Financial Crime World

Nauru’s Anti-Money Laundering and Combating the Financing of Terrorism Regime

Overview

The Republic of Nauru has a relatively weak anti-money laundering (AML) and combating the financing of terrorism (CFT) regime, which is broadly commensurate with the risks facing the country. However, there are areas for improvement, particularly in the offshore sector.

Strengths and Weaknesses

  • Weak AML/CFT Regime: Nauru’s limited resources and capacity constraints hinder its ability to effectively implement and enforce AML/CFT measures.
  • Criminalization of Money Laundering: Nauru’s approach to predicate crimes is based on a list approach, which covers all serious crimes. Legal persons are covered both criminally and civilly.

Key Aspects of the AML/CFT Regime

Know-Your-Customer (KYC) Rules

  • KYC rules are in place for:
    • Banks and money remitters
    • Securities and investment businesses
    • Insurance firms
    • Real estate agents
    • Dealers in art, precious metals, and stones
    • Trust or company service providers
    • Real estate agents/brokers
    • Casinos and lotteries
    • Legal practitioners and accountants
    • Payroll services using cash
    • Alternative remittance systems

Reporting Requirements

  • Nauru has not received any Suspicious Transaction Reports (STRs) or Currency Transaction Reports (CTRs) in 2012.

Money Laundering Criminal Prosecutions/Convictions

  • There were no money laundering prosecutions or convictions in 2012.

Records Exchange Mechanism

  • Nauru does not have a mechanism for exchanging records with the US or other jurisdictions.

Enforcement and Implementation Issues

The Government of Nauru (GON) should ensure that state-owned incorporation agents, trusts, and alternative remittance providers focus on AML/CFT efforts in the offshore sector.

Government Legislation

  • Nauru has not criminalized nondrug-related money laundering.
  • Does not permit sharing of seized assets with third-party jurisdictions.
  • Is not a party to the UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances.