Financial Crime World

AML/CFT Framework in the Marshall Islands

Legislative and Regulatory Framework

The Republic of the Marshall Islands (RMI) has implemented various legislative and regulatory frameworks to address money laundering (ML) and financing of terrorism (FT). The RMI has introduced legislation and an inwards passenger declaration requirement since August 2009. Customs needs to undertake more work before meeting the requirements set down in the Customs Declaration Act.

Company Law

The RMI’s Association Law provides the legal framework for the establishment and operation of domestic and non-resident corporations, partnerships, limited partnerships, limited liability companies, foreign maritime entities, and foreign corporations authorized to do business in the RMI. There are two Registrars:

  • Resident Entities: The Attorney General is responsible for registering resident entities.
  • Non-Resident Entities: The Trust Company of the Marshall Islands (TCMI) is responsible for registering non-resident entities.

Trust Law

The formation of trusts in the RMI is governed by the Trust Act of 1994 and the Trust Companies Act of 1994. However, since its formation, the Marshall Islands Trust Company has been inactive and has not accepted any applications for trusts. The law on trusts remains valid but unutilized.

Non-Profit Organization Law

The non-profit organization sector is primarily governed by the Non-Profit Corporations Act, Cooperatives Act, and Counter Terrorism Act. The Registrar of Corporations is responsible for registering and filing NPOs in the RMI, but due to staffing constraints, there is minimal supervision of the sector’s 100 registered NPOs.

AML/CFT Measures

The RMI has set out comprehensive AML/CFT preventative measures for the financial sector primarily through Part XIII of the Banking Act and the revised AML Regulations. Formal advisory notices under the Act are occasionally issued by the Banking Commissioner, and non-binding guidance is also issued from time to time. Certain advisory notices have the effect of “Other Enforceable Means.”