Seychelles

Last Updated: 19/07/2013


CENTRAL AUTHORITY FOR REPORTING

The Anti-Money Laundering (Amendment) Act 2011 (AMLAA 2011) amended the Anti-Money Laundering (Amendment) Act 2008 (AMLAA 2008). The AMLAA 2008 established the Financial Intelligence and Assets Recovery Unit, (FIU), which is an independent corporate body reporting directly to the President of Seychelles. With regard to the FIU, the AMLAA 2011 upholds the status quo implemented by AMLAA 2008 but also increases the investigative powers and duties of the FIU.

The FIU is responsible for ensuring compliance with anti-money laundering and counter terrorist financing legislation. It acts as the central authority centre for receiving information on suspected money laundering transactions and is responsible for disseminating information to law enforcement and supervisory agencies for prosecution.

As a result of the increase in powers and responsibilities, officers of the FIU are also empowered with the legal authority to undertake in depth investigations.


FURTHER ANTI-MONEY LAUNDERING REGULATOR(S) AND SUPERVISORY BODIES

The Central Bank of Seychelles is responsible for supervising the implementation and adherence of legislation governing the operations of financial institutions, such as Banks and Bureau de Change.

The Attorney General’s Office is responsible for drafting the anti-money laundering and counter terrorist financing legislation. The Attorney General’s Office is also responsible for initiating any legal action taken against those who are suspected of laundering money or financing terrorist actions.

SIBA is an independent authority responsible for the regulation of international business activities and the Seychelles International Trade Zone. SIBA licences registered agents, such as trust and corporate service providers, and ensures that licensees comply with due diligence requirements when registering new companies. SIBA is obligated to report suspicious transactions to the FIU.

  • Seychelles’ Police Force;

The police department has a dedicated team for investigating money laundering and other financial crimes.

The customs division is headed and controlled by the Comptroller of Trades Tax. The FIU is authorised under Section 19(c) of AMLA 2011 to request information from the Comptroller of Trades Tax.

Other Law Enforcement Agencies:

  • Seychelles Revenue Commission.
  • The National Drug Enforcement Agency (NDEA)

ARE LAWYERS COVERED BY ANTI- MONEY LAUNDERING LEGISLATION?

Yes.

Section 2(s) of the AMLA 2011 includes attorneys and notaries as reporting entities within the scope of the AMLA 2011 when they prepare for or carry out certain activities on behalf of their clients:

  • Buying or selling of real estate;
  • Management of client money, securities and or other assets;
  • Management of bank , savings or securities accounts;
  • Organisation of contributions for the creation, operation and management of companies; or
  • Creation, operation or management of legal persons or arrangements, and buying or selling of business entities.

Section 2 Anti-Money Laundering Regulations 2012 also covers ‘independent legal professionals’ which are defined in paragraph 3.2 of the Second Schedule of the AMLAA 2011.

Accordingly, independent legal professionals cover persons or firms who by way of business provide legal or notarial services to third parties when preparing for or in carrying out transactions concerning:

  • Buying or selling immovable property or business entities
  • Managing client’s money, securities or other assets
  • Opening or managing bank, savings or securities accounts
  • The organisation of contributions necessary for the creation, operation or management of companies, or
  • The creation, operation or management of trusts, companies or similar structures, excluding any activity that requires a licence under the International Corporate Services Act.

However, it must be noted that only independent legal professionals are covered by these regulations; paragraph 3.2 does not include legal professionals employed by public authorities or undertakings which do not by way of business provide legal services to third parties (paragraph 3.3).According to the Part 2 of the Anti-Money Laundering Act, 2006 “reporting entities” are subject to the obligations of the Act, which include client due diligence checks, the maintenance and continuous review of client records and suspicious transaction reporting.


LIST THE LAWS REGARDING ANTI-MONEY LAUNDERING, INDICATING WHICH LAWS ARE APPLICABLE TO LAWYERS.

Anti-Money Laundering Regulations 2012  (applicable to lawyers) – enacted in April 2012
Anti-Money Laundering (Amendment) Act 2011 (applicable to lawyers)
Anti-Money Laundering (Amendment) Act 2008 (applicable to lawyers)
Anti-Money Laundering Act 2006 (applicable to lawyers)
FIU Anti-Money Laundering Guidelines (applicable to lawyers).  


