Financial Crime World

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Vanuatu’s Efforts in Combating Money Laundering and Terrorist Financing: A Review

PORT VILA, VANUATU - The Republic of Vanuatu has made significant strides in combating money laundering and terrorist financing, but there are still areas that require improvement.

International Conventions and Legislation

Vanuatu has ratified several international conventions, including:

  • The Palermo Convention
  • The International Convention for the Suppression of the Financing of Terrorism

The country’s legislation also covers the key elements of money laundering, including:

Definition of “Property” and “Proceeds of Crime”

However, there is a lack of awareness and understanding among law enforcement agencies about the relevant provisions and their application in practice.

Challenges and Limitations

  • No records or statistics of any proceeds having been seized or confiscated
  • Poor resources and no implementation planning to promote new legislation or provide guidance

Key Agencies Involved

Vanuatu Financial Intelligence Unit (VFIU)

Established in 2000, the VFIU is responsible for:

  • Receiving and requesting Suspicious Transaction Reports (STRs)
  • Other relevant matters related to money laundering and terrorist financing

However, the review found that the level of implementation is ineffective due to poor resources and no implementation planning.

Vanuatu Police Department and Public Prosecutions Office (PPO)

The Vanuatu Police Department and PPO are responsible for:

  • Investigating money laundering and terrorist financing offenses
  • Prosecuting these offenses

Areas for Improvement

Cross-Border Currency Movement

Vanuatu does not yet have a system to track cross-border currency movement or implement cross-border currency legislation.

Special Investigative Techniques

There is no evidence that special investigative techniques such as controlled deliveries or undercover operations have ever been used in Vanuatu.

Supervision and Regulation of Financial Services Sector

The Reserve Bank of Vanuatu (RBV), the Vanuatu Financial Services Commission (VFSC) and the Customs and Revenue Branch of the Ministry of Finance are responsible for supervising and regulating the financial services sector. However, the review found that the VFSC is not empowered yet to issue comprehensive guidelines or regulate the financial sectors it has responsibility for.

Conclusion

While Vanuatu has made significant strides in combating money laundering and terrorist financing, there are still areas that require improvement. The country needs to strengthen its institutional framework, enhance the capacity of law enforcement agencies, and improve the implementation of legislation to effectively combat these crimes.

Recommendations

  • Strengthen the institutional framework by establishing a centralized body responsible for coordinating anti-money laundering and anti-terrorist financing efforts.
  • Enhance the capacity of law enforcement agencies through training and resource allocation.
  • Improve the implementation of legislation by providing guidance and support to law enforcement agencies and financial institutions.
  • Establish a system to track cross-border currency movement and implement cross-border currency legislation.
  • Introduce special investigative techniques such as controlled deliveries or undercover operations to combat money laundering and terrorist financing.

By implementing these recommendations, Vanuatu can effectively combat money laundering and terrorist financing, protect its financial system, and maintain the trust of international partners.