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Guideline on Anti-Money Laundering and the Combating of Terrorist Financing1. INTRODUCTION1.1 The revised Guideline on Anti-Money Laundering (AML) and the Combating of the Terrorist Financing (CTF)(the Guideline) seeks to provide institutions regulated by the Central Bank of Trinidad and Tobago (the CentralBank) with guidance as to what is required to implement adequate AML/ CTF compliance frameworks withintheir institutions. This Guideline therefore replaces the Central Bank’s 2005 Guideline on AML/ CTF.1.2 The global threat of money laundering and the financing of terrorism have led financial sector regulators andfinancial institutions to strengthen their vigilance in support of the efforts of governments to more easily detectattempts to launder money and finance terrorism and to minimise the possibility that their jurisdictions orinstitutions become involved in such activities. Effective enforcement of policies to deter money launderingand the financing of terrorism should, inter alia, enhance the integrity of the financial system and reduceincentives for the commission of crime within a jurisdiction.1.3 Financial institutions are attractive conduits for money launderers and persons wishing to finance terrorismsince the services offered can be easily utilised to conceal the true origin of money. It is the duty of eachfinancial institution to ensure that preventative measures are in place to deter such activity.1.4 Money laundering (ML) and terrorist financing (TF) prevention should not be viewed in isolation from aninstitution’s other business systems and needs, but as part of the institution’s overall risk managementstrategies. Consequently, it is imperative that the board and senior management of financial institutionsensure that the policies, procedures, systems and processes that are put in place to prevent ML and TF arerisk-based and commensurate with the size, complexity and risks of their financial institution.2. PURPOSE OF THE GUIDELINE2.1 The objective of this Guideline is to assist financial institutions with the following:-a) complying with legislative and regulatory requirements contained in the following AML/ CTF laws:-i. Proceeds of Crime Act Chap 11:27 (POCA),ii.iii.iv.The Financial Obligations Regulations 2010 (FOR),The Anti-Terrorism Act Chap 12:07 (ATA);The Financial Obligations (Financing of Terrorism) Regulations, 2011 (The Financing of TerrorismRegulations);v. The Financial Intelligence Unit of Trinidad and Tobago Act 2009 as amended in 2011 (FIUTTA); andvi.The Financial Intelligence Unit Regulations, 2011 (The FIU Regulations);Page 1 of 75
Guideline on Anti-Money Laundering and the Combating of Terrorist Financingb) implementing effective procedures and controls to manage AML/ CTF risks; andc) establishing adequate AML/ CTF compliance programmes.2.2 It is critical that financial institutions implement effective controls for ML and TF risks. A financial institution’scompliance programme, in addition to meeting statutory criteria, should be adapted to reflect the nature, scope,complexity and risk profile of the institution. Financial institutions are therefore expected to consider the contentsof this Guideline when implementing their AML/CTF programmes.2.3 This Guideline therefore sets out the expectations of the Central Bank in relation to the minimum standards forAML/ CTF practices by all financial institutions and, together with the POCA, FOR and ATA, will form anintegral part of the framework used by the Central Bank in assessing the adequacy and effectiveness of theimplementation of institutional AML/CTF frameworks.3. MONEY LAUNDERING AND FINANCING OF TERRORISM3.1 Money Laundering3.1.1 Money laundering is the process by which the direct or indirect benefits of crime are channeled throughfinancial institutions to conceal the true origin and ownership of the proceeds of criminal activities. Ifsuccessfully undertaken, it allows them to maintain control over those proceeds but the money canlose its criminal identity and appear to be legitimately derived.3.1.2 The ability to launder the proceeds of criminal activity through the financial system is vital to thesuccess of criminal operations. If they are to benefit from the proceeds of their activities, thoseinvolved need to exploit the facilities of the world’s financial institutions. The increased integration ofthe world’s financial systems and the removal of barriers to the free movement of capital, haveenhanced the ease with which proceeds of crime can be laundered and have complicated the tracingprocess.3.1.3 There is no one single method of laundering money. Methods can range from the purchase and resaleof a luxury item (e.g. cars or jewellery) to passing money through a complex international web oflegitimate businesses and “shell” companies. Initially, however, in the case of drug trafficking andother specified offences enforceable under POCA 1 , the proceeds usually take the form of cash whichneeds to enter the financial system.1 Specified offences are defined in POCA.Page 2 of 75
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