Fiji’s Financial Sector at High Risk of Money Laundering and Terrorism Financing

A recent national risk assessment has revealed that Fiji’s commercial banks are highly vulnerable to money laundering and terrorism financing (ML/FT). The sector is followed by licensed foreign exchange dealers and safe custody facilities, which are also considered high-risk areas.

Overview of the Assessment

The assessment was conducted between May 2014 and May 2015 and found that several other sectors in Fiji were at medium or low levels of vulnerability to ML/FT. However, the overall risk posed by these sectors is still significant, with the banking sector bearing a substantial portion of the risk.

Urgent Concerns

The assessment identified four urgent concerns:

• The cash economy: Fiji’s reliance on cash transactions makes it difficult to track and monitor financial flows.
• Supervision of financial institutions: The Reserve Bank of Fiji faces challenges in detecting and preventing ML/FT activities due to limited resources and inadequate supervision.
• Technical resources: The country lacks sufficient technical expertise and resources to effectively identify and prevent ML/FT activities.
• Financing of terrorism: There is a risk that terrorists may use Fijian financial institutions to fund their activities.

Recommendations

To mitigate these risks, the assessment recommends:

• Strengthening the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) program through legislative reforms.
• Improving technical resources, including training for law enforcement agencies and financial institutions.
• Enhancing coordination among agencies to share information and best practices.

Conclusion

The report concludes that while Fiji has a good foundation for an effective AML/CFT program, it is crucial to ensure that the country’s financial sector remains vigilant in detecting and preventing ML/FT activities. Failure to do so could have serious consequences for the country’s economy and national security.

Contact Information

For inquiries regarding the Fiji ML/FT NRA Report, please contact:

• The Secretariat of the National Anti-Money Laundering Council
• Fiji Financial Intelligence Unit
  • Tower 5, Reserve Bank of Fiji Building
  • Pratt Street, Suva, Fiji
  • Phone: +679 322 3333
  • Web site: www.fijifiu.gov.fj

Disclaimer

This article is based on a national risk assessment conducted by the National AML Council. The information and statistics presented in this report are accurate as of June 2015 and may not reflect current circumstances.