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CARIBBEAN REGULATORY ROUNDTABLE

THE CASE OF TRINIDAD AND TOBAGO

PRESENTATION BY: MR. JWALA RAMBARRAN

GOVERNOR CENTRAL BANK OF TRINIDAD AND TOBAGO

FEBRUARY 20TH 2014

14TH ANNUAL FIBA AML COMPLIANCE CONFERENCE MIAMI, USA

AML GLOBAL EXCHANGE

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STRENGTHENING AML/CFT LEGAL FRAMEWORK

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STRONG COLLABORATION AMONG THREE SUPERVISORY AUTHORITIES

Listed Businesses include: •Real Estate •Motor Vehicle Sales •MVTS •Gaming House •Pool Betting •National Lotteries •Online Betting Games •Jewelry •A Private Members’ Club •An Art Dealer •Trust and Company Service Provider •An Accountant, an Attorney-at-law or independent Legal Prof.

Non-Regulated Financial Institutions include: •Credit Union •Building Society •Postal Service •Provider of cash remitting services.

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IMPROVEMENT IN LEVEL OF STR/SAR REPORTING

REPORTING ENTITIES 2010 2011 2012 2013

Financial Institutions 84 202 198 193

Banking 58 151 154 152

Exchange Bureaux 0 0 0 3

Insurance Co. 1 9 10 3

Mutual Funds 19 28 22 26

Mortgage Co. 5 14 7 5

Security Dealers 1 0 5 4

Supervised Entities 27 101 60 361

Attonerys-At-Law 0 2 1 6

Co-operative Societies 2 5 16 20

Jewellers 0 0 1 2

Money/Value Transfers 25 90 38 314

Motor Vehicle Sales 0 1 3 9

Postal Services 0 0 1 0

Real Estate 0 3 0 3

Private Members Club 0 0 0 7

Total 111 303 258 554

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INTELLIGENCE REPORTS SENT TO LEAs FOR ACTION

On-going Analysis 32%

STRs/SARs generating Intelligence

Reports 17%

Filed for Intelligence

51%

Over the period 2011-2013, a total of 1115 STRs/SARs were received of which:

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• Based on the information from the FIU, there have been some significant ML/FT trends:

– Intra-island money transfers: where individuals in close proximity to each other in Trinidad and Tobago are sending money to each other via the money and value transfer services.

– Comingling of Accounts: incidence of individuals and private companies comingling accounts and transferring funds overseas.

– Use of cash: for large purchases

– Layering: funds being moved frequently through Real Property purchases and sales.

EMERGING ML/FT TRENDS

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• Conference Scam: it is a form of the Advance Fee/Fraud Scam

• Nigerian Scam/Advance Fee/419: letter/email from a person of importance who wants your help to get a large sum of money so you are asked for your name, address, passport number and bank account information so the funds can be wired. Perhaps a cheque arrives and you are instructed to send a share back to him/her through a money transfer service. May be asked for advance fees (lawyers/taxes) which is a small amount compared to the sum promised.

• Lottery Scams: receive a telephone call/email that you won a foreign lottery but you must pay taxes/fees associated with your winnings.

• Job Scams: “Work at home” schemes where you provide a bank account number so funds can be deposited by the “employer”. You are required to withdraw the funds, take a 10% commission and wire transfer the rest to another person.

• Friend in distress (Email Scam): your email is hacked and the ‘scammer’ pretends to be the account owner, sends emails to all the contacts asking for money urgently, asking that people to transfer money to an account number.

• E-cards/Prepaid Cards: allow movement of funds as they can be loaded from one country but utilized in another country by various individuals, creating layers and disguises the source, and facilitates the financing of terrorism.

TYPOLOGIES OF ML/FT SCAMS

STRENGTHENING REGIONAL PARTNERSHIPS

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LANDMARK DEVELOPMENT: T&T FIU JOINS EGMONT GROUP

• EGMONT GROUP OF FIUs

– At the 21st Egmont Group Plenary, on July 3 2013, our FIU became a member of the Egmont Group, the internationally recognized Anti-Money Laundering forum of Financial Intelligence Units.

– This development will greatly enhance information exchange between Trinidad and Tobago and other countries in anti-money laundering, financing of terrorism, and related investigations.

– This achievement marks an important milestone in the growth and development of the FIU as it now joins 138 other FIUs that comprise the Egmont Group.

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PREPARATIONS FOR FOURTH ROUND MUTUAL EVALUATION

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• In January 2015, Trinidad and Tobago will be the first Caribbean jurisdiction to undergo the Fourth Round Mutual Evaluation utilizing the revised FATF’s 40 Recommendations.

• This 4th round mutual evaluation is rigorous, time-consuming and will call for considerable resources, both technical and financial.

• An inter-ministerial committee was formed comprising the Minister of Finance and the Economy and the Minister of National Security and chaired by the Attorney General. This committee will oversee the work of the National AML/CFT Committee to ensure that we remedy the Third Round deficiencies and fully prepare for the Fourth Round Evaluation.

CENTRAL BANK’s INVOLVEMENT IN COMBATING AML

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ACTION ITEMS STATUS

Cooperation (a) MOU

(b) Ongoing meeting with stakeholders (regulators, insurance, security and banking associations)

•FIU and Central Bank: expected to be finalized shortly •SEC and Central Bank: already executed, (just to operationalize). • Quarterly mtgs held to highlight the need for high level of compliance with AML/CFT requirements.

Examinations Insurance Brokers, Money Remitters, Bureau de Change, Credit Unions, Banks and Insurers

Four of the largest Brokers and Bureau de Change will be examined. Money remitters are already examined by the FIU. For Credit Unions, assistance will be provided to FIU. The Banks and Insurers are currently being examined by Central Bank.

CENTRAL BANK’s INVOLVEMENT IN COMBATING AML (cont’d)

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ACTION ITEMS STATUS

National Risk Assessment (NRA) (coordinated by FIU and Ministry of National Security)

• Efforts underway to conduct NRA using the World Bank template. Central Bank staff has been trained to participate in the preparation of the NRA.

Training (a) National Risk Assessment

methodology (Dec 2013) (b) 4th Round Methodology (Jan 2014) (c) Pre assessment training of Mutual

Evaluation methodologies

The Central Bank continuously provides staff with training opportunities in AML/CFT. The Central Bank participated in the NRA and 4th Round methodologies training.

Independent AML Reviews All companies will be independently reviewed by their external auditor.

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• Remedy outstanding deficiencies from the 3rd round Mutual Evaluation by November 2014. An action plan was circulated to members of the National AML/CFT Committee for review and comment by January 31, 2014.

• Amendments to POCA, ATA and FOR to facilitate the revisions of FATF’s 40 recommendations on AML/CFT.

• Conduct a National Risk Assessment (NRA) which should be completed by November 2014. The World Bank’s assistance is being sought and training on the NRA is expected to take place in March 2014.

• Develop a Strategic Plan for Trinidad and Tobago 4th Round Mutual Evaluation.

• The Central Bank and the SEC will soon sign Memoranda of Understanding with the FIU. This will facilitate greater co-operation and sharing of information with the means to strengthening the regulatory and supervisory framework for AML/CFT.

NATIONAL PREPARATIONS FOR FOURTH ROUND MUTUAL EVALUATION