Financial Crime World

Money Laundering: A Growing Concern in Fiji’s Accounting Sector

Fiji’s accounting sector has been identified as a potential weak link in the country’s fight against money laundering, according to financial intelligence officials. Accountants are known for their ability to assist in masking the origin and ownership of illegal funds, earning them the nickname “professional money launderers”.

A Brief History of Money Laundering

The history of money laundering dates back to the 1930s when notorious gangster Al Capone was convicted of tax evasion. His accountant, Meyer Lansky, is said to have siphoned off millions of dollars from illegal businesses into casinos and bank accounts in Hong Kong and South America. While Lansky was never caught and reportedly worth $100 million, his actions set a precedent for the use of accountants in money laundering operations.

Fiji’s Accounting Sector: A Vulnerable Target

Today, Fiji’s accounting sector is vulnerable to money laundering due to its:

  • Specialized expertise in creating complex financial schemes
  • Role as “gatekeepers” in setting up corporate vehicles and trusts
  • High level of regulation and professional secrecy

Recent studies by the Financial Action Task Force (FATF) have shown that lawyers, notaries, and accountants are increasingly being used for money laundering operations. As a result, Fiji’s accounting sector is being targeted by criminals seeking to hide illegally derived funds.

Red Flag Indicators

The Financial Intelligence Unit (FIU) in Fiji has identified several red flag indicators of possible money laundering activities, including:

  • Unusual transactions
  • Complex business structures
  • Requests for settlements on behalf of clients

Combating Money Laundering

To combat this threat, accountants are required to conduct customer due diligence and report certain financial transactions as required under the Fiji Taxation Revenue Act. Accounting firms are also protected from civil claims by their clients when fulfilling their obligations under the Act.

Inter-agency partnership is crucial in combating money laundering in Fiji, with law enforcement agencies such as:

  • The Fiji Police Force
  • The Fiji Revenue and Customs Authority
  • The Fiji Independent Commission Against Corruption

all playing a key role.

Conclusion

The protection of Fiji’s financial system, borders, and people from abuse by criminals and money launderers requires a concerted effort from everyone. The accounting sector has a critical role to play in this fight, and it is essential that accountants are aware of the risks and take steps to prevent their services being used for illegal activities.