Financial Crime World

Outdated AML/CFT Framework: Brunei Moves Forward with Interim Plan

Brunei’s anti-money laundering (AML) and counter-terrorism financing (CFT) framework has been deemed outdated by international authorities. Despite improvements in interagency cooperation, policy coordination remains a challenge.

Challenges with the Current Framework

Outdated legal and regulatory frameworks are a major obstacle to effective AML/CFT measures. This lack of clarity hinders law enforcement agencies’ ability to take action against money laundering and terrorist financing activities.

Access to Beneficial Ownership Information

Limited access to beneficial ownership information is another significant challenge. This makes it difficult for the Financial Intelligence Unit (FIU) to conduct thorough investigations and prevent financial crimes.

Resources for FIU Analysts

Insufficient resources for FIU analysts limit their ability to produce high-quality analysis reports, which are essential for identifying and preventing money laundering and terrorist financing activities.

Over-Reliance on Customer Disclosure

Over-reliance on customer disclosure for designated non-financial businesses and professions (DNFBPs) is another challenge. This approach is not effective in detecting complex financial crimes.

Lack of Implementation for Proliferation Financing

The lack of implementation for proliferation financing remains a concern, despite the country’s legal and operational frameworks being generally sound.

Interim Plan

To address these challenges, Brunei has developed an interim plan that aims to:

  • Conduct a comprehensive review of its AML/CFT framework
  • Strengthen access to beneficial ownership information
  • Increase resources for FIU analysts
  • Improve risk-based supervision of DNFBPs
  • Implement measures to combat proliferation financing

The interim plan is expected to be completed within the next 12 months, with a comprehensive review of Brunei’s AML/CFT framework set to follow.

Timeline

  • Interim plan completion: Within the next 12 months
  • Comprehensive review of AML/CFT framework: To be completed within 24 months

The international community will be closely monitoring Brunei’s progress on this issue. The country’s commitment to improving its AML/CFT regime is crucial for maintaining financial stability and combating global threats such as money laundering and terrorist financing.