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Adapting to the constant changing environment in banking due to AML/CFT
Criminals oftentimes use the banking system to change ‘dirty’ money to ‘clean’ money (commonly referred to as money laundering) and this poses major risks to countries and the stability of the financial system. As an important institution to a country, commercial banks are, amongst other institutions, the gatekeepers required to mitigate the risk of money laundering and the financing of terrorism, and therefore have a legal responsibility to actively look for unusual transactions. If this is not done according to the law, commercial banks can face hefty fines and penalties and the country can be ‘gray’ or ‘black’ listed and this has far reaching consequences. To help countries and financial institutions manage these risks, international bodies developed a supervisory guideline.
In the case of Sint Maarten, the Centrale Bank van Curaçao en Sint Maarten (“CBCS”) also aims to promote the soundness of the countries’ financial system and a safe and efficient payment system in said countries, among other things. This can be achieved through prudential and anti-money laundering and combating the financing of terrorism (“AML/CFT”) supervision of financial institutions.