Financial Crime World

Nauru’s Banking Requirements and Anti-Money Laundering Policy

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The Republic of Nauru has introduced a new anti-money laundering legislation, the AML-TFS Act 2023, which requires financial institutions to comply with strict regulations. To operate in Nauru, banks must obtain a license from the Registrar of Banks under the Banking Act 1975 and register as a business name, corporation, partnership, or trust.

Key Requirements

License and Registration

  • Obtain a license from the Registrar of Banks under the Banking Act 1975.
  • Register as a business name, corporation, partnership, or trust with the relevant authorities.

Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) Policy

  • Implement an AML-CFT policy that complies with international standards.
  • Conduct customer due diligence on all customers, including Politically Exposed Persons (PEPs).
  • Report suspicious transactions to the Nauru Financial Intelligence Unit (FIU).

Agencies Involved

Regulatory Bodies

  • 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 Organizations

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

Compliance with International Standards

Nauru has adopted the Basel Principles through its banking laws to ensure transparency and accountability. Although Nauru is not a member of the IAIS or IOSC, it is committed to adopting standards and principles from these organizations if they are relevant and beneficial for Nauru.

Conclusion

Financial institutions play a crucial role in any society, contributing to economic development and providing many benefits. However, they are also vulnerable to illegal activities such as money laundering and terrorist financing. The AML-TFS Act 2023 and the accompanying policy aim to prevent these contravening acts by requiring financial institutions to comply with strict regulations.

Contact Information

For further information regarding this Policy, contact: