Financial Crime World

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Fiji’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Program

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Fiji has a good foundation for an Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) program. The program includes necessary legislation, operational supervisors, investigated cases, and court penalties.

Areas of Concern

However, there are areas that need urgent attention:

1. Cash Economy

  • Lack of transparency in cash transactions makes it difficult to track and monitor suspicious activities.
  • A significant portion of the economy is still based on cash, creating opportunities for money laundering.

2. Supervision of Financial Institutions

  • Insufficient supervision of financial institutions allows for potential vulnerabilities to be exploited by ML/FT actors.
  • Weak oversight enables money launderers to operate undetected.

3. Technical Resources

  • Limited technical resources hinder the effectiveness of AML/CFT efforts, making it challenging to detect and prevent ML/FT activities.
  • Insufficient IT infrastructure and software capabilities hinder the ability to analyze and identify suspicious transactions.

4. Financing of Terrorism

  • Fiji is at high risk for financing terrorism due to its geographical location and proximity to countries with known terrorist networks.
  • The country’s vulnerability to financial flows from these regions creates a significant threat.

Money Laundering/Financing of Terrorism (ML/FT) Risks

The Fijian banking sector bears a significant portion of ML/FT risks, particularly in money transmission services and money changer businesses. These channels create opportunities for placement and movement of cash proceeds, making it challenging to track and monitor suspicious activities.

National Risk Assessment (NRA) Report

A National Risk Assessment (NRA) report was conducted between May 2014 and May 2015 on behalf of the National AML Council. The report identifies areas of ML/FT risks and strategies for addressing them.

Recommendations

  • Conduct a thorough NRA in the next few years, incorporating additional statistical and other data collection and analysis.
  • Review and update the current NRA within 12 months.

Action Plan

Immediate attention should be given to the four areas of urgent concern (cash economy, supervision of financial institutions, technical resources, and financing of Terrorism). Strategies identified for each area should be implemented to minimize ML/FT risks.

Key Objectives

  • Implement strategies to address cash economy vulnerabilities.
  • Enhance supervision of financial institutions.
  • Develop and strengthen technical resources.
  • Address the high risk of financing terrorism.

Timeline

  • Review and update NRA within 12 months.
  • Conduct a further NRA within 2-5 years.