What is the difference between Non-Regulated Financial Businesses and Designated Non Financial Businesses and Professions?
There is no difference. In 2010 when amendments to the Proceeds of Crime Ordinance and The Regulations were enacted it was considered that the use of the term Non-Regulated Financial Business (NRFB) was the most appropriate collective name.
Subsequent to the 2010 amendments the terminology adopted by the Financial Action Task Force, became Designated Non Financial Businesses and Professions (DNFBP) has become widely accepted. The change recognises the inclusion of a number of types of business generally referred to as Dealers in High Value Goods and which clearly are not financial businesses in any form.
Appropriate amendments will be made to the Proceeds of Crime Ordinance and the Regulations in due course.
As well as providing details of the business constitution and the owners the Application for Registration is asking for information on the size of business, number of employees and location of my customers. What has this to do with anti-money laundering?
An important component of an efficient anti-money laundering regime is the adoption of a risk based approach to the requirements of the regulations and the Code. Adoption of the risk based approach must be supported by a risk assessment which is carried out at the levels of the Turks and Caicos Islands, as a whole, each designated profession and finally at the individual business entity level.
The information requested on the size and source of business will contribute to the jurisdiction and profession level risk assessment.
My business as a legal professional operates from the same premises as my Trust Company and Company Formation business. Do I still need to register?
Yes. The business of an independent legal professional is a specific category within the definition of Designated Non Financial Businesses and Professions.
Trust and Company Management businesses are separately regulated by the Commission through the Company Management (Licencing) Ordinance and The Trusts Ordinance. Regulatory oversight includes compliance with the Regulations.
I only carry out commercial estate agency work – am I supervised by the Commission and do I need to register?
Yes. The regulations do not distinguish between residential and commercial estate agency work.
Yes. Registration renewals will be required at three yearly intervals from the date of first registration.
Material changes to the details provided on registration must be advised in writing to the Commission, within 30 days, by providing an updated Application to Register.
Can the Money Laundering Compliance Officer (MLCO) be the same person as the Money Laundering Reporting Officer (MLRO)?
Yes. See Regulation 22(5).
It is up to the management of the individual business to organise themselves in a cost efficient way at the same time as ensuring that they remain compliant.
The objective is to have the most qualified or experienced person(s) in these roles.
Regulations 21 and 22 require that these appointments be approved by the Supervisor.
I am considering outsourcing the roles of the Money Laundering Compliance Officer and Money Laundering Reporting Officer. Can I do this and what are the implications?
Yes but subject to prior approval of the Commission. (Please refer to The Code Section 7.)
It must be remembered that overall accountability for compliance with the Regulations shall always remain with the most senior person in the organisation. The decision to outsource does not remove that accountability.
Careful consideration is necessary to assess the skills and experience provided by the firm undertaking the outsourced work and this must be demonstrated to the Commission to support any request.
A clear and documented form of agreement must exist between both entities to ensure roles and responsibilities are understood.
I have known some of my clients for many years, why should I be required to identify them at this stage?
The Regulations require that all clients must have appropriate due diligence information. That due diligence includes identification.
It is recognised that with existing clients it will be time consuming to complete due diligence as a single exercise. It is therefore understood that a transitional period must apply to allow for due diligence information to be collected at the time of client interaction.
Therefore businesses and professions are allowed a six month period from registration to put in place complete due diligence on existing customers.
My firm is small with only a few employees. My Money Laundering Compliance Officer and Money Laundering Compliance Officer are of limited experience. Will that prevent approval of registration?
No, not if that is the only issue. The Commission will be providing specific training to those individuals in the respective roles. This training will open to all Money Laundering Compliance Officers and Money Laundering Reporting Officers, however those officers with limited experience will be expected to attend and such attendance will be a factor in determining continuing registration.
The business must have an effective Anti-Money Laundering and Countering Terrorist Financing regime. The following high-level guidelines are provided as a framework, and further details will be provided on the website and in the training material.
- Put in place risk sensitive policies and procedures to identify and verify the customer’s identity before entering into a business relationship or transactions and to obtain information on the purpose or nature of the business transaction.
- Put in place checks, controls and procedures in order to prevent as far as possible money laundering or terrorist financing.
- Train staff in these procedures and in the law relating to money laundering and terrorist financing.
- Appoint a Money Laundering Compliance Officer and Money Laundering Reporting Officer, the latter individual being responsible for reporting suspicious activity to the Turks and Caicos Islands Financial Intelligence Unit. Regulations 21 and 22 require that these appointments be approved by the Supervisor.
- Maintain records used to establish customers identity and of business relationships for a minimum of five years.
Sector Specific Guidance Notes will be provided as soon as possible.