ARE VISITING LAWYERS SUBJECT TO LOCAL LAWS REGARDING ANTI-MONEY LAUNDERING, AND, IF SO, TO WHAT EXTENT?
 

No.

Section 2 of the Anti-Money Laundering Regulations 2012 introduces the concept of ‘foreign regulated persons’, which as defined by Section 7(a) and (b)(ii) includes ‘the business of an independent legal professional’ which is incorporated, registered or otherwise established, or having its principal place of business in a country outside Seychelles and carries on business in Seychelles which is usually carried on outside of Seychelles.

Section 7(c) states that in respect of businesses of such foreign regulated persons, the legal requirements in their country of origin for the prevention of money laundering and financing of terrorism that are consistent with the requirements of the FATF in relation to such business and to supervision by a foreign regulatory authority.


LIST ANY MONEY LAUNDERING GUIDANCE FOR LAWYERS (FOR EXAMPLE, LAW SOCIETY OR BAR ASSOCIATION GUIDELINES) CURRENTLY IN PLACE.

Lawyers in Seychelles are governed by the Law Practitioners Act (LPA). Membership of the Bar Association of Seychelles is not compulsory. Neither the LPA nor the Bar Association provides for any anti-money laundering guidance for lawyers.

However, lawyers are governed by Guidelines on Anti Money Laundering or Combating of Financing of Terrorism Procedures for Reporting Entities in Seychelles, issued by the FIU in December 2007.


IS THE LAW SOCIETY/BAR ASSOCIATION INVOLVED IN SUPERVISING OR ENFORCING COMPLIANCE WITH ANTI-MONEY LAUNDERING REGULATIONS?

No.


 DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS. DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.  DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.DESCRIBE CLIENT DUE DILIGENCE REQUIREMENTS, INCLUDING WHEN IT MUST BE UNDERTAKEN BY LAWYERS.

 Sections 4, 6, and 10 of the AMLAA 2011 contain the obligations of a reporting entity, which includes lawyers.

Section 4 AMLAA 2011 provides for a reporting entity to “apply customer due diligence measures in respect of customers, business relationships and transactions, and conduct ongoing monitoring of business relationships in the manner as prescribed in regulations”.

As prescribed by Section 8(1) Anti-Money Laundering Regulations 2012, a reporting entity shall apply customer due diligence measures when:

  • Establishing a business relationship
  • Carrying out a one-off transaction
  • The reporting entity has doubts on the veracity/adequacy of documents, data or information obtained for the identification/verification of a customer, or
  • There are reasonable suspicions of money laundering, financing of terrorism or other criminal conduct.

In addition,Sections 8(2)-(3) stipulate that, even absent the above requirements, customer due diligence measures to existing customers shall be applied at appropriate times on risk-sensistive basis. The risk-sensitive approach will be determined on the basis of the type of customer, business relationship, product or transaction and the guidelines issued by the FIU which are not inconsistent with the AMLAA 2011 or the 2012 Regulations. Nevertheless, the extent of the measures must be ‘appropriate’ in view of the risks of money laundering, financing of terrorism or other criminal conduct.

Section 9 also requires a reporting entity to conduct ongoing monitoring of a business relationship. This includes scrutinising transactions to ensure that they are consistent with the reporting entity’s knowledge of the customer, the business and risk profile and the source of funds of the customer as well as keeping the documents, data or information obtained for the purpose of applying customer due diligence measures upt to date.

A reporting entity must carry out customer due diligence before establishing a business relationship or carrying out a one-off transaction. Measures during the establishment of the business relationship can only be taken when they are necessary for not interrupting the normal course of business and when there is a low risk of money laundering, financing of terrorism or other criminal conduct. Such measures must be completed as soon as practicable after establishing the business relationship (Section 10). 

Keeping Records

Section 6  AMLAA 2011 provides for the record keeping requirements to be followed by a reporting entity. Records shall be maintained for the following:

  • customer due diligence measures prescribed by regulations;
  • All transactions and correspondence that is necessary to enable reconstruction of any transaction by the FIU or the Attorney General. This should contain particulars sufficient to identify:
    1. the nature and date of the transaction;
    2. the type and amount of currency involved;
    3. the type and identifying number of any account held by the client with the reporting entity involved in the transaction;
    4. In a transaction involving a negotiable instrument other than currency, the following information is to be recorded:
      1. Name of drawer of the instrument;
      2. Name of the institution from which it was drawn;
      3. Name of the payee (if any);
      4. The amount and date of the instrument; and
      5. The number of instruments and details of any endorsements appearing on the instrument.
    5. Name and address of the reporting entity, and of the officer, employee or agent of the reporting entity that prepared the record;
  • All reports made to FIU under Section 10; and
  • Enquires relating to ML/TF made by the FIU.

