Financial Crime World

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Palau Introduces Strengthened Due Diligence Procedures for Financial Transactions

The government of Palau has recently implemented enhanced due diligence procedures for financial transactions to combat money laundering, terrorist financing, and other illicit activities. The new measures aim to increase transparency and accountability in the country’s financial sector.

Enhancing Risk Assessment and National Cooperation

According to officials, the strengthened procedures will focus on assessing risk and applying a risk-based approach (R.1) as well as promoting national cooperation and coordination (R.2). This includes:

  • Assessing risk and applying a risk-based approach
  • Promoting national cooperation and coordination
  • Strengthening internal controls

Broadening Definition of Money Laundering and Introducing Confiscation Measures

Palau has also taken steps to address money laundering by:

  • Broadening its definition of money laundering (R.3)
  • Introducing confiscation and provisional measures (R.4) to combat financial crimes

Combating Terrorist Financing

The country has also introduced targeted financial sanctions related to terrorism and terrorist financing (R.6), as well as sanctions related to proliferation (R.7).

Enhanced Customer Due Diligence and Record Keeping

Palau’s financial institutions will now be required to:

  • Conduct customer due diligence (R.10)
  • Maintain accurate records (R.11)

Addressing Correspondent Banking, Money Transfer Services, and New Technologies

The country has also introduced measures to address the risks associated with:

  • Correspondent banking (R.13)
  • Money or value transfer services (R.14)
  • New technologies (R.15)

Emphasis on Internal Controls and Reporting Suspicious Transactions

The government has emphasized the importance of internal controls, including those related to:

  • Foreign branches and subsidiaries (R.18)
  • Higher-risk countries (R.19)
  • Reporting suspicious transactions (R.20)

Financial institutions will also be required to maintain confidentiality (R.21).

Recognition as Best Practices by International Organizations

Palau’s efforts to combat financial crime have been recognized as best practices by international organizations, which have praised the country’s commitment to transparency and cooperation.

Expected Outcomes

The strengthened due diligence procedures are expected to enhance Palau’s ability to detect and prevent financial crimes, ultimately contributing to a safer and more secure financial environment for its citizens.