Fiji’s Anti-Money Laundering and Financing of Terrorism Program Faces Urgent Concerns

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A recent national risk assessment (NRA) has identified significant areas of concern in Fiji’s anti-money laundering and combating the financing of terrorism (AML/CFT) program. The report, conducted by the National AML Council on behalf of the Financial Intelligence Unit, highlights the country’s vulnerability to money laundering and terrorist financing.

Urgent Concerns

The assessment found that while Fiji has a good foundation for its AML/CFT program, there are four areas of urgent concern that need immediate attention:

• Cash Economy: The cash economy creates opportunities for illegal activities, making it an area of high risk.
• Supervision of Financial Institutions: Limited supervision in some cases poses a threat to the effectiveness of the AML/CFT program.
• Technical Resources: Insufficient technical resources, including the ability to detect and prevent illicit transactions, hinder the program’s effectiveness.
• Financing of Terrorism: This high-risk area globally requires urgent attention to ensure Fiji’s financial stability.

Banking Sector Vulnerability

The report notes that the Fijian banking sector is particularly vulnerable to money laundering and terrorist financing, with a significant portion of risks borne by banks. While the Reserve Bank of Fiji’s supervision capabilities help mitigate these risks, more needs to be done to address the concerns.

Coordination and Cooperation

The assessment emphasizes the importance of coordination between agencies and task forces to effectively combat ML/FT. However, it notes that some task forces may be overly onerous on agencies, which could hinder their effectiveness.

Recommendations

To address these concerns, the report recommends:

• Implementing strategies to identify and mitigate ML/FT risks in high-risk areas
• Increasing transparency and cooperation between financial institutions and regulatory bodies

Future Assessments

The NRA also emphasizes the need for a more comprehensive assessment of ML/FT risk over the next few years. To achieve this, additional statistical and other data will be required, which should be collected and analyzed immediately.

The National AML Council has committed to reviewing the NRA every 12 months, updating and amending it as necessary, and conducting another comprehensive assessment within two to five years.

Conclusion

While Fiji’s AML/CFT program has a good foundation, it is essential that urgent attention is given to these areas of concern to minimize ML/FT risks and ensure the country’s financial stability.