The Turks and Caicos Islands ("TCI") are a British Overseas Territory. The territory´s legal system is based on English common law supplemented by local statutes.

The Government of the Turks and Caicos Islands is fully committed to meeting its international obligations with regard to sanction orders and in particular, denying criminals and terrorist groups and organisations access to the financial system.

  • The Islands are a member of the Caribbean Financial Action Task Force (CFATF) which is itself an observer member of the Financial Action Task Force (FATF). The CFATF is a regional body with similar form and function to the FATF.
  • TCI is a member of Egmont via the operational unit, Financial Crime Unit (FCU) of the Royal Turks and Caicos Islands Police Force.
  • TCI is an associate member of the Caribbean Community (CARICOM) and maintains an Interpol sub-bureau

The TCI Financial Services Commission (FSC) is an independent statutory body tasked with supervising the financial services sector. The FSC conducts on-site and off-site examinations to determine compliance with TCI laws and regulations, and has the ability to issue sanctions for noncompliance. The FSC subscribes to a risk based approach, and requires financial institutions to adopt this approach by implementing regulations and guidelines into their internal controls and procedures.

Legislation on Prevention of Money Laundering Activities

There are two anti-money laundering regimes in place in the Turks and Caicos Islands:

  • 1. The general anti-money laundering regime contained in:
    • The Proceeds of Crime Ordinance 2007("POCO 2007");
    • The Anti-Money Laundering Regulations 2007 ("the Regulations");
    • The Anti-Money Laundering and Prevention of Terrorist Financing Code (the "Code").

  • 2. The anti-terrorist funding regime established by the U.K. Government contained in:
    • The United Kingdom Terrorism (United Nations Measures) (Overseas Territories) Order 2001;
    • The Al-Qa’ida and Taliban (United Nations Measures) (Overseas Territories) Order 2002; and
    • The Anti-Terrorism (Financial and Other Measures) (Overseas Territories) Order 2002.

Terrorism (UN Measures) (Overseas Territories) Order 2001

The order prohibits fundraising for terrorism purposes and restricts the making available of funds and financial services to terrorists, and provides powers to freeze accounts of suspected terrorists.

Al Qa’ida and Taliban (United Nations Measures) Order 2002 ("UNMO")

The UNMO was introduced in January 2002. to replace an earlier order (The Terrorism (UN Measures) (Overseas Territories) Order) which gave effect to certain United Nations resolutions requiring all Member States and inter alios British Citizens and British Dependant Territories Citizens to prohibit the making of funds available to Usama bin Laden, Al Qa’ida, the Taliban and their designated associates. Put broadly in relation to money laundering, the UNMO makes it a criminal offence for a relevant citizen to make funds available to or for the benefit of a “listed person”. HM Treasury has authority to issue a direction to freeze funds held on behalf of a listed person.

Anti-Terrorism (Financial and other Measures) (Overseas Territories) Order 2002 ("ATO")

The ATO is intended to stop or disrupt the financing of terrorism. It creates an equivalent anti-terrorism funding regime in certain Overseas Territories, including the TCI, to that established in the United Kingdom. Under ATO, a money laundering offence is committed where a person enters into, or becomes concerned with, an arrangement, which facilitates the retention or control by on behalf of another of terrorist property by concealment; by removal from the jurisdiction; by transfer to nominees; or in any other way (Article 9).

Proceeds of Crime Ordinance 2007

POCO 2007 criminalizes money laundering, provides for the confiscation of the proceeds of crime, permits civil forfeiture, enhances the powers of the Money Laundering Reporting Authority (“MLRA”), requires financial institutions to report suspicious activity to the MLRA, and gives the Supreme Court the power to make a number of orders to assist the police in money laundering investigations.

(The MLRA was established under POCO 2007, comprising, as members, the Attorney General, Collector of Customers, Managing Director of the Financial Service Commission, Commissioner of Police and the Head of Financial Crime.)

POCO 2007 creates three specific money laundering offences and three related offences summarized below:

  • Concealing (etc.) criminal property
    This offence, under section 117, is committed by a person who conceals, disguises, converts, transfers or removes criminal property from the Turks and Caicos Islands.

    A person found guilty of this offence is liable to imprisonment for up to 14 years and/or an unlimited fine.

  • Arrangements facilitating the acquisition (etc.) of criminal property
    This offence, under section 118, may be committed by a person who enters into, or becomes concerned with an arrangement which he knows or suspects facilitates the acquisition, retention, use or control of criminal property by or on behalf of another person.

