Financial Crime World

Title: Fiji’s Financial Intelligence Unit: Defending Against the Hidden Threat of Money Laundering

Money Laundering in Fiji: An Overview

Money laundering, a complex financial crime, poses a significant threat to Fiji’s vibrant economy. This three-step process involves placing criminal proceeds in the financial system, layering and obscuring their origin through sophisticated transactions, and integrating the funds back into the financial system (United Nations Office on Drugs and Crime, 2021).

Money Laundering Cases in Fiji

  • Five individuals were convicted and sentenced for money laundering offenses in 2012.
  • Techniques used included setting up shell companies and employing third parties to launder funds (Fiji Broadcasting Corporation, 2012).

International Efforts to Combat Money Laundering

  • The UN’s Vienna Convention in 1988 and the Palermo Convention in 2002 were established to prevent money laundering and terrorist financing.
  • International bodies like the Financial Action Task Force (FATF) and regional counterparts like Fiji’s Asia Pacific Group on Money Laundering (APG) were formed.

The Fiji Financial Intelligence Unit (FIU)

Located at the Reserve Bank of Fiji building, the FIU plays a crucial role in defending against money laundering. Its mandate includes receiving, analyzing, and disseminating intelligence related to financial transactions suspected of being linked to money laundering or terrorist financing. Reports from financial institutions, intermediaries, and Designated Non-Financial Businesses and Professionals (DNFBPs) are key sources of intelligence (Reserve Bank of Fiji, 2021).

Countering Money Laundering Techniques in Fiji

  • Shell companies and third parties have been used extensively to facilitate money laundering.
    • First recorded case: Asia Pacific Finance case (Fiji Sun, 2000)
    • Honeymoon Beach Resort and Shahil and Shohil Groceries and Repairs were other examples.

Protecting Fiji’s Financial System and Economy

  • Fiji’s Proceeds of Crime Act (POC Act)
    • Allows the FIU to grant seizure and forfeiture orders for properties suspected of being linked to money laundering or other criminal activities.
    • Mandates unexplained wealth declarations, requiring individuals to explain any wealth that exceeds or does not match their declared or lawful income.
  • The Financial Sector Is Required to Comply with the Financial Transactions Reporting (FTR) Act
    • Financial institutions and DNFBPs must report certain financial transactions to the FIU.
    • Implement internal controls to prevent being used for money laundering activities.

The Role of Accountants in Money Laundering

  • Specialized expertise and ability to create complex financial structures make accountants attractive targets for money laundering.
  • Fiji has strengthened its regulatory frameworks to subject professionals like accountants to the same reporting and compliance rules as other financial institutions and DNFBPs.

References

Fiji Broadcasting Corporation. (2012, September 28). 5 Money Launderers Sentenced. https://fijibroadcasting.com/news/local-news/5-money-launderers-sentenced/18723712-3068-4caa-b25b-6fe63334e260

Fiji Sun. (2000, August 16). Asia Pacific Finance Scam. https://fijisun.com.fj/2000/08/16/asia-pacific-finance-scam/

Reserve Bank of Fiji. (2021). Fiji Financial Intelligence Unit (FIU). https://www.rbf.org.fj/about/fiji-financial-intelligence-unit/

United Nations Office on Drugs and Crime. (2021). Money Laundering. https://www.unodc.org/unodc/en/money-laundering.html