Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) | 12 July 2019
Seychelles to amend its laws to improve AML/CFT standards
The Ministry for Finance, Trade, Investment and Economic Planning is gearing up to draft and implement 19 legislative amendments and two regulations in regards to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT).
Some of these legislative amendments are expected to be approved by April 2020 while some will be finalised and enacted in 2021.
The cabinet of ministers approved the ambitious legislative timeline – which will enable the ministry to reach this deadline – during a cabinet meeting chaired by Designated Minister Macsuzy Mondon on Wednesday.
The timeline details when consultations will be conducted, when they are expected to be handed over to the Attorney General, when they should be put for approval before the National Assembly for enactment and when they should be assented to by the president.
Secretary of state for Finance, Trade, Investment and Economic Planning, Patrick Payet, explained that the country needs to amend its Anti-Monetary Laundering and Countering the Financing of Terrorism (AML/CFT) laws in order to improve its AML/CFT standards.
Mr Payet noted that the development and implementation of a robust AML/CFT regime would ensure that Seychelles meets the requirements set by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG).
This is particular significant since Seychelles was found lacking in terms of AML/CFT standards in the 2018 mutual evaluation report.
Efforts undertaken by the government to remediate this situation has included the setting up of a national AML/CFT committee in February this year.
Since then, Mr Payet noted, Seychelles submitted its first progress report in March 2019 and its next report is due for submission this month. Seychelles is expected to defend and discuss on the latter report in September 2019, during the upcoming ESAAMLG Task Force meeting.
“As per the regime we are currently under, Seychelles has to submit a progress report every six months to ESAAMLG, the institution in our region which we have to report to when it comes to AML/CFT,” Mr Payet stated.
“The assessors will be only able to evaluate the country’s progress report but if we are to request for a re-rating we need to submit a progress report six months in advance.”
In order to be re-rated Seychelles would therefore have to submit another report by April 2020, when some of the legislations have been enacted, and request for the re-rating in the September 2020 meeting.
“A good rating is important for the financial sector because it indicates to investors that their investments are sustainable. A robust AML/CFT is also crucial for local banks that rely on their relationships with international corresponding banks,” Mr Payet stressed.
The secretary of state noted that the legislative amendments will be conducted in two phases whereby the first group of legislations is hoped to be enacted by the end of this year or early 2020.
The second group of legislations is expected to be enacted in 2021.
“The main bill that is being worked on at the moment, and which will necessitate the most amendments, is the Anti-Money Laundering Act. We already have a draft which we are discussing with the Attorney General before we reach the consultative process,” Mr Payet stated.
He noted that the financial sector will be included in this consultative process since the sector will be most impacted by the new provisions and could contribute heavily to the revision of the Act.
“We would also have to ensure that there is a more sectoral approach to AML/CFT. Currently the Fraud Intelligence Unit (FIU) oversees all of this but we have determined that the Central Bank should have the oversight on banks and money exchange bureaus while the Financial Services Authority (FSA) will oversee the offshore and financial sector companies,” Mr Payet explained.
“In this regard the FIU will have to collaborate extensively with the Central Bank and the FSA.”
Amended regulations will also increase the capacity of Designated Non-Financial Businesses and Professions (DNFBPs) such as lawyers, real estate agents, car dealerships and accountants.
The National Assembly, the country’s legislative body mandated to enact laws, will be a key partner in this endeavour and consequently a consultative meeting has been scheduled with the National Assembly for next week, Thursday July 18.