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Thursday, July 24, 2025

‘AML/CFT adherence crucial for credit union boards’

by

GEISHA KOWLESSAR ALONZO
25 days ago
20250626

At the 2025 Caribbean Con­fed­er­a­tion of Cred­it Unions (CC­CU) an­nu­al in­ter­na­tion­al con­ven­tion, di­rec­tor of the Fi­nan­cial In­tel­li­gence Unit of T&T Nigel Stod­dard played a key role in shap­ing the con­ver­sa­tion around com­pli­ance and gov­er­nance.

He led a break­out ses­sion ti­tled, ‘Board Over­sight in Com­pli­ance: Strength­en­ing AML/CFT Gov­er­nance in Cred­it Unions,’ which fo­cussed on en­hanc­ing board-lev­el ac­count­abil­i­ty in an­ti-mon­ey laun­der­ing (AML) and com­bat­ting the fi­nanc­ing of ter­ror­ism (CFT) prac­tices.

The con­ven­tion which took place from June 21 to 24, was held at the Par­adis­us Ho­tel, Do­mini­can Re­pub­lic.

With over two decades of ex­pe­ri­ence in fi­nan­cial in­tel­li­gence and a deep com­mit­ment to AML and CFT, Stod­dard de­tailed how cred­it union boards must evolve from pas­sive over­seers to proac­tive guardians of in­tegri­ty, em­pha­sis­ing trans­paren­cy, risk man­age­ment and a cul­ture of eth­i­cal lead­er­ship.

He high­light­ed the need to en­gage in ef­fec­tive over­sight to pro­tect cred­it unions from emerg­ing trends in fraud and sus­pi­cious ac­tiv­i­ty as he cit­ed the work of the Fi­nan­cial Ac­tion Task Force (FATF) and its role in pro­vid­ing guid­ance to over 100 coun­tries.

Stod­dard said the FATF set stan­dards, em­pha­sis­ing that rec­om­men­da­tions are al­so con­vert­ed in­to na­tion­al laws and reg­u­la­tions as guid­ance, adding that coun­tries are ex­pect­ed to com­ply.

He re­mind­ed par­tic­i­pants they have a re­spon­si­bil­i­ty to mon­i­tor the en­vi­ron­ment and to be­come fa­mil­iar with these mat­ters so they may be ap­pro­pri­ate­ly pre­pared to re­spond in re­al-time should the or­gan­i­sa­tion be con­front­ed with mon­ey laun­der­ing, fraud, pro­lif­er­a­tion fi­nanc­ing or oth­er re­lat­ed il­le­gal ac­tiv­i­ties.

Stod­dard fur­ther stressed that fail­ure to com­ply with stan­dards of the FATF or the coun­try’s AML/CFT/CPF laws may lead to fines in ex­cess of $250,000 in some cas­es, prison terms or oth­er forms of sanc­tions, not­ing that non-com­pli­ance may al­so lead to stricter reg­u­la­to­ry scruti­ny and rep­u­ta­tion­al loss.

In this re­gard, he said the cred­it union board of di­rec­tors is ul­ti­mate­ly re­spon­si­ble for en­sur­ing that a sound com­pli­ance regime ex­ists and it must al­so en­sure that a com­pli­ance of­fi­cer is ap­point­ed. The board must al­so en­sure that the cred­it union is guid­ed by a com­pli­ance pro­gramme which must ad­dress ar­eas of due dili­gence and en­hanced due dili­gence for its mem­bers.

En­hanced due dili­gence ap­plies to po­lit­i­cal­ly ex­posed mem­bers, cash-in­ten­sive trans­ac­tions or oth­er trans­ac­tions which may be deemed as high risk, he cit­ed.

Fur­ther, Stod­dard said the board must al­so ad­here to the re­quire­ment for manda­to­ry an­nu­al train­ing and re­train­ing for its of­fi­cers and staff and there must be an in­de­pen­dent ex­ter­nal au­dit of the com­pli­ance port­fo­lio.

While these steps re­main crit­i­cal in pro­tect­ing cred­it unions, he stressed the need for as­sess­ments to be done on a risk-based ap­proach and not as a one-size-fit-all for­mat, adding that risk-based ap­proach­es would al­low a bet­ter analy­sis of the mem­bers’ busi­ness pro­file and avoid un­nec­es­sary de­lays in the con­duct of mem­bers’ busi­ness.

His ses­sion was part of a broad­er agen­da aimed at equip­ping cred­it union lead­ers with tools to nav­i­gate reg­u­la­to­ry chal­lenges while fos­ter­ing sus­tain­able growth.

