FID ADVISORY TO FINANCIAL INSTITUTIONS

FIDADVISORYTOFINANCIALINSTITUTIONS

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PURPOSE This Advisory is being issued in accordance with the provisions of Sec 5(2) (c) of the Financial Investigations Division (FID) Act. This section requires the FID, after consultation with the competent authority to provide guidance to financial institutions and designated non‐financial institutions regarding their obligations under this Act or any other enactment. The Proceeds of Crime (Money Laundering Prevention) Regulations, 2007 section 2(3) and the Terrorism Prevention (Reporting Entities) Regulations, 2010 also state that “In determining whether a person has complied with any of the requirements of these regulations, a court shall take account of any relevant guidance that was at the time concerned:‐

(a) issued by the designated authority or a body that regulates, or is representative of, any trade profession, business or employment concerned;

(b) approved by the Minister; and (c) published in the Gazette.”

This advisory should be read in conjunction with the relevant legislations and replaces all other advisories previously issued by the FID. 1. LEGISLATIVE FRAMEWORK The Proceeds of Crime Act (POCA) and Regulations 2007 and POCA Amendments 2013 The Terrorism Prevention Act, 2005 (TPA) and Amendments 2011, 2012, and 2013 The Terrorism Prevention (Reporting Entities) Regulations, 2010 The Financial Investigations Division Act, 2010 and Amendments 2013 The United Nations Security Council Resolutions Implementation Act, 2013 (UN Act) 2. DESIGNATED AUTHORITY (DA) The Chief Technical Director of the Financial Investigations Division (FID), Ministry of Finance and Planning was named the Designated Authority to receive reports as per sec 91(1) (h) of POCA, Sec 15(1) of TPA and Sec 5(1) of the UN Act:

a) Suspicious Transaction Report (POCA Sec 94 & 95) b) Threshold Transactions Report (POCA MLP Regulations section 3) c) Authorized Disclosure (POCA Sec 100(4)) d) Report of International Transportation of Currency or Bearer Negotiable Instruments

(POCA Section 101); e) Suspicious Transaction Report (TPA Sec 16) f) Listed Entity Report (TPA Sec (15)(3)) g) UN Security Council Proscribed Person or Entity Report (UN Act Sec 5(3))


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3. COMPETENT AUTHORITY

This is an entity or authority as per POCA Sec 91(g), TPA Sec 18(5) and FIDA Sec 2, authorized by the Minister to monitor compliance and issue guidelines to businesses in the regulated sector.

For financial institutions, the competent authorities are:

a. The Bank of Jamaica b. The Financial Services Commission

4. REPORTING REQUIREMENTS OF FINANCIAL INSTITUTIONS UNDER POCA AND

TPA1

4.1 Who Must Report Reports must be submitted by businesses in the regulated sector defined as ‐

Financial institutions: ‐ a) A bank licensed under the Banking Act;

b) A financial institution licensed under the Financial Institutions Act;

c) A bu i l d i ng society registered under the Building Societies Act;

d) A credit union registered under the Co‐operative Societies Act;

e) A person who:

I. Engages in insurance business within the meaning of the Insurance Act;

II. Performs services as an insurance intermediary within the meaning of the Insurance

Act, but does not include an insurance consultant or an adjuster;*

f) A person licensed under the Bank of Jamaica Act to operate an exchange bureau;

g) A person licensed under the Securities Act as a dealer or investment adviser;

h) Approved money transfer & remittance agents & agencies as defined by section 2 of the

Bank of Jamaica Act.

i) Any other person/entity declared by the Minister responsible for national security (POCA)

or Minister of Foreign Affairs (TPA), by order subject to affirmative resolution. *There is no requirement for insurance brokers or agents to submit reports under TPA. However, foreign companies in respect of their business in Jamaica relating to banking, securities, insurance, investment advice or trusts also have a duty to report.

1 The reporting requirements under the UN Act cannot be effected until the passage of the regulations.


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Designated Non‐Financial Institutions:‐ a) A person who is not primarily engaged in carrying on financial business; and

b) A person who is designated as a non‐financial institution for the purpose of POCA by

the Minister of National Security by order subject to affirmative resolution. The following persons have been designated as non‐financial institutions with designated Competent Authorities being:

DNFI Competent Authority

Accountants Public Accountancy Board

Real Estate Dealers Real Estate Board

Casinos Casino Gaming Commission

Gaming Lounges Betting, Gaming & Lotteries Commission

Attorneys General Legal Council

The POCA (Designated Financial Institutions) Orders are to take effect on April 1, 2014 except for attorneys which take effect on June 1, 2014. A separate Advisory directed to DNFIs will be issued. 4.2 Mandatory Reports 4.2.1 Reports to be submitted under POCA

Threshold Transaction Report (TTR) Nil Report (using the TTR form) Suspicious Transaction Report (STR) Authorized Disclosure and Request for Consent Report of International Transportation of Currency or Bearer Negotiable Instruments

Threshold Transaction Report (TTR) Regulation 3 (1) of the Proceeds of Crime ( Money Laundering Prevention) Regulations requires a financial institution to make a report to the Designated Authority, either on its own initiative or in response to a request made to it by the Designated Authority in relation to any cash transaction involving the prescribed amount. Prescribed amount for:

1. a money transfer and remittance agent or agency is five thousand dollars ($5,000) or more;

2. cambio or exchange bureau is eight thousand dollars ($8,000) or more; 3. any other financial institution, fifteen thousand dollars ($15,000) or more; in the currency of the United States of America or its equivalent in any other currency.


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A TTR must be completed for cash transaction(s) amounting to or exceeding the prescribed amount, which took place in any one business day. A cash transaction is defined as a transaction involving the physical transfer of currency from one person to another. (Reg.3 (8)). “Currency” refers to the coin and paper money designated as the legal tender of any country and which circulates and is customarily used and accepted as a medium of exchange in the country of issue ‐ POCA Regulation 3 (9) Multiple transactions within the same business day may be reported on a single TTR form using the multiple transaction feature if the transactions involve the same customer.

NIL Reports If there is no transaction at the prescribed amount to report then a Nil Report should be submitted to the Designated Authority for any given reporting period. The Nil report should be made using the Threshold Transaction Report form.

Suspicious Transaction Reports (STRs) Financial Institutions are required to report suspicious transactions under POCA. POCA refers to Suspicious Transaction Reports as “required disclosures”. A person in the regulated sector is to make the required disclosure (STR) if:

(a) that person knows or believes, or has reasonable grounds for knowing or believing, that another person has engaged in a transaction that could constitute or be related to money laundering; (Section 94, 2a)

(b) the information or matter on which the knowledge or belief is based or which gives reasonable grounds for such knowledge or belief, came to him in the course of a business in the regulated sector. (Section 94, 2b)


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Authorized Disclosure An authorized Disclosure under Section 100(4) is a report to an authorized or nominated officer of information or other matter that causes the person making the report to know or believe, or to have reasonable grounds for knowing or believing that property is criminal property;

The disclosure (report) should be made before doing the prohibited act, for which the consent of the DA is required. However, a disclosure may be made after doing the prohibited act where the person has a reasonable excuse for not making the disclosure before doing the act and has voluntarily made the report as soon is reasonably practicable for him to make it. Authorized Disclosures after doing the prohibited act is a remedy provided only to persons in the unregulated sector, since persons in the regulated sector must submit required disclosures (Suspicious Transaction Reports) as per Sec 94‐95 of POCA.

A report made under Sec 100(4) is protected if:

a) the information or other matter disclosed came to the person making the disclosure in the course of that person’s trade, profession, business or employment;

b) the information or other matter causes the person making the disclosure to know or believe, or to have reasonable grounds for knowing or believing, that another person has engaged in money laundering; and

c) the disclosure is made to an authorized officer or nominated officer as soon as is reasonably practicable.

4.2.2 Reports to be submitted under TPA

Listed Entities Report (LER) Sec 15 Suspicious Transaction Reports (STR) Sec 16

Listed Entities Report (LER) Every regulated entity is required to report to the DA once in every four (4) calendar months, or in response to a request made to it by the DA, whether or not it is in possession or control of any property owned or controlled by or on behalf of a listed entity.


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A listed entity is a person on a Listed Entity Order, which has been approved by a judge of the Supreme Court and caused to be published by the Director of Public Prosecutions (DPP) in a national newspaper.

For a Listed Entity Oder to become effected, the DPP as required by Sec 14 of TPA shall apply to a Judge of the Supreme Court in respect of an entity, if:

the entity is included on a list of entities designated as terrorist entities by the United

Nations Security Council; or

the DPP has reasonable grounds to believe that the entity has knowingly committed or participated in the commission of a terrorism offence or is knowingly acting on behalf of, at the direction of, or in association with a terrorist entity.

Suspicious Transaction Reports (STR) ‐TPA Each reporting entity is required to submit to the DA, all transactions, whether completed or not, which the reporting entity suspects, or has reasonable cause to suspect:

involve property connected with, or intended to be used in, the commission of a

terrorist offence or involve, or are for the benefit of, any listed entity or terrorist group.

4.3 Appointment of Nominated Officer All financial institutions are required to appoint a Nominated Officer through whom reports are to be submitted to the Designated Authority. The Nominated Officer must be an officer of the business who performs management functions and who is responsible for ensuring the implementation of the programmes, policies, procedures and controls as is legally required. 4.4 Prescribed Forms

POCA Form I Suspicious Transaction Report

Form II Threshold Transaction Report

Form III Authorized Disclosure & Request for Consent

CBR Report of International Transportation of Currency or Bearer Negotiable Instrument (Cross Border Report)


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TPA Form 1 Listed Entity Report

Form II Suspicious Transaction Report Copies of these forms are attached These forms must be typed or printed. The only part of the prescribed form that should be handwritten is the section that makes provision for the signature of the preparer of the form. 4.5 Other Reporting Requirements 4.5.1 Unique Reference Number Each report must be assigned a unique reference number. The format should be YYYYMMDD/ABC/00001 representing: YYYYMMDD Date of the report ABC An acronym for the reporting institution 00001 Consecutive numbering of reports submitted. First report for the year

should end with the number 00001; succeeding reports assigned consecutive numbers 00002, 00003 etc.

