Financial Crime World

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Palau’s AML Regulations: A Global Comparison

A recent evaluation of Palau’s anti-money laundering (AML) regulations has revealed a mixed bag of compliance with global standards. According to the Financial Action Task Force (FATF), Palau’s implementation of the technical requirements of its recommendations is varied across different areas.

Risk Assessment and Risk-Based Approach

Palau has been found to be partially compliant (PC) in assessing risk and applying a risk-based approach, with room for improvement in this area.

  • Assessing risk: PC
  • Applying a risk-based approach: Room for improvement

National Cooperation and Coordination

The country has made significant strides in national cooperation and coordination, earning a largely compliant (LC) rating.

  • National cooperation: LC
  • Coordination: LC

Money Laundering Offence and Confiscation

Palau’s laws regarding money laundering offence and confiscation have been deemed largely compliant (LC).

  • Money laundering offence: LC
  • Confiscation: LC

Terrorist Financing Offence

In contrast, the country’s regulation of terrorist financing offence has been rated partially compliant (PC).

  • Terrorist financing offence: PC

Financial Sanctions and International Cooperation

Palau has been found to be non-compliant (NC) in implementing targeted financial sanctions related to terrorism and proliferation, as well as in its mutual legal assistance and extradition arrangements.

  • Targeted financial sanctions: NC
  • Mutual legal assistance and extradition: NC

Other Areas of Compliance

The country has also received ratings of compliant (C), largely compliant (LC), and partially compliant (PC) in various other areas, including:

  • Customer due diligence: C
  • Record keeping: LC
  • Internal controls: PC

Conclusion

Overall, Palau’s AML regulations show signs of improvement but still require significant work to meet global standards. The FATF evaluation serves as a wake-up call for the country to strengthen its regulatory framework and ensure that it is better equipped to combat money laundering and terrorist financing.