Fiji’s Financial Sector Faces High Risk of Money Laundering and Terror Financing
A recent National Risk Assessment (NRA) has identified significant vulnerabilities in Fiji’s financial sector, making it highly susceptible to money laundering (ML) and financing of terrorism (FT).
Vulnerabilities in the Financial Sector
The NRA found that commercial banks were particularly vulnerable to ML/FT risks, along with licensed foreign exchange dealers and safe custody facilities. While other sectors such as real estate and insurance posed a medium or low risk, the report emphasized that ML/FT risks are present across all industries.
Need for Legislative Reform
The report highlighted the need for significant legislative reform to strengthen Fiji’s Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) program. Although laws are generally adequate, some amendments are required to ensure agencies have the necessary powers to detect and deter ML/FT.
Role of the Reserve Bank of Fiji
The Reserve Bank of Fiji, as the highest capacity supervisor, plays a crucial role in mitigating risks within the financial sector. However, the NRA warned that the risk of transnational laundering remains very high due to Fiji’s open economy and modern communications infrastructure.
Areas of Urgent Concern
Four areas of urgent concern have been identified:
- Cash-based economy
- Supervision of financial institutions
- Technical resources
- Financing of terrorism
Strategies are being developed for each area to minimize ML/FT risks.
Importance of Coordination
The NRA emphasized the importance of effective coordination between agencies, including the Financial Intelligence Unit, to ensure a comprehensive approach to combating ML/FT.
Progress and Future Steps
Fiji’s AML/CFT program has made significant progress, but it is crucial that measures are taken to address identified vulnerabilities and prevent escalation of ML/FT risks. The report concluded that immediate attention should be given to these areas of concern to minimize the most significant ML/FT risks.
The NRA will be reviewed and updated regularly to ensure Fiji’s financial sector remains resilient against ML/FT threats.
Contact Information
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 Website: www.fijifiu.gov.fj
Release Date
June 2015