    A person found guilty of this offence is liable to imprisonment for up to 14 years and/or an unlimited fine.

  • Acquisition, use and possession of criminal property
    It is an offence under section 119 for someone to acquire, use or have possession of criminal property.

    A person found guilty of this offence is liable to imprisonment for up to 14 years and/or an unlimited fine.

  • Duty to disclose knowledge or suspicion of money laundering
    A person commits an offence under section 120 where, in the course of his business, he knows or suspects that another person is engaged in money laundering, and fails to make the required disclosure to the Money Laundering Reporting Officer (“MLRO”) or the MLRA as soon as reasonably practicable.

    A person found guilty of this offence is liable to imprisonment for up to 5 years and/or an unlimited fine.

  • Duty of Money Laundering Reporting Officer (MLRO) to disclose knowledge or suspicion of money laundering
    This offence, under section 121, relates to the MLRO of a regulated business who receives a report internally and fails to make a report to the MLRA.

    A person found guilty of this offence is liable to imprisonment for up to 5 years and/or an unlimited fine.

  • Prejudicing an investigation and tipping off
    A person commits offence under section 123(1) where, knowing or suspecting that the Reporting Authority or proposing to act in connection with a criminal recovery investigation, a civil recovery investigation or money laundering investigation, he makes a disclosure which is likely to prejudice such an investigation or conceals or destroys documents which are relevant to such an investigation.

    A person commits an offence under section 123 (2) where, knowing or suspecting that a disclosure has been made to his MLRO and/or the MLRA, he makes a disclosure which is likely to prejudice a future investigation.

    A person found guilty of this offence is liable to imprisonment for up to 5 years and/or an unlimited fine.

The Anti-Money Laundering Regulations 2007

The Regulations were introduced on 29th November 2007. The Regulations are designed to help guard the TCI financial system against money laundering activity.

The Regulations are principally concerned with the establishment of systems and mechanisms for the prevention and detection of money laundering within the meaning of POCO 2007 (sections 115-124).

Under regulation 4, a person carrying on relevant business shall not form a business relationship or engage in a one off transaction with another unless certain procedures are in force and are followed, namely:

  • a) Identification (regulations 1-6);
  • b) Record-keeping (regulation 7);
  • c) Internal reporting (regulation 8); and
  • d) Training for employees (regulations 9);

Regulation 8 requires that a "relevant business" appoint a fit and proper person approved by the FSC as its MLRO. The regulation further provides for the establishment of internal controls and reporting procedures via proper training for employees.

A wide variety of financial activities are included in the term “relevant business”, including but not limited to: banking, investment dealing and advice, insurance agency, lending, the business of a licensed trustee, mutual fund management, attorneys in relation to financial and land transactions, accountants, realtors and retailers of gold, jewels and high value items.

The Anti-Money Laundering and Prevention of Terrorist Financing Code (the “Code”)

The Code was issued by the FSC on behalf of the MLRA on 3rd December 2007 under section 111(1) of POCO 2007. The Code contains guidance and requirements concerning compliance with POCO 2007, the AML Regulation and the Code itself. The Code also sets out requirements concerning the prevention of terrorist financing.

The Code is fully enforceable by the FSC against "regulated persons", enabling the FSC to revoke licences or to take other regulatory or enforcement action. A failure to comply with the identification provisions of the Code is a breach of Regulation 4 of the Regulations and is an offence under the Regulations.

The Code also contains guidance which leaves its implementation to the discretion of the financial business concerned, given the particular circumstances of its business, products, services, transactions and customer base. The aim of the Code is to move away from the box ticking approach of the previous Guidelines to a more proportionate, risk-based approach to the operation of due diligence procedures with the objective of preventing money laundering and terrorist financing.

Misick & Stanbrook’s Anti -Money Laundering Policy

Although Misick & Stanbrook is not a "regulated business", its supply of legal services which involve participation in a financial or real estate transaction (whether by assisting in the planning or execution of any such transaction), are considered “relevant business” under the Regulations, therefore the Firm is required to ask for complete due diligence from its clients prior to providing such legal services.

Misick & Stanbrook understands the importance of knowing our clients and has taken proactive steps to comply with these aforementioned laws and has recently hired a Compliance Officer to establish and maintain an AML/CFT Programme.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.