Di­anne Joseph, chief op­er­at­ing of­fi­cer (COO) of the Co-op­er­a­tive Cred­it Union League en­dorsed the need for a risk-based ap­proach as nec­es­sary, not­ing that there is a view that some as­pects of the laws, if not prop­er­ly ap­plied, could make the process very dif­fi­cult for mem­bers to con­duct busi­ness and would ex­clude many cit­i­zens from the for­mal fi­nan­cial sys­tem, forc­ing them to re­main un­banked.

“This we found to be a favourable po­si­tion and look for­ward to fur­ther pro­nounce­ments that will mo­ti­vate fi­nan­cial in­sti­tu­tions to em­brace more per­sons with­in the fi­nan­cial ser­vices sec­tor,” she added.

Cit­ing that T&T and Ja­maica are the largest leagues in the re­gion, she said this coun­try has 763,000 cred­it union mem­bers, in ex­cess of 133 cred­it unions and $19.5 bil­lion as­sets.

Ja­maica, Joseph said, has ap­prox­i­mate­ly 1,000,000 mem­bers and 25 cred­it unions.

“I am as­sured that the glob­al cred­it union move­ment of 400 mil­lion mem­bers across 104 coun­tries and as­sets of over US$3.6 tril­lion dol­lars re­mains strong and will con­tin­ue to re­main a pil­lar of strength to those that are un­der­served,” she added.

Pri­or to the CC­CU con­ven­tion, on June 5 to 8 the league host­ed its 25th an­nu­al in­ter­na­tion­al lead­er­ship con­fer­ence at the Coren­don Ho­tel, Cu­ra­cao.

This year’s theme was “The Dis­rup­tive Age- Lead­er­ship Strate­gies to sur­vive and thrive.”

In at­ten­dance were par­tic­i­pants from the in­ter­na­tion­al cred­it union move­ment in ex­cess of 150, Joseph said.

Pres­i­dent of the Cen­tral Bank of Cu­ra­cao and Sint Mar­tin, Richard Doorn­bosch and Vanes­sa Tore, Cu­ra­cao’s di­rec­tor, for­eign eco­nom­ic co-op­er­a­tion, Min­istry of Eco­nom­ic De­vel­op­ment were among key par­tic­i­pants.

Doorn­bosch laud­ed the work of cred­it unions and urged par­tic­i­pants to con­tin­ue to em­brace strate­gic plan­ning that would en­able these en­ti­ties to re­main re­silient.

Not­ing that cred­it unions re­main a key play­er in the fi­nan­cial ser­vices sec­tor, he said they must be em­braced in a man­ner that al­lowed them to grow and pros­per.

In do­ing so how­ev­er, he urged cred­it unions to be cog­ni­sance in the cas­es where they may want to pur­sue merg­ers and amal­ga­ma­tions as he al­so re­mind­ed par­tic­i­pants that con­tin­u­ous train­ing and de­vel­op­ment are para­mount and are strate­gic paths they should con­tin­ue to fol­low for fur­ther skills de­vel­op­ment.

Doorn­bosch added that cred­it unions must al­so re­main rel­e­vant and re­it­er­at­ed the need for fi­nan­cial in­clu­sion to com­pete in the eco­nom­ic en­vi­ron­ment which re­mains some­what cur­rent­ly un­cer­tain.

Mean­while, Tore urged cred­it unions to ex­am­ine av­enues to sup­port SMEs scale-up to a stan­dard that would al­low them to not on­ly sur­vive, but to thrive in a com­pet­i­tive mar­ket.

She al­so echoed that cred­it unions need to re­main vig­i­lant and to look at new ways to as­sist the in­creas­ing num­ber of SMEs and en­tre­pre­neurs who re­quire fi­nan­cial sup­port and up­skilling to help bet­ter man­age their busi­ness­es while adding val­ue to their gov­er­nance frame­work.

Tore al­so pledged her min­istry’s sup­port to the con­tin­ued work of the Co-op­er­a­tive Cred­it Union League to re­gion­al in­te­gra­tion, net­work­ing and part­ner­ship.

Joseph said Tore is ex­pect­ed to vis­it the league for fur­ther talks in the com­ing months.

She said to strength­en the sec­tor in Cu­ra­cao, the league signed a Mem­o­ran­dum of Un­der­stand­ing at the clos­ing cer­e­mo­ny on June 7.

Joseph ex­plained the main ob­jec­tive was to pro­mote each oth­er’s prod­ucts and ser­vices and for the league to of­fer tech­ni­cal and ad­vi­so­ry ser­vices, ca­pac­i­ty build­ing, ex­change pro­grammes to pur­sue fin­tech so­lu­tions and pre­ven­tion strate­gies against cy­ber­crimes.


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