Financial Crime World

APG Endorses Assessment Report on Palau’s AML/CFT Efforts

Bali, Indonesia - July 11, 2008: The Asia-Pacific Group (APG) has endorsed the assessment report on Palau’s anti-money laundering and combating the financing of terrorism (AML/CFT) efforts, which was conducted during a plenary meeting in Bali, Indonesia.

Assessment Highlights

The assessors would like to express their gratitude to the Palauan authorities for their excellent assistance, cooperation, and hospitality throughout the assessment mission.

Key Findings

Palau has strengthened its AML/CFT legislative framework since 2001, with amendments to the Money Laundering and Proceeds of Crime Act of 2001 (MLPCA) and the Financial Institutions Act of 2001 (FIA). However, despite having a solid legal foundation, there is still insufficient implementation. The authorities must now expedite the implementation of these laws.

  • Only about half of the twenty FATF-designated categories of predicate offenses are covered by the money laundering offense.
  • The freezing of terrorist assets under UN Security Council Resolutions (UNSCRs) 1267 and 1373 is not adequately addressed.

Recommendations

To improve its AML/CFT efforts, Palau should:

  • Expedite the implementation of the amended MLPCA and FIA.
  • Ensure that the offense of money laundering covers all twenty FATF-designated categories of predicate offenses.
  • Strengthen provisional measures to seize evidence and property, freeze capital and financial transactions, and identify and trace property related to terrorist financing.
  • Enhance the resources of the Financial Intelligence Unit (FIU) to enable it to carry out its functions effectively.
  • Develop a documented standard operating procedure for STR analysis and dissemination.

Conclusion

The APG assessment report highlights the importance of implementing Palau’s AML/CFT laws and strengthening its institutional measures to combat money laundering and terrorist financing. With dedicated resources and improved implementation, Palau can better protect its financial sector from misuse and fulfill its international obligations.

About APG

Note: The Asia-Pacific Group (APG) is a regional organization that aims to promote cooperation among its member countries in the fight against money laundering and terrorist financing.