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Fiji’s National Risk Assessment Report: Money Laundering and Financing of Terrorism

Executive Summary

The National Risk Assessment (NRA) report on money laundering and financing of terrorism for Fiji was conducted between May 2014 and May 2015. The report highlights the country’s good Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) program, but also identifies significant risks in certain areas.

Overall Risk

Fiji is considered to have a high risk of money laundering and financing of terrorism due to its:

• Open economy: Creates opportunities for illicit funds flows
• Modern communication systems: Facilitate financial transactions and increase the risk of ML/FT activities
• Vulnerabilities in the financial sector: The Reserve Bank of Fiji’s ability to effectively supervise all financial institutions is a concern

Risk Areas

1. Cash Economy

• Fiji’s cash-based economy creates opportunities for money laundering through illicit funds flows.

2. Supervision of Financial Institutions

• The Reserve Bank of Fiji is the primary supervisor, but there are concerns about its ability to effectively supervise all financial institutions.

3. Technical Resources

• Limited technical resources and capacity hinder the effective implementation of AML/CFT measures.

4. Financing of Terrorism

• Fiji’s high-risk status globally means it must remain vigilant against financing terrorism.

Recommendations

To address the identified risks, the report recommends:

• Implementing strategies to address ML/FT risks in the four areas of concern
• Reviewing and updating the NRA every 12 months
• Conducting a new assessment within 2-5 years

Conclusion

While Fiji has made progress in implementing AML/CFT measures, it must continue to strengthen its program to effectively mitigate ML/FT risks.