Vanuatu Strengthening Anti-Money Laundering and Combating the Financing of Terrorism Measures

Notice to Licensees and Reporting Entities

The Director of Vanuatu Financial Intelligence Unit (VFIU) has issued a notice to all licensees and reporting entities under the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Act. The notice highlights changes in associate ownership and circumstances that may affect their fit and proper status.

On-Site Inspections

The amended section 23B of the Casino Control Act now allows the Director to conduct on-site inspections at casinos operated by licensees during normal business hours. Penalties will be imposed for obstructing the Director or providing false or misleading information or documents.

Licensing Powers

The Director has been empowered to issue directions, suspend or cancel licenses in the public interest. Section 10(1) of the Casino Control Act allows for suspension or cancellation of a license if a licensee no longer meets the fit and proper criteria prescribed by regulations.

AML/CFT Supervision

The VFIU is responsible for AML/CFT supervision of casinos, online betting, gaming, and lottery licensees. The Director has held meetings with casino operators and received copies of their AML/CFT procedures. While Vanuatu has conducted on-site inspections at three casino operators in 2015, engagement with online betting, gaming, and lottery licensees is limited.

Risk-Based Supervision

The VFIU adopts a risk-sensitive approach to determine the frequency and intensity of AML/CFT supervision based on its understanding of Vanuatu’s money laundering and terrorist financing risks. The Director will assess the adequacy of AML/CFT internal controls, policies, and procedures of reporting entities.

Conclusion

Vanuatu has strengthened its market entry requirements with amendments to the Casino Control Act, AML/CFT Act, and TCSP Act, amongst others. While some gaps remain in AML/CFT supervision, particularly for casinos and similar entities, the Director’s powers are wide-ranging, including administrative and criminal penalties.

Compliance with FATF Recommendations

Vanuatu’s compliance with Financial Action Task Force (FATF) Recommendations is largely satisfactory, with some areas requiring improvement. The VFIU needs to demonstrate actual AML/CFT onsite monitoring and supervision of casinos and other DNFBPs, while deeper strategic analysis is required.

Table 2: Compliance with FATF Recommendations

Note: Table 2 can be found in Annex II.