For reports submitted under TPA add TPA at the end of the number, for instance YYYYMMDD/ABC/00001/TPA. TPA reports must have their own numbering sequence. 4.5.2 Entities within a Group Each entity/licensee that is defined as a financial institution within a corporate group should report separately. In the Remittance/Money Transfer Sector, the Primary Agents are responsible for reporting to the DA all reportable transactions conducted by their agents.


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4.5.3 Cover Letter A cover letter on the repor t ing ent i ty ’ s l e t te rhead listing the reports being forwarded to the DA should accompany all submissions of reports. For large submissions a summary sheet can be attached to the cover letter by way of an appendix. The cover letter should be submitted in duplicate, requesting that the copy be signed and returned as acknowledgement of receipt. The cover letter should indicate the reporting period and the number of reports being submitted.

The cover letter or summary sheet should also provide the following information:

Name of customer Date of transaction Transaction Amount Unique Reference Number

Acknowledged cover letters should be retained by the reporting entity as proof of submission for their regulator’s inspection.

4.5.4 Submitting Reports On CD/DVD Some financial institutions based on defined parameters have been instructed to submit reports on CD or DVD. For these electronic submissions, certain requirements have been implemented to protect and safeguard the data. To achieve this, each institution has to submit the reports with an encryption and hash code. The encryption code should be physically and confidentially delivered to the FID preferably by the Nominated Officer or his/her representative. This code will be changed at least once per year by the financial institution. The HASH code, which will change if there are any changes in the content of the data, can be indicated in the accompanying cover letter. A cover letter and a summary sheet should accompany each filing of reports. The summary sheet should contain the following information:

Unique Reference Number

Customer Name (Last name and first name in separate columns. If customer is a company, insert company’s name in “Last Name” column)

Transaction Date

Transaction Type

Transaction Amount

Transaction Currency

USD Equivalent


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Each page of the summary sheet is to be numbered, dated and signed by the Nominated Officer. This is an indication that the information so contained on the CD/DVD is being provided with the full knowledge of the Nominated Officer. 4.6 Required Submission Dates

POCA Threshold Transaction Reports

No Quarter Due Date is on or before

1 January – March April 30

2 April – June July 31

3 July – September October 31

4 October – December January 31

These submission dates will be revised with the introduction of online reporting. Suspicious Transaction Reports (Required Disclosures) Suspicious Transaction Reports are to be made to the nominated officer or Designated Authority as soon as is reasonably practicable and in any event within fifteen days after the information or other matter came to the person in the regulated sector. The nominated officer should report to the designated authority as soon as is reasonably practicable and in any event within fifteen days after the information or other matter came to him.

TPA Listed Entities Report

No Four Months Period Due Date is on or before

1 January – April May 31

2 May ‐ August September 30

3 September ‐ December January 31


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Suspicious Transaction Reports (TPA) Suspicious transactions are to be reported promptly and in any event within fifteen (15) days after the suspicion or reasonable cause for suspicion arises.

Where the due date for submission of any of these reports is on a weekend or a public holiday, then reports may be submitted on the first business day following the mandated date. 4.7 Where to Send Reports Reports must be sent in sealed envelopes/ packages stamped “Confidential” and addressed to:

The Designated Authority The Chief Technical Director Financial Investigations Division, Ministry of Finance & Planning, 1 Shalimar Avenue, Kingston 3.

It is very important that Reporting Entities ensure that packages and letters sent to the Designated Authority are properly addressed. Failure to do so may result in unauthorized disclosures.

4.8 Online Reporting POCA (MLP) Regulation 17 allows the DA to amend Forms 1 and 2 and also to allow for these reports to be submitted in an electronic format. Online reporting will be mandatory when implemented. For effectiveness and completeness, the TTR and STR form should be completed with all applicable information. There will be some compulsory fields on the forms and therefore the reports will be rejected if the following information is not provided:

1. Reporting Financial Institution Information

2. Name & Telephone number for Nominated Officer (or his designate)

3. Full Name of Customer 4. TRN (or other national registration no.) 5. Address of Customer 6. Date of Birth of Customer 7. Identification Information 8. Name of Person conducting

Transaction (Agent) 9. Transaction Type 10. Transaction Date/Period 11. Transaction Currency 12. Transaction Amount 13. Jamaican Dollar Equivalent 14. USD Equivalent 15. Reasons for Suspicion (For STRs)


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5. EXEMPTIONS FROM THRESHOLD TRANSACTION REPORTING REQUIREMENTS 5.1 Institutions that are Exempt Regulation 3 (2) of the POCA (MLP) Regulations lists the following institutions that are exempt from threshold reporting requirements:

(a) a ministry, department or agency of government;

(b) a statutory body or authority;

(c) a company registered under the Companies Act, in which the Government or an

agency of the Government, whether by the holding of shares or by other financial

input, is in a position to influence the policy of the company;

(d) any Embassy, High Commission, Consular Office or organization to which the

Diplomatic Immunities and Privileges Act applies; or

(e) any organization in relation to which an order is made under section 3(2) of the

Technical Assistance (Immunities and Privileges) Act.

5.2 Businesses for which Exemption can be Requested

Regulation 4 of POCA allows a financial institution to apply in writing to the Minister of Finance (or his designate) for exemption from the requirements of regulation 3 (reporting of threshold transaction reports) for a person who has been a customer of the financial institution for at least 12 months. The Minister may grant this exemption on the following basis: The transaction or series of transactions consists of a deposit or withdrawal on an

account maintained by that customer with the financial institution, The customer carries on either:

a retail business (other than a business that includes the selling of vehicles, vessels, farm machinery or aircraft), or

a business declared by the Minister to be an entertainment business or a hospitality business

The account through which the transaction(s) is conducted is maintained for the

purposes of any such business, and The amount of cash involved in the transaction(s) does not exceed an amount that is

reasonably commensurate with the lawful business activities of the customer. EXEMPT INSTITUTIONS ARE NOT EXCLUDED FROM THE SUSPICIOUS TRANSACTION REPORTING REGIME.


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6. REQUEST FOR ADDITIONAL INFORMATION

The designated authority under regulation 3(6) of POCA can direct a regulated business that has filed a TTR, or a STR under section 94 or 95 of the Act to provide information as to:

Previous or current reports,

The provision of information required in such reports, and

The provision of additional information in relation to queries concerning specific matters arising from the reports, including:

o Due diligence procedures followed in relation to a specific transaction

o Persons authorized to sign on the account in question

o Errors identified in the reports, and

o Such other matters as may be specified in the directions.

7. UNAUTHORISED DISCLOSURES & TIPPING OFF PROVISIONS

A financial institution that makes a report under Regulation 3(1) of POCA to the designated authority shall not disclose the existence of that report to any other person except the competent authority. POCA (MLP) Regulations 3(4)

Under POCA section 97 (1), a person commits an offence if:

Knowing or having reasonable grounds to believe that a disclosure falling within section 100 has been made, he makes a disclosure which is likely to prejudice any investigation that might be conducted, or

Knowing or having reasonable grounds to believe that the enforcing authority is acting or proposing to act in connection with a money laundering investigation which is being, or about to be conducted, he discloses information or any other matter relating to the investigation to any other person.

No offence is committed if the disclosure is made to an attorney‐at‐law for the purpose of obtaining legal advice, to the competent authority or is made in carrying out a function that the person has in enforcing a provision of this Act or other enactment relating to criminal conduct.


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8. REQUIREMENTS INVOLVING ELECTRONIC FUNDS TRANSFERS

Every regulated business conducting wire transfers or any other electronic funds transfer shall ensure that it receives and includes in its records accurate and relevant information on funds transfers throughout the payment process and chain. This should include the correct name, address and account number (if any), of the persons involved, the reference number assigned to the transaction, any other relevant reference numbers and the instructions given in relation to the transfer.

For transfers of an amount exceeding one thousand dollars in the currency of the United States of America or its equivalent in any other currency, the relevant information shall include:

a national identification number

the customer identification number; or

the date and place of birth

The above information is required for the person who placed the order and for the holder of the account from which the funds are transferred.

There is no requirement to file threshold transaction reports on electronic funds transfers except for money transfers payments through remittance agencies.

9. CONSENT MATTERS

Where a financial institution has knowledge or reasonable grounds to believe that the funds involved in a transaction are criminal property, the financial institution must obtain the appropriate consent of the DA before doing that transaction or otherwise decline to proceed with the transaction. Failing this, the financial institution may be liable for engaging in a prohibited act.

A prohibited act is defined as a money laundering offence under sections 92 and 93 of POCA.

9.1 How to Request Consent

Consent should be requested through the completion and submission of an authorized disclosure (Form 111), to the FID.


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9.2 Proceeding with Transactions after Consent has been Requested

The Nominated Officer may give the appropriate consent to the doing of a prohibited act in instances where the Officer had made a disclosure to the DA that property is suspected criminal property and any of the following occurs:

The designated authority gives consent to the transaction

Having made the report, seven (7) working days have passed and the Nominated Officer has not received a response from the DA, or

The Nominated Officer receives a response before the seven (7) working days have elapsed that consent was refused, but ten (10) days have passed since the receipt of that refusal notice without any subsequent judicial action.

Where an urgent response to a consent request is required, the DA is permitted to provide a verbal notice of his consent or refusal. The financial institution must still submit an authorized disclosure (Form III) to the DA but this can be faxed or sent by electronic mail. A written notice (confirmation) shall be sent by the DA within five (5) days of that verbal response to the Nominated Officer.

9.3 Future Requests for Consent for Same Customer

Where the customer continues to conduct other similar transactions that are believed to involve criminal property, the financial institution is required to seek consent for each prohibited act. However, it is not necessary to seek the consent of the DA to conduct another type of transaction with that customer where the funds involved appear to be from a legitimate source.

The designated authority will not provide a general “blanket” consent to the conduct of all future transactions with a particular customer. The requirement for consent is in relation to a particular activity or transaction.

Nonetheless, where a financial institution becomes concerned about the lawfulness of all the funds in a customer’s account, subsequent to its receipt, any future action on that account would necessitate the consent of the DA.


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9.4 Requests for Consent to Close an Account

A decision to close an account is entirely a commercial one, informed by the financial institution’s assessment of the money laundering risk posed to it by that customer. The contract between the financial institution and the customer should permit the financial institution, on its own initiative, to close a customer’s account.

However, where a financial institution chooses to take such action, this would result in the withdrawal and consequential payment to the customer of all the funds in the closed account. As such, since this withdrawal would be a transaction on the account it may constitute a prohibited act. In this case, the consent of the DA to proceed with the withdrawal of all the funds in the account must first be obtained.

Where financial institutions require consent from the DA to pay‐out all the funds in an account, the balance in the account should be stated in the request.

9.5 Communicating with Customers during the Consent Period

In corresponding with the customer, the financial institution must be conscious of the tipping off provisions and unauthorized disclosures under POCA. Therefore, the financial institution cannot tell the customer:

a) During the notice period (seven working days), that the transaction is being delayed because it is awaiting consent from the designated authority,

b) During the 10‐day moratorium period, that consent was refused by the designated authority,

c) At a later date, that the transaction was delayed because the consent of the designated authority was being sought or

d) That law enforcement is conducting an investigation.

A financial institution can tell its customers that it is carrying out its required due diligence checks and procedures to comply with all applicable laws and its own internal procedures. It may be useful for financial institutions to make customers aware in their contracts that transactions may sometimes be delayed or refused because of their obligations under the governing statutes. This would provide an explanation for the delay in processing a transaction without violating the tipping‐off provisions.


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10. LIMIT ON CASH TRANSACTIONS

With the passage of the Proceeds of Crime (Amendment) Act in October 2013, Section 101(A) imposes a threshold of one million Jamaican dollars (or its equivalent in any other currency) on cash transactions for the purchase of any goods or services or for the payment or reduction of any indebtedness, accounts payable or other financial obligation unless the transaction is done with a permitted or exempted person. Where cash transactions relate to a single activity or a series of activities but are artificially reduced so that each falls below the prescribed amount but the aggregate would have exceeded the prescribed amount, this would constitute a breach of this provision.

Permitted persons are:

A bank licensed under the Banking Act,

A licensed deposit‐taking institution that is regulated by the Bank of Jamaica

A person licensed under the Bank of Jamaica Act to operate an exchange bureau and

Any other person that the Minister may, by order subject to affirmative resolution, prescribe.

Currently, the following financial institutions are not permitted persons:

Credit Unions

Insurance Companies, Brokers or Agents

Securities Dealers

Remittance Agencies

An exempted person or exempted transaction is a person or transaction in relation to which the Minister has made an order to be exempted from the provisions of Section 101A. Currently, there is no exempted person or exempted transaction.


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11. TREATMENT OF UNUSUAL TRANSACTIONS

POCA (Amendment) 2013 Section 94 requires businesses in the regulated sector, in relation to each customer, to maintain a record for at least seven years or as directed by the supervisory authority of all:

Complex, unusual or large business transactions carried out by that customer, and

Unusual patterns of transactions, whether completed or not, which appear to be inconsistent with the normal transactions carried out by that customer with the business.

The regulated business is also required to pay special attention to all business relationships and transactions with any customer resident or domiciled in a territory specified in a list of applicable territories published by notice in the Gazette by a supervisory authority so as to ensure that the background and purposes of all such relationships and transactions are examined.

The findings of this review should be in writing in accordance with procedures set out in the regulations and made available, upon request, to the designated authority, a supervisory authority or the competent authority concerned.


