French Polynesia Banks Urged to Adopt Strict Anti-Money Laundering Measures

The Financial Action Task Force (FATF) has issued guidelines for French Polynesian banks to prevent financial crimes, highlighting the importance of robust measures to identify and report suspicious transactions.

Vulnerability to Money Laundering

French Polynesia, an overseas collectivity of France, is seen as vulnerable to money laundering due to its strategic location in the Pacific. As a result, the island nation’s banks must implement strict anti-money laundering (AML) and combating the financing of terrorism (CFT) measures.

Key Guidelines for French Polynesian Banks

The FATF guidelines emphasize three lines of defense:

• Business Units: Conduct due diligence on clients, including verifying their identity, financial background, and nature of their business or company.
• Independent Oversight and Advice: Ensure that internal audit functions are in place to monitor and report suspicious transactions.
• Internal Audit Functions: Record and document all information obtained through client and transaction due diligence.

Transaction Monitoring

Banks must be able to identify and report suspicious transactions that do not make economic sense or involve unusual withdrawals. This includes:

• Checking for signs of suspicious activity, such as large cash withdrawals or structured transactions.
• Recording and documenting all information obtained through client and transaction due diligence.

Governance and Organization

A clear AML/CFT policy must be defined by the board of directors and implemented by a senior officer responsible for compliance, human resources, and technology. This includes:

• Defining a robust governance structure to ensure effective implementation of AML/CFT measures.
• Establishing clear roles and responsibilities within the bank.

Benefits of Adopting Strict Measures

By adopting these strict measures, French Polynesia’s banks can effectively prevent money laundering and terrorist financing, protect their reputation, and maintain public trust. The FATF guidelines serve as a reminder that AML/CFT compliance is not only a regulatory requirement but also a critical aspect of maintaining the integrity of the global financial system.

Commitment to Implementation

French Polynesian authorities have expressed commitment to implementing the FATF guidelines and ensuring that local banks adhere to international standards on AML/CFT compliance. The move is seen as an important step in preventing financial crimes and promoting transparency in the island nation’s financial sector.