Financial Crime World

Fiji’s Terrorism Financing Risk Assessment Reveals Urgent Concerns

Suva, Fiji - A national risk assessment on money laundering and terrorism financing (ML/FT) in Fiji has identified four areas of urgent concern that require immediate attention to minimize the country’s ML/FT risks.

Key Findings

According to the report, released by the National Anti-Money Laundering Council, the Fijian banking sector bears a significant portion of the ML/FT risks, particularly with regard to illicit cash and electronic funds. The Reserve Bank of Fiji, as the highest capacity supervisor, has taken steps to mitigate these risks, but more needs to be done.

Border Controls: A Major Concern

The report highlights concerns over border controls, noting that while physical and electronic surveillance resources are in place, there are limitations in detecting the movement of cash into and out of the country, particularly at seaports. The risk of illicit cash and monetary instruments being brought into and taken out of the country by “transit” tourists and crew members of other vessels is a major concern.

AML/CFT Coordination: Room for Improvement

AML/CFT coordination is generally good, with formal frameworks such as Memoranda of Understanding (MOUs) in place, but it is crucial to ensure that task forces and coordinating groups are effective and not overly onerous on agencies.

Vulnerabilities in Money Transmission Services and Real Estate Deals

The report also emphasizes the importance of addressing vulnerabilities within money transmission services, money changer businesses, and real estate deals, which create channels for placement and movement of cash proceeds. Electronic financial technologies have increased the risk of cash proceeds being carried into Fiji to be layered through these channels.

Areas of Urgent Concern

Based on the National Risk Assessment (NRA), Fiji is not considered to have a significant ML/FT risk, but immediate attention is needed to implement identified strategies and ensure that new risks are identified at an early stage. The four areas of urgent concern are:

  • Cash economy: The use of cash in transactions, which can make it difficult to track and trace financial flows.
  • Supervision of financial institutions: Ensuring that financial institutions have adequate measures in place to prevent ML/FT.
  • Technical resources: Providing sufficient technical resources, such as data analytics tools, to support AML/CFT efforts.
  • Financing of Terrorism: The risk of terrorist financing, which is considered high globally.

Conclusion

The NRA is a foundation for the development of a more comprehensive assessment of ML/FT risks over the next few years, and additional statistical and other data will need to be collected and analyzed. The report concludes that Fiji has a good AML/CFT program in place, but it is essential to ensure its continued effectiveness and address identified risks.