Financial Crime World

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AML and CFT Regulatory Requirements Come Under Close Scrutiny in Palau

Palau has taken significant steps to strengthen its financial system by establishing a robust Financial Intelligence Unit (FIU) to oversee anti-money laundering and counter-terrorism financing (AML/CFT) regulations. The FIU, set up in 2001, has undergone changes over the years, with the latest amendment in 2014 making it an independent agency.

Mandate of the FIU

As part of its mandate, the FIU is responsible for:

  • Investigating suspected proceeds of crime and terrorist property
  • Ensuring that financial institutions and designated non-financial businesses and professions (DNFBPs) comply with AML/CFT requirements
  • DNFBPs include attorneys, high-value dealers, real estate agents, and other sectors

Palau’s efforts to combat money laundering and terrorism financing are driven by its membership in the Asia/Pacific Group (APG), a regional body that works towards implementing Financial Action Task Force (FATF) recommendations. The FIU actively supports Palau’s bid to comply with international AML/CFT norms.

Leadership of the FIU

The FIU is headed by a Director appointed by the Governing Board of the Financial Institutions Commission, and supported by:

  • Senior Intelligence Analyst
  • Administrative Specialist

Strategic Planning

In September 2022, the FIU and the Governing Board of the FIC embarked on a strategic planning retreat, which culminated in the adoption of the Palau FIU Strategic Plan FY 2023-2028 in April 2023. The plan outlines the agency’s vision and objectives for the next five years.

Commitment to AML/CFT Regulations

The FIU’s commitment to AML/CFT regulations is expected to:

  • Enhance Palau’s reputation as a responsible financial player
  • Protect its financial system from illicit activities

By strengthening its regulatory requirements, Palau aims to maintain a robust financial system that complies with international standards and safeguards against money laundering and terrorism financing.