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Brunei Darussalam’s Anti-Money Laundering and Counter-Terrorist Financing Measures: A Work in Progress

Brunei Darussalam has made significant strides in combating money laundering (ML) and terrorist financing (TF), but there is still work to be done.

Challenges Remain

In a recent assessment, Brunei’s authorities were commended for their good interagency cooperation and coordination on ML/TF matters, as well as their efforts to develop draft legislation to combat proliferation financing. However, challenges remain in operational coordination, particularly with regards to beneficial ownership of companies and financial intelligence sharing.

Financial Intelligence Unit (FIU)

The FIU has made progress in analyzing financial intelligence and producing high-quality reports, but could benefit from further human resources and access to more comprehensive cash and bearer negotiable instruments reporting at the border.

Law Enforcement Agencies (LEAs)

The assessment also highlighted the need for Brunei’s LEAs to build capacity and experience in investigating and prosecuting ML/TF cases. While no TF investigations, prosecutions or convictions have been reported to date, the authorities’ institutional structures and procedures are generally adequate for an appropriate response should a TF case arise.

Terrorist Financing

In terms of terrorist financing, Brunei authorities place a high priority on combating terrorism and allocate significant resources to identify and mitigate TF threats. The country’s preventive strategy relies heavily on background intelligence work and other measures to address emerging issues early.

Areas for Improvement

While Brunei has made progress in implementing its legal and operational frameworks for ML/TF, there are still areas that require improvement. For example, the country is yet to issue a legal framework for proliferation financing and conduct outreach or guide reporting entities (REs) on the pending TF-related requirements.

Conclusion

In conclusion, while Brunei Darussalam has made significant progress in combating ML/TF, there is still work to be done to strengthen its regulatory frameworks, build capacity and experience among law enforcement agencies, and improve operational coordination. The country’s authorities are committed to continuing their efforts to combat money laundering and terrorist financing, and the international community can expect further progress in the coming years.

Recommendations

• Strengthen Regulatory Frameworks: Enhance ML/TF regulations to ensure effective implementation and enforcement.
• Build Capacity and Experience among Law Enforcement Agencies: Provide training and resources for LEAs to investigate and prosecute ML/TF cases effectively.
• Improve Operational Coordination and Information Sharing: Enhance cooperation between agencies and sharing of financial intelligence to combat ML/TF.
• Develop a Comprehensive Framework for Virtual Asset Service Providers (VASPs): Include VASPs in the regulatory framework to prevent their use for ML/TF.
• Conduct Outreach and Guide Reporting Entities on Pending TF-Related Requirements: Provide guidance to reporting entities on pending TF-related requirements to ensure compliance.
• Continue to Strengthen Preventive Measures: Implement risk-based supervision of reporting entities and customer due diligence to prevent ML/TF.

By implementing these recommendations, Brunei Darussalam can continue to demonstrate its commitment to combating money laundering and terrorist financing, and contribute to a safer and more stable global financial system.