Section 6(2) AMLAA 2011 requires these records to be kept for a period of seven years from the date:

  • On which evidence of a person’s identity is obtained;
  • Of any transaction or correspondence; or
  • On which the business relationship ceases.

Section 8(5) Anti-Money Laundering Regulations 2012 also imposes duties on the reporting entity to keep records relating to customer due diligence and ongoing monitoring, the safeguards exercised before relying on regulated persons and the business or services carried out by or with a customer or on his behalf, for the period referred to in Section 6(2) AMLAA 2011).

For the obligations of reporting entities arising out of Section 10, refer to section below on reporting suspicious transactions.


DOES YOUR COUNTRY FOLLOW A RISK-BASED APPROACH  TO CLIENT DUE DILIGENCE BY LAWYERS? 

Yes. The client due-diligence requirements based on a risk-based approach have been outlined above in Sections 8(2)-(3), 13 and 15 AMLAA 2011.


ARE THERE ENHANCED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, POLITICALLY EXPOSED PERSONS?

A reporting entity shall also apply on a risk-sensitive basis enhanced customer due diligence measures and enhanced ongoing monitoring if:

  • It knows or has reasonable grounds to believe that a customer or beneficial owner of the customer (residing in or outside of Seychelles) is or becomes a politically exposed person (Section 13(1) Anti-Money Laundering Regulations 2012);
  • In any other situation which by its nature can present a higher risk of money laundering, financing of terrorism or other criminal conduct (Section 15(1)); or
  • In respect of business relationships with persons from, and transactions in, countries which do not apply or fully apply the FATF Recommendations (Section 15(2)).

For the purposes of Section 13, in cases of politically exposed persons, the reporting entity shall:

  • Obtain approval of senior management before establishing a business relationship with the client;
  • Take adequate measures to establish the source of wealth and source of funds which are involved in the proposed business relationship or one-off transaction
  • Conduct enhanced monitoring of the relationship, or
  • Apply such other measures provided for in the guidelines issued by the FIU to compensate for the higher risk of money laundering, financing of terrorism or other criminal conduct. 

ARE THERE SIMPLIFIED DUE DILIGENCE MEASURES FOR CERTAIN TYPES OF CLIENTS, FOR EXAMPLE, LISTED COMPANIES ?

No information is available.


ARE LAWYERS PERMITTED TO RELY ON THIRD PARTY DUE DILIGENCE?  IF YES, PLEASE DESCRIBE. 

Yes.

In accordance with Section 12(2) Anti-Money Laundering Regulation 2012 a reporting entity may also rely on a regulated person to apply customer due diligence measures if the regulated person consents to being relied onand gives the reporting entity a written undertaking that it:

  • Applies or will apply customer due diligence measures on an ongoing basis
  • Is under a legal obligation to keep and keeps records of the customer due diligence measures applied with respect to its customers
  • Will keep the records for the period referred to in Section 6(2) AMLAA 2011
  • Will without delay on request by the reporting entity produce the original or certified copies of the records to the reporting entity, which records may be used as evidence in court proceedings
  • Where it is about to or has ceased to carry on business, shall forward to the reporting entity all records of customer due diligence measures applied in respect of its customers.

Further, Section 12(3) allows such measures will be applied in respect of:

  • Any beneficial owner or controller of the customer
  • Any third party from whom the customer is acting
  • Any beneficial owner or controller of a third party for whom the customer is acting, or
  • Any person purporting to act on behalf of a customer.

However, the regulation does not apply to a licenced bank, a bureau de change or a reporting entity who by way of business provides to third parties services such as acceptance of deposits or other repayable funds from the public or lending, including consumer credit, mortgage credit, factoring, financing of commercial transactions, including forfeiting (Section 12(4)).

Nevertheless, the ultimate responsibility for applying the customer due diligence measures remains with the reporting entity (Subsection 6). For instance, if the regulated person is about to or has ceased to carry on business, the reporting entity shall immediately take all reasonable steps to take possession of and keep records of the customer due diligence measures (Subsection 5).


WHEN IS A LAWYER UNDER AN OBLIGATION TO REPORT SUSPICIOUS TRANSACTIONS?

Section 10 AMLAA 2011 requires a reporting entity to report suspicious transactions to the FIU within two working days of ascertaining knowledge, forming a suspicion or receiving the information when it has:

  • Knowledge or reasonable grounds to suspect that any service, or transaction may be related to the commission of criminal conduct including an offence of money laundering or of financing of terrorism or to money or property that is or represents the benefit of criminal conduct
  • Information that may be relevant to an act preparatory to an offence or to money or property referred to above, relevant to an investigation or prosecution of a person for an offence referred to above, or of assistance in the enforcement of the AMLAA 2011 or the Proceeds of Crime (Civil Confiscation) Act 2008.

DOES ATTORNEY/CLIENT PRIVILEGE AND/OR DUTIES OF CONFIDENTIALITY PROVIDE A DEFENCE OR PARTIAL/TOTAL EXCEPTION TO THE REQUIREMENT TO REPORT SUSPICIOUS TRANSACTIONS?

No.

The AMLAA 2011 does not provide partial or total exception to the requirement to report suspicious transaction with respect to attorney/client privilege and/or duties of confidentiality. However, Section 12 (2)(b) excludes liability for tipping-off for disclosures made to a legal practitioner, attorney or legal advisor in obtaining legal advice or with respect to representation in the relevant matter.


DOES LOCAL LAW PROVIDE ANY CRIMINAL AND/OR CIVIL INDEMNITY TO A LAWYER WHO HAS REPORTED A SUSPICIOUS TRANSACTION?

Section 14 AMLAA 2011 provides that no civil, criminal or disciplinary proceedings shall be taken for any action taken under Sections 9, 10 or 11 AMLAA 2011 in good faith, or in compliance with directions given by the FIU in accordance with Section 24 AMLAA 2011, against:

  • A reporting entity;
  • An auditor or supervisory authority of a reporting entity;
  • An officer, employee or agent of a reporting entity; or
  • An auditor or supervisory authority of reporting entity acting in the course of employment or agency.

ONCE A SUSPICIOUS TRANSACTION REPORT HAS BEEN FILED, IS A LAWYER ALLOWED TO PROCEED WITH THE LEGAL ADVICE/TRANSACTION, AND, IF SO, MUST CONSENT FROM AUTHORITIES BE OBTAINED FIRST?

Section 10(1)(c)-(d) Anti-Money Laundering Regulations 2012 covers suspicious transaction reports relating to services or transactions in respect of property, in which case the reporting entity shall not provide the service nor proceed with the transaction within a period of ten working days from the date of the suspicious report without the written consent of the FIU (for it to proceed in whole or in part). If no such consent is given within those ten days, the reporting entity may provide the service or carry out the transaction unless the FIU issues a direction, with which the reporting entity must comply.

Such consent shall not apply to inward transfers in a bank account or to any service or transaction that will increase the value of the property (Subparagraph (f)).

Additionally, Section 10(4) states that the Director, Deputy Director or an assets agent of the FIU duly authorised by the Director or the Deputy Director may direct a reporting entity not to carry out any specified service or transaction during the period specified in the direction, not exceeding 180 days, if:

  • A suspicious transction report has been made to the FIU in relation to the service or transaction within the preceding 30 days
  • The FIU has obtained or received information, whether or not in a suspicious transaction report, in relation to the service or transaction, and
  • Such a direction is reasonably necessary to enable the FIU to investigate whether or not there are reasonable grounds to suspect that the property represents the proceeds of or benefit from criminal conduct including an offence of money laundering and financing of terrorism.

In certain circumstances, a court may also, on an ex-parte application, extend a direction on such terms and conditions (Subparagraph (7)) or revoke the direction in whole or in part (Paragraph 9(c)).


IS THERE A TIPPING-OFF PROHIBITION?  IF YES, PLEASE DESCRIBE.

Yes. Pursuant to Section 12 AMLAA 2011, a reporting entity, its officers, employees or agents shall not disclose:

  • Reports made to the FIU under Section 10 or 11;
  • that the reporting entity has formed a suspicion with respect to a transaction; or
  • Any other information that may lead someone to reasonably infer that a suspicion has been formed or that a report has been made.

