│ 1 Anti-money laundering and counter-terrorist financing measures The Turks and Caicos Islands Mutual Evaluation Report January 2020 Mutual Evaluation Report of the Turks and Caicos Islands 2 │ Table of Contents Executive Summary ...................................................................................................................................................... 6 Key Findings ............................................................................................................................................................... 6 Risks and General Situation ........................................................................................................................................ 9 Overall Level of Compliance and Effectiveness ......................................................................................................... 9 Assessment of risk, coordination and policy setting ............................................................................................. 10 Financial intelligence, ML investigations, prosecutions and confiscation.......................................................... 10 Terrorist and proliferation financing .................................................................................................................... 11 Preventive measures ................................................................................................................................................ 12 Supervision .............................................................................................................................................................. 13 Transparency and beneficial ownership ............................................................................................................... 14 International cooperation ....................................................................................................................................... 15 Priority Actions ......................................................................................................................................................... 15 Effectiveness & Technical Compliance Ratings ....................................................................................................... 17 Effectiveness Ratings ................................................................................................................................................ 17 Technical Compliance Ratings.................................................................................................................................. 17 MUTUAL EVALUATION REPORT ....................................................................................................................... 18 Preface ....................................................................................................................................................................... 18 1. ML/TF RISKS AND CONTEXT .......................................................................................................................... 20 ML/TF Risks and Scoping of Higher Risk Issues ..................................................................................................... 20 1.1.1. Overview of ML/TF Risks .......................................................................................................................... 20 1.1.2. Country’s Risk Assessment & Scoping of Higher Risk Issues ................................................................... 21 Materiality ................................................................................................................................................................. 24 Structural Elements ................................................................................................................................................... 25 Background and Other Contextual Factors ............................................................................................................... 25 1.1.3. AML/CFT strategy ...................................................................................................................................... 25 1.1.4. Legal & institutional framework ................................................................................................................. 25 1.1.5. Financial sector and DNFBPs ...................................................................................................................... 27 1.1.6. Preventive measures .................................................................................................................................... 30 1.1.7. Legal persons and arrangements .................................................................................................................. 31 1.1.8. Supervisory arrangements ........................................................................................................................... 32 1.1.9. International cooperation ............................................................................................................................. 32 2. NATIONAL AML/CFT POLICIES AND COORDINATION .......................................................................... 34 Key Findings and Recommended Actions ................................................................................................................ 34 Immediate Outcome 1 (Risk, Policy and Coordination) ........................................................................................... 35 2.1.1. Country’s understanding of its ML/TF risks ............................................................................................... 35 2.1.2. National policies to address identified ML/TF risks ................................................................................... 40 2.1.3. Exemptions, enhanced and simplified measures ......................................................................................... 41 2.1.4. Objectives and activities of competent authorities ...................................................................................... 42 2.1.5. National coordination and cooperation ........................................................................................................ 43 2.1.6. Private sector’s awareness of risks .............................................................................................................. 44 3. LEGAL SYSTEM AND OPERATIONAL ISSUES ............................................................................................ 46 Key Findings and Recommended Actions ................................................................................................................ 46 Mutual Evaluation Report of the Turks and Caicos Islands │ 3 Immediate Outcome 6 (Financial Intelligence ML/TF) ............................................................................................ 50 3.1.1. Use of financial intelligence and other information .................................................................................... 50 3.1.2. Access and use of financial intelligence and relevant information ............................................................. 54 3.1.3. STRs received and requested by competent authorities .............................................................................. 56 3.1.4. Operational needs supported by FIU analysis and dissemination ............................................................... 59 (a) Operational Analysis ................................................................................................................................. 59 (b) Disseminations .......................................................................................................................................... 62 (c) Strategic Analysis ..................................................................................................................................... 64 3.1.5. Cooperation and exchange of information/financial intelligence ................................................................ 65 Immediate Outcome 7 (ML investigation and prosecution) ..................................................................................... 66 3.1.6. ML identification and investigation............................................................................................................. 66 3.1.7. Parallel Financial Investigations .................................................................................................................. 69 3.1.8. Consistency of ML investigations and prosecutions with threats and risk profile ...................................... 73 3.1.9. Types of ML cases pursued ......................................................................................................................... 74 3.1.10. Effectiveness, proportionality and dissuasiveness of sanctions ................................................................. 76 3.1.11. Use of alternative measures ....................................................................................................................... 77 Immediate Outcome 8 (Confiscation) ....................................................................................................................... 78 3.1.12. Confiscation of proceeds, instrumentalities and property of equivalent value as a policy objective ........ 78 3.1.13. Restraint Orders/ Freezing Orders ............................................................................................................