Senate passes Bill to tighten regulations on trust, corporate services | Loop Jamaica

The content originally appeared on: Jamaica News

Members of the Upper House on Friday approved the International Corporate and Trust Services Providers (Change of Name and Amendment) Act, 2021.

The legislation seeks to amend the International Corporate and Trust Services Providers Act (the Principal Act), which was passed and assented to on August 18, 2017 and awaits an appointed day notice. It was passed with two amendments.

The Principal Act seeks to regulate international trust and corporate service providers to prevent the misuse of these business arrangements as vehicles for illicit ends, such as money laundering and terrorism financing.

Piloting the legislation, Minister of Foreign Affairs and Foreign Trade, Senator Kamina Johnson Smith, said the Bill aims to remove the distinction in treatment between international and domestic service providers by bringing domestic service providers under the ambit of the legislation and to strengthen the provisions of the Principal Act.

“Most of the amendments deal with what we will refer to as neutralising language, essentially deleting the word international or international service providers in most of the cases and bringing it into a more collective language,” she said.

Johnson Smith explained that trust and corporate service providers often play key roles as intermediaries between global financial institutions and their customers, and significantly impact transactional flows through the financial system.

She noted, too, that criminals may seek to exploit trust and corporate service providers to retain control of proceeds of their crimes through shell companies or trusts, while hiding the source and true ownership of these assets.

“It was recognised that there was a need to include domestic corporate and trust providers into the regulatory ambit of the Principal Act, because to maintain this distinction would have run afoul of the requirements and standards of the Financial Action Task Force (FATF),” she said.

This was among the deficiencies cited in Jamaica’s anti-money laundering countering of terrorism financing supervisory regime, and contributed to Jamaica’s inclusion in the current FATF grey list that was issued on February 21, 2020 as a jurisdiction subject to increased monitoring.

John Smith said the Bill is critical to Jamaica’s designation by the FATF.

“It is also important to our maintenance of a healthy financial system as we grow that sector of services by deterring the use of this type of business operations for the purpose of money laundering, the financing of terrorism or the financing of proliferation of weapons of mass destruction,” she added.