Financial Crime World

Financial Institutions Required to Obtain Business License under Business License Act 2017

Nauru Introduces Stricter Anti-Money Laundering and Combating the Financing of Terrorism Regulations

Nauru, [Date] - The government of Nauru has issued a new policy requiring all financial institutions operating in the country to obtain a business license under the Business Licenses Act 2017. This move is aimed at strengthening anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.

Obligations for Financial Institutions

According to the AML/TFS Act 2023, financial institutions are considered reporting entities that must comply with certain obligations:

  • Ongoing compliance
  • Customer due diligence
  • Electronic currency transfers
  • Reporting suspicious activities

Failure to comply can result in penalties up to $200,000 or two years’ imprisonment for individuals, and $1 million for bodies corporate.

Prohibitions and Responsibilities

The policy also prohibits dealings with shell banks, requiring financial institutions to satisfy themselves that their correspondent banks do not permit accounts to be used by such entities. Senior management is held accountable for AML/CFT obligations, with directors and other members of senior management liable for offenses committed with their knowledge or reckless disregard.

Implementation Agencies

The following agencies are involved in implementing the policy:

  • Minister for Finance
  • Registrar of Banks
  • Nauru Financial Intelligence Unit
  • Registrars of Business Names, Corporations, Partnerships, or Trusts
  • Authority established under the Beneficial Ownership Act 2017

International Standards

The government has committed to adopting international standards, including:

  • Basel Committee on Banking Supervision Principles (Basel Principles)
  • International Association of Insurance Supervisors (IAIS) principles, should insurance and securities companies operate in Nauru in the future.

Government Statement

“We recognize the importance of financial institutions in our society and economy,” said a government spokesperson. “By implementing these regulations, we aim to protect Nauru and its citizens from the effects of money laundering and terrorist financing while promoting transparency and accountability.”

Contact Information

For more information on this policy, please contact: