re-rating from the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG).

“One of the greatest criticisms of the AML Act of 2006 was that it did not make provisions for sanctions that were proportionate and effective as deterrent for reporting entities who were not complying with their obligations,” he stated.

The new AML/CFT Act however makes provisions for administrative, civil and criminal sanctions for non-compliance.

It brings about seven fundamental changes compared to previous anti-money laundering acts, some of which are:

• Now an independent body, the Financial Intelligence Unit (FIU) will take on an administrative role which is to receive, analyse and disseminate reports on suspicious transactions.
• Meanwhile the Seychelles police force will be responsible for investigating financial crimes, such as money laundering financing of terrorism, through its financial crime investigation unit.
• The establishment of an asset recovery fund, to be administrated by the Minister for Finance, in which money confiscated from financial crimes are to be debited. The fund expects to assist victims of money laundering and financing of terrorism, cover expenses from recovery, management and disposal of properties as well as to finance public projects.

On the other hand, the Beneficial Ownership Act aims to provide for the identification and verification of beneficial ownership of legal entities and legal arrangements and access on information by competent authorities and law enforcement authorities.

Local and offshore companies – including international business companies (IBCs), trusts, foundations, partnerships and associations – will be required to make available registers detailing information on their shareholders.

Secretary of state for Finance, Trade, Investment and Economic Planning Patrick Payet later explained that the ministry’s next step will be to conduct a proper awareness exercise to communicate the details of these new laws.

“Many of these provisions will be implemented from January 2021 but we have to prepare the structures and other regulations related to the laws[…] We also have to work with the industry to inform them of what is expected of them,” SS Payet stated.

He noted that they are also working towards building the necessary capacity and expertise to support the police force’s financial crime unit which currently only includes a handful of foreign and local experts.

The police force was provided with an additional funding in the 2020 budget to boost its capacity to investigate financial crimes and is expected to keep on receiving such to ensure the unit’s efficiency.

Elsie Pointe