Financial Crime World

Fiji’s Financial Sector Exposed to Money Laundering and Financing of Terrorism Risks

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A recent national risk assessment (NRA) has revealed that Fiji’s commercial banks, licensed foreign exchange dealers, and safe custody facilities are highly vulnerable to money laundering (ML) and financing of terrorism (FT).

National Risk Assessment Report Highlights

According to the NRA report, while some sectors were found to be less vulnerable, several others posed a medium or low level of ML/FT risk. The assessment highlighted the need for legislative reform and strengthening of anti-money laundering and combating the financing of terrorism (AML/CFT) measures.

Banking Sector Vulnerabilities

The Reserve Bank of Fiji, as the highest capacity supervisor, plays a crucial role in mitigating risks in the financial sector. However, the report noted that the banking sector remains highly vulnerable to ML/FT, particularly with regards to illicit cash and electronic funds.

Opportunities for Money Laundering and Financing of Terrorism

Fiji’s open economy and reliance on international funds have created opportunities for ML/FT, while vulnerabilities within money transmission services and money changer businesses provide channels for placement and movement of cash proceeds. The risk of cash proceeds being carried into Fiji and layered through real estate deals is also particularly high.

Areas of Urgent Concern

The report identified four areas of urgent concern:

  • Cash Economy: Opportunities for ML/FT in the cash economy
  • Supervision of Financial Institutions: Vulnerabilities in supervision of financial institutions
  • Technical Resources: Insufficient technical resources and analytical capacity to support intelligence gathering
  • Financing of Terrorism: Global risks and vulnerabilities in financing of terrorism

Strategies to Address Concerns

Strategies have been proposed to address these concerns and minimize ML/FT risks.

Key Recommendations

  1. Implement Legislative Reforms: Strengthen the AML/CFT program through legislative reforms
  2. Enhance Technical Resources: Improve technical resources and analytical capacity to support intelligence gathering
  3. Improve Supervision of Financial Institutions: Enhance supervision of financial institutions, particularly in high-risk areas
  4. Address Vulnerabilities within Money Transmission Services and Money Changer Businesses: Address vulnerabilities in money transmission services and money changer businesses
  5. Develop a Comprehensive NRA: Develop a more comprehensive NRA over the next few years

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