Financial Crime World

Mutual Evaluation Report: Anti-Money Laundering and Combating the Financing of Terrorism Regime of Nauru

Introduction

The Financial Action Task Force (FATF) has conducted a mutual evaluation report on the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime of Nauru. This report assesses various aspects of Nauru’s AML/CFT framework, including preventive measures related to financial institutions, designated non-financial businesses and professions, and other relevant areas.

Preventive Measures—Financial Institutions

Overview

There is no bank or financial institution operating in Nauru, except for one remitter (Western Union). AML/CFT obligations are set out in the Anti-Money Laundering Act 2008 (AMLA 2008).

Weaknesses and Recommendations

  • Beneficial ownership requirements are not fully met.
  • Enhanced CDD for high-risk customers is not conducted to the required standard.

Remitters

  • Remitters are required to maintain full originator information for both domestic and cross-border wire transfers, regardless of the amount.

Preventive Measures—Designated Non-Financial Businesses and Professions

Overview

All DNFBPs in Nauru (two companies) conduct some level of CDD, but not to the extent of identifying beneficial ownership. No STRs have been provided by any DNFBP in Nauru.

Supervision and Enforcement

Overview

The FIU is responsible for monitoring, supervising, and enforcing compliance with AML/CFT requirements, but its procedures and capacity are not yet well developed.

Weaknesses and Recommendations

  • Limited staff resources and experience hinder thorough supervision of the FI.
  • Supervisory procedures are not in place.

Other Areas

Overview

Nauru does not have a prudential regulator or supervisor, and banking legislation is limited in relation to core principles.

Recommendations for Improvement

  • Provide guidance on what constitutes originator information.
  • Update guidelines for STR reporting.
  • Enhance supervision and enforcement procedures.

Conclusion

The report identifies several weaknesses in Nauru’s AML/CFT framework but also notes some strengths, such as comprehensive obligations related to paying attention to unusual transactions. The report provides recommendations for improving Nauru’s AML/CFT regime to bring it into line with international standards.