Financial Crime World

Title: APG’s Concerns Over Vanuatu’s AML/CFT Compliance: Key Deficiencies and Urgent Actions

The Asia-Pacific Group on Money Laundering (APG), a regional body committed to fighting money laundering and terrorist financing, has expressed concerns over Vanuatu’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) compliance following the latest evaluation report. This article provides insights into the key deficiencies identified by the APG and the urgent actions needed.

APG’s Concerns over Vanuatu’s AML/CFT System

The Asia-Pacific Group on Money Laundering (APG)’s updated statement source highlights the ongoing concerns about Vanuatu’s AML/CFT system. Although the statement does not represent an official endorsement from the Financial Action Task Force (FATF), it sheds light on the critical issues related to Vanuatu’s AML/CFT system, which countries and the private sector should consider while implementing risk-based approaches.

Key Deficiencies in Vanuatu’s AML/CFT System

The latest evaluation report, adopted by the APG membership in July 2015, has disclosed several significant deficiencies in Vanuatu’s AML/CFT system. Some of the key technical compliance deficiencies are noted below:

Criminalization of Money Laundering and Terrorist Financing

  1. Weak legislation: Vanuatu lacks adequate legislation effectively criminalizing money laundering and terrorist financing.

Implementation of United Nations resolution for targeted financial sanctions

  1. Insufficient measures: Vanuatu has not adequately implemented measures to comply with relevant United Nations resolutions against terrorists, raising concerns regarding terrorism financing.

Customer Due Diligence (CDD)

  1. Insufficient measures: The country’s Customer Due Diligence (CDD) measures remain insufficient, potentially leaving money laundering and terrorist financing activities unchecked.

Supervisory Frameworks

  1. Ineffective frameworks: The supervisory frameworks for financial institutions and designated non-financial businesses and professions require significant improvements to effectively tackle AML/CFT risks.

Urgent Actions Needed

The APG strongly urges Vanuatu to intensify efforts to address these deficiencies and improve its overall AML/CFT system’s effectiveness. The public statement will remain in place until these issues are substantially rectified, as determined by the APG membership through their peer monitoring and follow-up process.

Past and Recent Developments

  1. AML/CTF Act and regulations: Vanuatu enacted and implemented the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act and regulations in June 2014, which addressed some but not all of the CDD-related deficiencies.
  2. Amendments to the Proceeds of Crime Act and Counter Terrorism and Transnational Organized Crime Act: In January 2015, Vanuatu made amendments to the Proceeds of Crime Act and the Counter Terrorism and Transnational Organized Crime Act. Unfortunately, these amendments did not adequately tackle the deficiencies concerning the criminalization of money laundering and terrorist financing.
  3. Low levels of effectiveness: The APG’s third mutual evaluation report [source](https://www.apgmultilat.org/sites/default/files/2017-04/Vanuatu-3rd_Mutual_ Evaluation_Report.pdf) reflects low levels of effectiveness across all of the FATF’s 11 Immediate Outcomes.
  4. Referral to the FATF’s International Cooperation Review Group: In response to these deficiencies, the APG membership recently referred Vanuatu to the FATF’s International Cooperation Review Group for further action and scrutiny. source

For more information on the APG and AML/CFT, please visit their official website.