Financial Crime World

Mutual Evaluation Report: Republic of the Marshall Islands

Introduction

This Mutual Evaluation Report (MER) assesses the Republic of the Marshall Islands’ (RMI) compliance with the Financial Action Task Force (FATF) Recommendations, which aim to prevent money laundering and terrorist financing.

Areas of Assessment

The report covers several key areas:

Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) policies

  • The RMI has a comprehensive AML/CFT framework in place, with legislation and regulations that cover all types of financial institutions.
  • However, there are concerns about the effectiveness of enforcement and supervision.

Financial Intelligence Unit (FIU)

  • The RMI has a designated FIU, which is responsible for receiving, analyzing, and disseminating financial intelligence.
  • However, there are concerns about the FIU’s resources and capacity to effectively perform its functions.

Regulation of Financial Institutions

  • The RMI has a comprehensive regulatory framework in place, with requirements for customer due diligence, record-keeping, and reporting suspicious transactions.
  • However, there are concerns about the effectiveness of enforcement and supervision.
  • The RMI has legislation that governs the creation and operation of companies, partnerships, trusts, and other legal entities.
  • However, there are concerns about the lack of transparency in beneficial ownership and the use of bearer shares.

Preventive Measures—Financial Institutions

  • The RMI has comprehensive AML/CFT preventive measures in place for the financial sector.
  • However, there are concerns about the effectiveness of enforcement and supervision.

Recommendations

The report highlights several areas where the RMI needs to improve its compliance with FATF Recommendations:

Key Areas for Improvement

  1. Strengthening enforcement and supervision
  2. Improving transparency in beneficial ownership
  3. Enhancing customer due diligence requirements
  4. Increasing resources for the FIU
  5. Implementing measures to prevent misuse of bearer shares

Conclusion

Overall, the report concludes that while the RMI has made progress in implementing AML/CFT policies and procedures, there are still significant challenges to be addressed to ensure effective compliance with FATF Recommendations.