Financial Crime World

Fiji’s Anti-Money Laundering and Terrorist Financing Efforts Show Progress, but Gaps Remain

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Fiji has made significant strides in improving its anti-money laundering (AML) and combating the financing of terrorism (CFT) efforts, according to a recent report by the Asia-Pacific Group on Money Laundering (APG). However, despite showing progress, Fiji still faces several challenges that need to be addressed.

Effective Financial Intelligence Unit

The APG report highlights Fiji’s effective and transparent Financial Intelligence Unit (FIU), which plays a crucial role in identifying and investigating suspicious financial transactions. The FIU has been commended for its efforts in detecting and disrupting money laundering and terrorist financing activities.

Remaining Challenges

Despite these positive developments, Fiji still remains partially compliant with six of the 40 FATF recommendations related to AML/CFT. Specifically:

  • It has not implemented targeted financial sanctions related to terrorism and terrorist financing.
  • Adequate measures have not been taken to address transparency and beneficial ownership issues in relation to legal persons and arrangements.

European Union’s List of Non-Cooperative Tax Jurisdictions

Fiji has recently been added to the European Union’s list of non-cooperative tax jurisdictions, which is a major concern for the country. The EU’s criteria for inclusion on this list include:

  • Transparency
  • Fair tax competition
  • Commitment to the OECD’s Base Erosion and Profit Shifting (BEPS) minimum standards

Fiji was moved from the greylist to the blacklist after failing to comply with these criteria in a timely manner. According to the EU, Fiji has “harmful preferential tax regimes” that have not been abolished, which has led to concerns about its commitment to fair taxation and transparency.

Implications

The country’s inclusion on this list is likely to have significant implications for its economic relations with the EU and other countries. It may also lead to increased scrutiny of Fiji’s financial sector and potentially even sanctions.

Conclusion

While Fiji has made progress in improving its AML/CFT regime, it still faces several challenges that need to be addressed. The country must work to:

  • Implement targeted financial sanctions related to terrorism and terrorist financing.
  • Improve transparency and beneficial ownership issues.
  • Address its harmful preferential tax regimes.

Failure to address these challenges may lead to further reputational damage for Fiji.

Sources

  • APG (2019). Third Follow-Up Report: Mutual Evaluation of Fiji.
  • Council of the European Union. 2019. The EU list of non-cooperative jurisdictions for tax purposes.
  • Ministry of Justice. 2016. Fiji Money Laundering and Financing of Terrorism National Risk Assessment.

Contact

helpdesk@u4.no for more information or to request a copy of the full report.