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Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) Policy for Financial Institutions in Nauru

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Nauru, a small island nation in the Pacific, has established an AML/CFT policy to prevent money laundering and terrorist financing. This document provides an overview of the key points and requirements for financial institutions operating in the country.

Key Points

Account Opening

  • Financial Institutions are required to verify the identity of all customers.
  • Transactions will be monitored to prevent money laundering and terrorist financing.

Sanctions

  • Failure to comply with AML/CFT obligations can result in penalties of up to $200,000 or 2 years imprisonment for individuals, and $1 million for corporations.

Senior Management Responsibility

  • Directors and senior management may be held liable for offenses committed by the institution if they had actual knowledge or reckless disregard of the offense.

Agencies Involved

  • The following agencies are involved in implementing this Policy:
    • Minister for Finance
    • Registrar of Banks
    • Nauru Financial Intelligence Unit (FIU)
    • Registrars of Business Names, Corporations, Partnerships or Trusts
    • Authority established under the Beneficial Ownership Act 2017

Basel Principles and International Standards

  • Nauru’s banking laws incorporate the Basel Committee on Banking Supervision Principles for transparency and accountability.
  • Although not a member of the International Association of Insurance Supervisors (IAIS) or the International Organisation of Securities Commissions (IOSC), Nauru will adopt their standards if insurance or securities service providers set up business in the country.

Conclusion

The AML/CFT Policy for financial institutions in Nauru aims to prevent money laundering and terrorist financing by requiring institutions to verify customer identities, monitor transactions, and report suspicious activity. Failure to comply can result in penalties, highlighting the importance of adhering to these regulations.