Assembly considers, approves amendments to more laws to fight money laundering, financial crimes |06 March 2021

For the second time this week members of the National Assembly put aside its debate and scrutiny of the different budget allocations to urgently consider and approve several amendments to two pieces of legislation with great international financial implications in the fight against money laundering, terrorism financing and other financial crimes.

Amendments to the International Trusts Act, 1994 were presented for Assembly consideration and approval by the Minister for Finance Naadir Hassan.

The International Trusts Act, 1994 was enacted to make provisions for International Trusts in Seychelles.

The Financial Action Task Force (FATF), an inter-governmental body established in 1989 by the ministers from members’ jurisdictions, set out the standards to promote effective implementation of measures to combat money laundering activities. Recommendation Numbers 24 and 25 of the said act relate to transparency and beneficial ownership of legal persons and legal arrangements.

The Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), a regional body, has been tasked by the FATF to oversee the implementation of FATF recommendations in the region. The ESAAMLG evaluated the steps taken for implementation of FATF recommendations by Seychelles and submitted its Mutual Evaluation Report (MER) in September, 2018.

In order to meet with the shortcomings and address the gaps identified by the ESAAMLG on Seychelles, it is proposed to amend sections 29A and insertion of new section 33A in the International Trusts Act (Cap.276).

Amendment of section 29A provides for substituting section 29A(1)(a), so as to seek more information from the Trusts.

Insertion of new section 33A in the International Trusts Act provides for disclosure of the status of the trustee of a trust and punishment for failure to disclose such information.

Presenting the amendments Minister Hassan explained that Recommendation 25 obliges all jurisdictions to put in place measures to ensure that all ‘trustees’ reveal their status to financial institutions when they are establishing business relations or doing a business transaction. FATF standards oblige that the law allows ‘competent authorities’ to obtain information on the trust and for financial institutions to receive information on beneficial ownership or assets of the trust.

The proposed amendments also provides for a trustee who breaks the law to pay a penalty fee of not more than US $5,000.

Amendments to Section 29 also provides for the introduction of an International Trusts Register in which all trustees will have three months to register all their necessary details and abide by the new obligation.

Minister Hassan said the amendments to this piece of legislation is important for Seychelles so as to make our country compliant with all international norms, standards and regulations.

Amendments to the Prevention of Terrorism Act, 2004 were presented to the Assembly for consideration and approval by the Minister for Internal Affairs, Errol Fonseka. Also as per the shortcomings and gaps identified by the ESAAMLG in its Mutual Evaluation Report on Seychelles, amendments to several sections were recommended.

These include amending section 2 which provides for definitions of the terms ‘financial institution’, ‘funds’, ‘person’, ‘legal person’, ‘property’, ‘terrorist’ and expanding the scope of the term ‘terrorist acts’ and ‘terrorist group’. It is proposed to give the reference of the definitions provided in the AMLCFT Act, 2020.

Amending sections 5, 6, 15, 27 and 35 of the Prevention of Terrorism Act (PTA) to align with the recommendations of the FATF, to insert a new section 20A in the PTA to provide for punishment for the legal persons for violation of any provisions of the PTA Act, to insert a new PART-IIIA in the PTA Act to provide provisions for proliferation of weapons of mass destruction and its financing.

Minister Fonseka said when presenting the amendments that Seychelles has until September 2021 to complete its review of these recommendations and address the shortcomings identified in the report.

He further stressed it is important that Seychelles do not miss the September deadline.

Assembly members, legal officers from the Attorney General’s office as well as other concerned officials were in the Assembly to discuss and scrutinise the proposed amendments before they were approved.

Marie-Anne Lepathy