NAURU’S TROUBLED FINANCIAL PAST: BLACKLISTED BANKS STILL OPERATING DECADES LATER

Warning Issued by International Chamber of Commerce’s Financial Investigation Bureau (FIB)

The International Chamber of Commerce’s Financial Investigation Bureau (FIB) has issued a warning that several Nauru-registered banks, blacklisted by the US Department of the Treasury in 2002, are still operating and attempting to disguise their origins.

Background: Money Laundering Concerns

In 2002, Nauru was designated a money laundering concern, leading to a prohibition on financial dealings between US institutions and any Nauru-licensed institution. This ban followed the introduction of the USA Patriot Act in October 2001, which targeted offshore banks with no physical or legal residence elsewhere in the world.

Current Situation: Blacklisted Banks Still Operating

Since then, all US financial institutions have been disallowed from opening or maintaining accounts for foreign financial institutions involving Nauru or any institution licensed by Nauru, with the exception of the Bank of Nauru, which serves as the Central Bank. However, FIB Assistant Director Jon Merrett has expressed concern that some banks may be unwittingly trading with or maintaining correspondent relationships with blacklisted Nauru financial institutions.

Potential Risks and Consequences

• US banks may fail to realise they are dealing with a Nauru bank on the US treasury list.
• The names of the blacklisted banks can be confusingly similar to credible banks, making it an easy trap for financial institutions to fall into.
• Given the penalties for trading with discredited financial institutions, FIB strongly recommends taking steps to find out exactly who you are dealing with.

FIB’s Offer: Clarification and Protective Measures

To avoid confusion and reduce the risk of inadvertently compromising compliance obligations, FIB is offering a service where concerned financial institutions can contact them for clarification. The bureau has catalogued a complete list of all Nauru banks and financial institutions named by the US Department of the Treasury, and can offer protective measures such as tracking assets and exiting correspondent relationships.

How to Contact FIB

Financial institutions seeking to take advantage of this service should email fib@icc-ccs.org for full details.