Section 12(2) AMLAA 2011 provides exceptions to the tipping-off prohibition with respect to disclosures made to:

  • An officer, employee or agent of the reporting entity for any purpose connected with the performance of that person’s duties;
  • A legal practitioner, attorney or legal advisor for the purposes of obtaining legal advice or representation in relation to the matter; or
  • A reporting entity’s supervisory authority that is carrying out its functions as supervisor.

DESCRIBE ANY RESTRICTIONS ON ACCEPTING A NEW CLIENT.

Section 10(1) Anti-Money-Laundering Regulations 2012 requires the completion of customer due diligence procedures, before entering into a business relationship.


ARE THERE ONGOING MONITORING REQUIREMENTS FOR EXISTING CLIENTS?  IF YES, PLEASE DESCRIBE.

Section 9 AMLAA 2011 requires a reporting entity to pay special attention to:

  • Any complex, unusual or large transaction;
  • Any unusual pattern of transactions without any apparent purpose;
  • Business relations and transactions with jurisdictions having inadequate AML/CFT systems; and
  • Electronic fund transfers which do not contain complete originator information.

Section 9(4) stresses the importance of monitoring transactions and business relationships throughout their duration for ensuring compliance with Section 4 and that such transactions are consistent with the information held by the reporting authority.


DESCRIBE ANY OTHER WAYS IN WHICH LAWYERS ARE AFFECTED BY ANTI-MONEY LAUNDERING LEGISLATION.

No additional  information is available.


HAVE LAWYERS IN YOUR JURISDICTION BEEN IMPLICATED IN MONEY LAUNDERING, INCLUDING ANY TYPE OF COMPLAINT, ARREST OR PROSECUTION?

No information is available.


HAS THE FINANCIAL ACTION TASK FORCE (FATF) OR A FATF-STYLE REGIONAL BODY CONDUCTED A MUTUAL EVALUATION OF THIS COUNTRY, AND, IF SO, WHAT WERE THE FINDINGS CONCERNING LAWYERS’ COMPLIANCE WITH THE FATF 40+9 RECOMMENDATIONS?

Yes.

Seychelles is a member of the ESAAMLG, which itself is an associate member of the Financial Action Task Force (FATF). The ESSAMLG and the World Bank] conducted an evaluation of the AML/CFT regulatory framework in Seychelles and its compliance with the FATF Recommendations in late 2006 and published a Mutual Evaluation Report in August 2008.

The Mutual Evaluation Report rated Seychelles as follows:

Recommendation 12 (Client Due Diligence): Non-Complaint

Recommendation 16 (Suspicious Transaction Reporting): Non-Complaint

Recommendation 24, 25 (Regulation, Supervision, Monitoring and Sanctions): Non-Complaint

Recommendation 20 (Other Non-Financial Business and Professions and Modern and Secure Techniques of Money Management): Partially Complaint

Seychelles has made significant efforts to improve its AML/CFT regulatory framework by amending the AMLA 2006 and establishing a stronger and more independent FIU under Section 16 AMLAA 2008. Initially the FIU was established on 1 July 2006 under Section 16 AMLA 2006 as an independent body within theCentral Bank of Seychelles. However the new FIU is not under CBS, but an independent corporate body having enhanced investigatory and monitoring powers.

No other recent Mutual Evalution Report has been conducted on the Anti-Money Laundering regime in Seychelles. However, since the Mutual Evaluation Report published in 2008, the legislative framework has been reformed and strengthened through the AMLAA 2011 and the Anti-Money Laundering Regulations 2012. Measures on client due diligence and suspicious transaction reporting, which were previously found to be non-compliant with the FATF recommendations have now been thoroughly revisited in the new pieces of legislation.

Moreover, several laws governing offshore activities (trusts, foundations, funds and taxation) have been amended as a result of therecommendations of the OECD Global Forum’s latest peer review report on transparency and exchange of information for tax purposes. Consequently, Seychelles has since been viewed by the OECD as entirely aligning with its international standards of exchange of information.


 

Information supplied by:

Corina Lefter
Commercial Law Intern
Legal Projects Team

International Bar Association
4th Floor, 10 St Brides Street 
LONDON, EC4A 4AD
United Kingdom