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Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Policy for Financial Institutions in Nauru

Key Objectives

The primary objectives of this policy are to:

  • Prevent and combat money laundering and terrorist financing
  • Ensure compliance with international standards and best practices

Key Definitions

Shell Banks

  • Permitted to operate in Nauru, but must comply with AML/CFT regulations
  • Must meet the requirements set out in the Anti-Money Laundering and Counter-Terrorist Financing Act 2018

Senior Management

  • Includes directors and key employees who oversee the entity’s proper conduct
  • Responsible for ensuring compliance with AML/CFT regulations

AML/CFT Obligations

Financial institutions must:

  • Report suspicious transactions to the Nauru Financial Intelligence Unit (FIU)
  • Comply with customer due diligence requirements
  • Failure to comply can result in penalties of up to $200,000 or 2 years imprisonment for individuals, or $1,000,000 for body corporates

Senior Management Liability

Directors and senior management may be held liable for offences committed by the entity if they had:

  • Actual knowledge of the offence
  • Reckless disregard for the offence
  • Given authority, permission, or consent to acts that constitute an offence

Agencies Involved in Implementing the Policy

The following agencies are involved in implementing this policy:

  • Minister for Finance
  • Registrar of Banks
  • Nauru Financial Intelligence Unit (FIU)
  • Registrars of Business Names, Corporations, Partnerships, or Trusts
  • Authority established under Beneficial Ownership Act 2017

International Cooperation

Nauru is not a member of the following international organizations:

  • Basel Committee on Banking Supervision Principles (Basel Principles)
  • International Association of Insurance Supervisors (IAIS)
  • International Organisation of Securities Commissions (IOSC)

However, Nauru will adopt international standards and principles through laws developed to regulate financial institutions in Nauru.

Conclusion

The AML/CFT policy is designed to prevent and combat money laundering and terrorist financing in Nauru. Financial institutions must comply with the requirements of the law to detect and prevent contravening acts.

Contact Details

For further information, please contact: