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Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Policy
Key Objectives
The primary objectives of this policy are to prevent and detect money laundering and terrorist financing activities, while ensuring that financial institutions comply with their AML/CFT obligations.
Prevention and Detection of Money Laundering and Terrorist Financing Activities
- To prevent the use of financial systems for illicit purposes
- To detect suspicious transactions and report them to the relevant authorities
Sanctions
Financial Institutions must be aware of their AML/CFT obligations under Part 4 of the AML-TFS Act 2023. Failure to comply may result in penalties, including:
- Up to $200,000 or 2 years imprisonment, or both for an individual
- Up to $1,000,000 for a body corporate
Senior Management Liability
Directors and other members of senior management may be held liable for an offence if they have actual knowledge or reckless disregard of the act or omission constituting the offence. A person is considered part of senior management if they hold key positions such as directors or employees responsible for overseeing the entity’s proper conduct.
Agencies Involved
The following agencies are involved in enforcing this policy:
- Minister for Finance
- Registrar of Banks
- Nauru Financial Intelligence Unit (FIU)
- Registrars of Business Names, Corporations, Partnerships or Trusts
- Authority established under Beneficial Ownership Act 2017
Basel Committee on Banking Supervision Principles
Nauru’s position on the application of Basel Principles to banks operating in Nauru is provided for under Section 7(1)(a)(iii) of the Banking Act 1975.
International Association of Insurance Supervisors (IAIS) and International Organisation of Securities Commissions (IOSC)
Although Nauru is not a member of IAIS or IOSC, it remains committed to upholding their principles if service providers for securities set up business in Nauru.
Conclusion
The AML/CFT Policy aims to protect Nauru and its citizens from the effects of money laundering and terrorist financing activities. Financial institutions must comply with the requirements of the law to detect and prevent contravening acts leading to money laundering and terrorist financing.
Overall, this policy document emphasizes the importance of compliance with AML/CFT obligations for financial institutions in Nauru, and highlights the potential consequences of non-compliance.