Closing Remarks by Ms Caroline Abel
Governor of the Central Bank of Seychelles
Official Launching of 4th ESAAMLG AML/CFT Public-Private Sector
Dialogue
Friday 7 September 2018
Venue: Savoy Resort and Spa
Vice President Vincent Meriton,
Minister for Finance, Trade, Investment & Economic Planning, Mr.
Maurice Loustau-Lalanne,
Visiting Ministers and Members of the ESAAMLG Council of
Ministers,
Permanent Secretaries,
Chairman & members of the Task Force of Senior Officials,
Executive Secretary of the ESAAMLG,
Private Sector Participants,
Invited Guests,
Ladies and Gentlemen,
Good afternoon
Firstly, I would like to reiterate the warm welcome already extended by the
Minister for Finance, Trade, Investment & Economic Planning, to all
delegates and guests, from the region and beyond, who have crossed the
ocean to be here in the Seychelles islands.
The Central Bank of Seychelles is indeed honoured to have been given
this opportunity, to organise the 4th ESAAMLG Public-Private Sector
Dialogue, on Anti-Money Laundering and Combating the Financing of
Terrorism.
I would like to thank all of you present, for accepting the invitation to take
part in this gathering, which is expected to lead to meaningful and
productive deliberations, on a range of issues that are critical to
developing AML/CFT regimes in our region. Our four keynote speakers
this afternoon, have done an excellent job at setting the stage for
deliberations on
tomorrow's the three chosen topics. Their in-depth
presentations have surely given us a broad overview of the challenges
that exist, not only in their respective countries, but which is shared by
-
each and every single one of our member countries although to different
extent.
Now that the groundwork has been done, it is up to us as government
officials, policy makers and private sector representatives gathered here
today, to come together to address our specific situations, learn from each
other's experiences, exchange ideas on best
practices, and propose
possible solutions, as we seek to develop more robust and effective
AML/CFT regimes in our individual countries, and as a region.
Seychelles, though small in size, will continue to do its part with greater
vigour in that endeavour.
Ladies and Gentlemen,
I cannot overemphasize the importance of the chosen topics for this
Public-Private Sector Dialogue. When we talk about de-risking, which is
having adverse effects on many of our member countries, it is only fitting
that the existence, causes and impact of this complex phenomenon within
the ESAAMLG region, is among topics to be discussed at length. Given
its threat to financial stability and financial inclusion, discussing on
possible solutions to overcome this risk is critical, especially for those of
us who are very dependent on the international payment system to effect
trade.
Seychelles has not been spared, as some of our banks have experienced
this phenomenon and one of them will be sharing its experience on the
issue tomorrow. Despite this reality, we have been proactive. In line with
its mandate to ensure financial soundness and financial stability, the Bank
has been engaging in several initiatives, as part of efforts to mitigate the
threat and impact on the economy.
One of the initiatives was a roadshow conducted during the last quarter of
2017, when a team from the Central Bank and Financial Services
Authority visited several Financial centres in Europe and the United States
- particularly in London, Frankfurt, Zurich, Madrid, Paris and New York.
While the main aim was to better understand the de-risking issue, and
inform the international community about efforts being undertaken to
strengthen the effectiveness of the AML/CFT regimes in the jurisdiction,
the visits also provided the opportunity for us to better appreciate the
concerns that correspondent banks and regulators have regarding the
jurisdiction.
As we uncovered the challenges, ranging from issues specific to the
offshore sector, as well as jurisdictional issues, it became clearer that the
country has to overcome several issues to reduce the risk of losing
correspondent banking relationships. Since then, we have embarked on
an action plan to step up efforts to address a series of recommendations,
some of which had already been identified. This includes the
enhancement of our AML/CFT legal framework, reforming the offshore
sector, closer engagement with correspondent banks showing greater
interest in dealing with the jurisdiction, and the need to embark on a
comprehensive, co-ordinated and sustained communications campaign to
restore the reputation of the jurisdiction.
While we continue to highlight the issue of de-risking as a threat, we are
conscious that we have to play our part to beef up our AML/CFT regime,
and ensure that we are in compliance, as non-compliance is not an option.
It is for this very reason that Seychelles sought the assistance of the World
Bank to conduct its first National Risk Assessment. The Mutual
Evaluation came in timely such that all recommendations can be
consolidated and acted upon. Work is already underway as we
endeavour to close the gaps that have been identified, with the aim of
strengthening Seychelles' reputation and adherence to international best
practices. With this dialogue, we look forward to enhancing our repertoire
of sustainable solutions.
Ladies and Gentlemen,
Thinking of the continent, we cannot run away from the fact that illegal
one of today's most
wildlife trade is lucrative forms of organised crime that
has not spared the ESAAMLG region.
