Financial Crime World

Fiji’s National Risk Assessment Reveals Concerns Over Money Laundering and Financing of Terrorism

Introduction

A recent national risk assessment (NRA) conducted by the Financial Intelligence Unit (FIU) has identified several areas of concern regarding money laundering (ML) and financing of terrorism (FT) in Fiji.

Vulnerabilities Identified

According to the report, while Fiji’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) program has a solid foundation, there are vulnerabilities that need to be addressed. The FIU found that:

  • Border Controls: Fiji’s border controls have limited effectiveness in detecting the movement of cash into and out of the country, particularly at seaports.
  • Supervision of Financial Institutions: A significant portion of ML/FT risks is borne by the Fijian banking sector, with the Reserve Bank of Fiji being the highest-capacity supervisor. However, the overall risk to the sector remains high.
  • Money Transmission Services and Money Changer Businesses: These services create channels for placement and movement of cash proceeds.
  • Real Estate Deals: The report highlighted the risk that proceeds of crime from domestic and overseas offenders will be layered through real estate deals.

Urgent Concerns

Despite these concerns, the FIU noted that Fiji is not considered to have a significant ML/FT risk. However, immediate attention needs to be paid to four areas of urgent concern:

  • Cash Economy: The use of cash in transactions creates opportunities for ML and FT.
  • Supervision of Financial Institutions: Improved supervision of financial institutions is necessary to mitigate ML/FT risks.
  • Technical Resources: Enhancing technical resources will help to identify and disrupt ML and FT activities.
  • Financing of Terrorism: Fiji’s risk profile is high due to global terrorism financing concerns.

Strategies for Addressing Risks

To address these risks, strategies have been identified for each area, including:

  • Strengthening border controls
  • Improving supervision of financial institutions
  • Enhancing technical resources
  • Implementing measures to prevent the financing of terrorism

Recommendations

The FIU has recommended that a more thorough NRA be conducted in the next 2-5 years.

Conclusion

While Fiji has a solid foundation for its AML/CFT program, it is imperative that all ML/FT risks are identified and addressed to ensure the continued effectiveness of the program.