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12. SOME INDICATORS OF SUSPICIOUS TRANSACTIONS

The following typologies have been developed to assist financial institutions in detecting and identifying suspicious transactions:

Current & Emerging Threats Indicators

Advanced Fee Scam (includes lottery, loan, investment scams)

Multiple remittances in same month Multiple senders to one recipient One sender to multiple recipients Elderly senders Relatively young recipients Large & frequent wire transfers Large cash withdrawals & POS transactions Inadequate source of fund information Purpose for which funds are said to be sent not credible Asset acquisition not supported by income Sometimes recipient not real beneficiary, funds passed

to third party

Micro finance loan services (same/pay day loans)

Capital outlay not known or doubtful origin Usually provide cash loans to customers Most repayments by salary deductions – integration

phase Registered owners fronting for others Sector mushrooming Currently unregulated – principals not subject to fit &

proper tests Commingling of funds

Use of Professionals (Lawyers, Accountants, Car Dealers, Real Estate Agents)

Large & frequent cash deposits (mostly USD) Claims that funds being deposited belong to clients Clients not identified Clients’ accounts improperly managed Large wire transfer credits and/or debits Inadequate source of funds information Source of funds information not substantiated Funds being deposited to personal accounts instead of

business or client account


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Current & Emerging Threats Indicators

Illegal Cambio Operations Frequent FX sales /deposits unrelated to legitimate business activities

Existing cash based business (supermarket, wholesale, hardware etc.)

Multiple currencies involved in transaction Inadequate source of funds information Normally Sole Proprietor Value of deposits exceed business income

Use of Cash Based Businesses (Wholesales, Supermarkets, Petrol Stations, Hardware Merchants, Clothing Stores, and Beauty Shops etc.)

Commingling of business funds with tainted money Deposits in excess of expected income Cheque disbursements to unconnected parties Mismatch of net worth of owners with funds passing

through accounts Funds being deposited to personal instead of business

accounts Large cash deposits to investment, credit union or

building society accounts Multiple accounts at different financial institutions being

used simultaneously Frequent deposits through ATMs Deposits of foreign currencies in excess of what business

is expected to generate

Gaming Rooms Large cash deposits (mostly USD) Deposits greater than expected or declared income Obscure ownership arrangements Not captured under the Casino Gaming Act Large wire transfer credits and debits

Over‐Utilisation of Credit Facilities (Loans, Credit Cards etc.)

Frequent loans that are repaid within weeks or months Cheque disbursement for loans but cash repayments Transactions not conforming to rational business

decisions Funds available in account – no basis for loan Frequent overpayments on credit cards


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13. JUDICIAL ORDERS

There are several judicial orders available under POCA, FIDA and TPA to aid investigators in obtaining information from financial institutions in furtherance of financial crime investigations. They are:

POCA FIDA TPA

Customer Information Order Production and Inspection Order

Examination and Production Order

Disclosure Order Account Monitoring Order Monitoring Order

Account Monitoring Order Restraint Order Restraint Order

Restraint Order

13.1 Customer Information Order

Upon application by an appropriate officer against one or more financial institutions, a judge may make a customer information order if the judge is satisfied that the order is sought for the purposes of:

(i) a forfeiture investigation or a money laundering investigation being carried on in respect of a person specified in the application; or

(ii) a civil recovery investigation being carried on in respect of property specified in the application and a person specified in the application appears to hold the property.

This order causes a financial institution, on being required to do so by notice in writing given by an appropriate officer, to provide any such customer information it has relating to a specified person. A financial institution that is required to provide information under a customer information order shall provide the information to an appropriate officer in such manner, and at or by such time, as the appropriate officer requires. If a financial institution, on which a requirement is imposed by a notice given under a customer information order, requires the production of evidence of authority to give the notice, the financial institution is not bound to comply with the requirement unless evidence of the authority has been produced to it.


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13.1.1 Required Customer Information

The required customer information for an individual and an entity is shown in the table below:

Individual Any other Person (eg Company)

Account or transaction number Account number

Full name and date of birth Entity’s full name

Taxpayer Registration Number Taxpayer Registration Number

Most recent address and any previous addresses

Entity’s registered address and any previous addresses

Date on which the account was held and if closed, the date of closure.

Date on which the account was opened and if closed, the date of closure

Date of transaction and description of the type of transaction.

Description of the business

Identity information Identity information

Full name, date of birth, most recent address and any pervious addresses of any person who holds or has held an account jointly with the individual.

Full name, date of birth and most recent address and any previous addresses of any person who is a signatory to the account

Details of any other accounts to which the individual is a signature.

Country of incorporation

Place of business under the Registration of Business Names Act or any other enactment governing the establishment of the entity. If the entity is incorporated or established outside of Jamaica, anything similar under the overseas country’s legislation.

No other information is required to be submitted in compliance with a customer information order. Other information concerning an account or transaction should only be provided upon service of a disclosure order pursuant to POCA or a production and inspection order pursuant to FIDA.


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13.2 Disclosure Order

This is an order requiring the person:

(a) specified in the order to produce the information or material to an appropriate officer to take the information and material away;

(b) to give an appropriate officer access to the information and material within seven (7) days beginning on the day when the order is served , or

(c) to answer questions either at a time specified in the order or at once, at a place so specified.