And similar to many countries in the region, Seychelles, which boasts a
unique biodiversity ranging from the legendary coco-de-mer, the giant
Aldabra tortoise, the sea turtles, a variety of insects, bird and fish species,
among others, has also been witnessing an increase in poaching and
crimes related to the illegal trade of endemic flora and fauna, including
some of the endangered species.
The Seychelles' Ministry of Environment, Energy and Climate Change
notes that as recently as 2017 and earlier this year, several reports of
people smuggling giant land tortoises and even reptiles out of the country,
have been recorded. This includes the Seychelles' giant bronze gecko, as
rightly mentioned by the Minister in his opening address, which is believed
to be sold for thousands of USD on the international market.
It is evident that if left unchecked, such practices pose the risk of
establishing very perverse activities locally just to feed such markets. And
although complex we need to combat illegal wildlife trade because
besides generating significant losses in assets and revenues, illegal
wildlife trade is also a threat to the livelihood of our communities, our
ecosystems, and even food security.
As we speak the value of illegal funds being derived from illegal trade in
wildlife in Seychelles is not specifically known, although we are well aware
of existence of such trade. Nevertheless, the fact that this phenomenon
has emerged and is affecting our jurisdiction and wider region, is reason
enough for us to try and find mechanisms that will allow us to better
understand the financial aspect of this illicit activity, and have a concrete
understanding of the money flows linked to this lucrative trade.
I cannot end, without addressing what is a well-known fact - that we are
experiencing a constantly evolving financial sector, among which is the
growing use of innovative financial products and services that have
undoubtedly changed our financial landscape.
However, while the use of financial technology has helped to enhance
efficiency, allowing access to finance for the broader community, this has
also brought about its fair share of risks and challenges. Aside of the well-
known cyber-security risks, we also have challenges relating to the
implementation of AML/CFT requirements, relating to new technological
innovations in payments and regulation.
Innovative financial services have given rise to an increasing number of
financial players, easing cross-border transactions, as well as providing
consumers greater flexibility and choice, causing the monitoring of
transactions to be more complex for financial institutions and public
authorities. There are also instances whereby regulatory authorities are
bypassed due to a lack of capacity and resources to monitor these
innovative payment channels.
It is therefore vital that work is undertaken to better understand the risks
and vulnerabilities of innovative financial services and ensure that while
we embrace innovation for economic growth, we also pursue responsible
innovation, and manage the risks of money laundering and terrorist
financing.
The local financial sector has not been left behind and has to some extent
experienced the 'Fintech' phenomenon, ranging from increased
use of
electronic payment methods such as mobile and internet banking, as well
as growing interest in cryptocurrencies. Given this growing interest in
Fintech in Seychelles, by consumers, the business community, as well as
financial institutions, the Central Bank is currently in the process of
engaging with relevant stakeholders to draft a national strategy on the
adoption of Fintech in the country. The strategy will be focussing on how
Fintech can effectively assist in the development of the financial sector,
while taking the associated risks into consideration.
It is imperative that we have close collaboration between key stakeholders
working to regulate the domestic financial sector, so that there is a
comprehensive understanding of the opportunities and challenges of such
developments, as such collaboration and synergies are crucial to
addressing any concerns or challenges, as soon as they arise.
As we further our discussions on the issue, let us explore the opportunities
that new financial and regulatory technologies may present for us to
improve the effective implementation of AML/CFT measures, in our
respective jurisdictions and in the region.
Seychelles is already embracing the potential of financial technologies,
and we are delighted that Council of Ministers has accepted our
nomination to host the ESAAMLG Workshop on Digital financial services,
Bureau de Change and Money remittances, which will be held next year.
Ladies and Gentlemen,
The reason we are gathered here is to engage in serious discussions and
come up with plausible solutions to the challenges we face in relation to
all three topics. There are surely success stories that exist in this room
which will go a long way in helping others to address their respective
situations.
Concerns about the risks that AML/CFT present to the stability of our
financial systems should be addressed collectively. Events like this are
therefore of utmost importance as it helps to bring all stakeholders
together under one roof, because as we are already aware the fight
against money laundering and terrorist financing cannot be achieved in
isolation.
Both the public and private sector need to become equal partners, as we
endeavour to make better use of our resources and expertise related to
this matter. This is not only true for our respective jurisdictions, but as a
regional grouping, it is also imperative that public and private sector
organisations throughout the ESAAMLG region work in partnership to
develop strategies for the exchange of expertise, and intelligence, to really
make an impact on addressing cross border money laundering and
terrorist financing concerns.
As I conclude, it is my sincere hope that we will leave no stones unturned
to achieve the objectives set at the inception of this very important event.
Yes, it is a very imperative for us as a country, as Seychelles is committed
to see the establishment of robust AML/CFT framework in our jurisdiction
and beyond. The development of our financial sectors and our reputation
depend on it.
I thank you for your undivided attention and look forward to the fruitful
deliberations tomorrow.