The period of seven (7) days may be varied by the Judge who granted the order. The appropriate officer does not have any authority to vary the period stated in the order.

A person, who is required to produce any record, may apply to a Judge in Chambers for a variation of the order. If the Judge is satisfied that the records are essential to the business activity of that person, the Judge may vary the disclosure order so that it requires the person to give the appropriate officer access to the record. A disclosure order does not require a person to produce or give access to:

(a) any information or material which the person would be entitled to refuse to produce on the grounds of legal professional privilege in proceedings in the Supreme court; or

(b) excluded material (This is medical records, human tissue or fluids which has been taken for the purpose of diagnosis or medical treatment and which a person holds in confidence)

Information or material produced in compliance with a disclosure order may be retained by the authorized/appropriate officer for as long as it is necessary, if held in connection with the investigation. A disclosure order shall not be made in respect of accounting records used in the ordinary business of a bank including ledgers, days‐books, cash books and account books.


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13.3 Account Monitoring Order This is an order that a specified financial institution, shall, for the period stated in the order, provide account information of the description specified in the order to an appropriate officer in the manner and at or by the time(s) stated in the order. The stated period shall not exceed ninety (90) days beginning with the day on which the order was made. However, a Judge may extend the period for a further ninety (90) days, upon the application of an appropriate officer, if satisfied that the circumstances so warrant. An account monitoring order may specify information relating to:

(i) All accounts held, or transactions conducted within the specified period, by the person specified in the application for the order at the financial institution so specified;

(ii) A particular description, or particular descriptions of accounts so held or transactions so conducted; or

(iii) A particular account or transaction, or particular accounts or transactions, so held or conducted.

The person who applied for the order or who is affected by it (a financial institution), may make an application to the Court to discharge or vary an account monitoring order. Pursuant to section 29 (1) of FIDA, a financial institution that is or has been subject to a monitoring order, shall not disclose the existence or the operation of the order to any person except:

(a) an officer or agent of the institution for purpose to ensuring that the order is complied with; or

(b) an attorney‐at‐law for the purpose of obtaining legal advice or representation in relation to the order.


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13.4 Production and Inspection Order (FIDA) This is an order which requires a person to:

(a) produce to the authorized officer named in the order, any information, book, record or document that is in the person’s possession or control;

(b) make any such information, book, record or document that is in the person’s possession or control available to the authorized officer for inspection; or

(c) answer questions either at once or, at such time and place as may be specified in the order.

A production and inspection order empowers the authorized officer named in the order to enter the business premises of a person during office hours and carry out an audit or examination of any accounts, books, records or any other documents relating to the business. A production and inspection order shall not be made in respect of accounting records used in the ordinary business of a financial institution including ledgers, days‐books, cash books and account books.

13.5 Restraint Order

Restraint Order is available under sections 32‐33 of POCA, 34‐35 of TPA and 20‐21 of FIDA to prevent the dissipation of assets, including funds in bank accounts.

A restraint order under POCA is an order which is obtained from the Supreme Court, which prohibits any person from dealing with any realizable property held by a specified person.

A restraint order under POCA may provide for:

(a) all realizable property held by the specified person, whether or not the property is described in the order

(b) realizable property transferred to the specified person after the order is made.

(c) reasonable living expenses

(d) reasonable legal expenses

(e) expenses to carry on any trade, business, profession or occupation.


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A restraint order under FIDA is also obtained from a Supreme Court and is used to restrain that person from completing any transaction or dealing relating to property or to restrain a financial institution from carrying out a financial transaction or other financial dealings of any kind with the person.

On receipt of a restraint order, financial institutions must conduct a search of their databases to ascertain whether or not the specified person (s) hold any other account which is not described in the restraint order. These other accounts should also be restrained and their particulars including current balances relayed to the FID.

13.6 Receipt and Processing of Judicial Orders

Financial institutions must designate a responsible officer, ideally in their legal or compliance unit to accept orders. This is to ensure that documents are safely and confidentially received, thereby minimizing the possibility of tipping off. Financial institutions, its officers or agents must not communicate the existence, contents or the operation of a production and inspection order, disclosure order, customer information order and account monitoring order, except for the purpose of ensuring that the order is complied with or obtaining legal advice or representation in relation to the order. This obligation remains in effect, even after the officer/agent ceased employment with the financial institution.

Any communication of information or the production of documents pursuant to a judicial order must only be done with the authorized officer, appropriate officer, attorney‐at‐law for FID and any other such person authorized by the officer in writing. Documents produced in compliance with a judicial order must be certified as true copies of the original by an approved officer of the financial institution who has seen and compared the original with the copied documents. A responsible officer of the financial institution may be required to give a statement to the Authorized/Appropriate Officer in respect to the system in place in relation to the generation and production of the documents.

Transaction history or statement of account produced pursuant to a disclosure order and a production and inspection order should include the following minimum information:

(a) date of the transaction to include year, month and day

(b) description of the transaction (cash, cheque, ATM, POS, wire transfer, etc)

(c) key for codes used to represent transactions

(d) current balance after each transaction

(e) name of payees

(f) type of account (savings, current, shares, investment, etc)


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13.7 Treatment of Accounts after Receipt of a Judicial Order

The service of a judicial order on a financial institution does not necessarily denote that the account, transaction or person named in the order is being used or has committed or is involved in money laundering, terrorist financing or other criminal activities. It would however be prudent and is strongly recommended that financial institutions review historical transactions on such account(s) to make a determination as to whether there are any transactions that may be considered unusual or suspicious.

Financial institutions may also seek to elevate the risk profile of the particular customer after careful and thorough analysis of their and their associates’ accounts and apply enhanced monitoring and due diligence procedures, where necessary.

Future transactions (where not prohibited by the respective order) on these accounts may or may not require appropriate consent from the designated authority and therefore applicable internal controls should be implemented to alert front‐line staff who may be dealing with these transactions.

Care must be taken however that there is no breach of the general provisions under section 104 of POCA with respect to disclosing that an investigation is being or is about to be conducted. It is an offence to prejudice an investigation or prospective investigation by making a disclosure about it or by tampering with documents relevant to the investigation.


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14. OFFENCES AND PENALTIES

POCA Offence Section Penalty ‐ RM Court Penalty ‐ Circuit Court

Individual Body Corporate


Concealing , transferring, converting etc. criminal property

92 Fine up to $3 million and/or up to 5 years imprisonment

Fine up to $5 million

Fine and/or up to 20 years imprisonment

Fine

Engaging in a transaction that involves criminal property

92 Same as above Same as above

Same as above Same as above

Acquisition, use and possession of criminal property

93 Same as above Same as above

Same as above Same as above

Non‐Disclosure by a person in the regulated sector

94 Fine up to $1 million and/or up to 12 months imprisonment

N/A Fine and/or up to 10 years imprisonment

N/A

Non‐Disclosure by a nominated officer in the regulated sector



N/A

Non‐Disclosure by an authorized officer



N/A

Tipping off 97 Fine up to $1 million and/or up to 12 months imprisonment


N/A

Breach of appropriate consent provision by nominated officer



N/A

Breach of declaration provision of cross border movement of funds

100 The greater of fine up to $250,000 or 3 times the cash being transported

N/A N/A N/A

Limit on cash transactions 101A Fine up to $3 million and/or up to 3 years imprisonment


N/A

Offences prejudicing investigation



N/A

Failure to comply with the requirements of a disclosure order

112 (1) Fine up to $1 million and/or up to 12 months imprisonment

N/A N/A N/A

Makes a false or misleading statement with respect to a disclosure order

112(3) Fine up to $1 million and/or up to 12 months imprisonment


N/A

Failure to comply with the requirements of a customer information order

122(1) N/A Fine up to $1 million

N/A N/A

Makes a false or misleading statement with respect to a customer information order

122(3) N/A Fine up to $1 million

N/A Fine

Failure of financial institutions to report certain transactions (TTR)

MLP Reg. 3(7)

N/A Fine up to $400,000

N/A N/A

Unauthorized Disclosure of TTR

MLP Reg. 3(7)


N/A N/A


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Offence Section Penalty ‐ RM Court

Penalty – Circuit Court



Failure to comply with directions from DA & in the provision of additional information

MLP Reg. 3(7)


N/A N/A

Failure to implement regulatory controls by regulated businesses

MLP Reg. 5(5)


N/A N/A

Failure to implement systems & training to prevent money laundering

MLP Reg. 6(2)

Fine up to $1M and/or up to 12 months imprisonment



Fine

Breach of electronic funds transfers requirements

MLP Reg. 9(3)



N/A N/A

TPA Offence Section Penalty ‐ RM Court Penalty ‐ Circuit Court



Contravention of duty of entities to report provision (Listed Entities Report)

Sec.15 (7)



N/A N/A

Failure to report certain transactions (STR)

Sec. 16 (4)



N/A N/A

Unauthorized disclosures Sec. 17 (5)

Fine up to $2M and/or up to 2 years imprisonment


N/A N/A

Contravention of regulatory controls provision

Sec. 18 (6)

N/A Fine up to $1 million

N/A N/A

Contravention of monitoring order or provision of false or misleading information

Sec. 19 (9)

Fine up to $1 million Fine up to $3 million

N/A N/A

Unauthorized disclosure of monitoring order

Sec. 20(5)



N/A N/A

Failure to comply with examination or production order

Sec.22 (1)



N/A N/A

Contravention of restraint order

Sec. 40 (3)




Fine


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Dated this ……..day of March 2014

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Justin Felice Designated Authority The Chief Technical Director Financial Investigations Division Ministry of Finance & Planning ___________________________________ _________________________________ The Honourable Peter Bunting The Honourable A. J. Nicholson Minister of National Security Minister of Foreign Affairs and Foreign Trade