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Financial Institutions in Nauru: Criteria for Operating

The Nauru Government has outlined the criteria for financial institutions to operate in the Republic, with a focus on ensuring compliance with anti-money laundering and combating the financing of terrorism (AML/CFT) regulations.

Courses of Action for Financial Institutions

To operate in Nauru, financial institutions must meet certain requirements:

  • Registering with the Registrar of Banks
  • Complying with AML/CFT regulations as outlined in the Anti-Money Laundering and Combating the Financing of Terrorism Act 2023
  • Implementing effective risk management systems to detect and prevent money laundering and terrorist financing activities
  • Providing regular reports to the Financial Intelligence Unit (FIU)
  • Ensuring senior management is aware of their responsibilities and takes steps to prevent AML/CFT contravening acts

Regulatory Agencies Involved

The following agencies are responsible for implementing the AML/CFT policy in Nauru:

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

Basel Committee on Banking Supervision Principles

Nauru has adopted the Basel Principles for banks operating in the Republic. These principles are outlined in Section 7(1)(a)(iii) of the Banking Act 1975.

International Associations

Nauru is not a member of the International Association of Insurance Supervisors (IAIS) or the International Organisation of Securities Commissions (IOSC). However, the Government remains committed to creating an enabling environment for insurance and securities service providers in Nauru. Any future developments will be conducted with consideration of Nauru’s context and needs.

Conclusion

The role of financial institutions in any society is crucial, contributing to economic development and bringing many benefits to individuals and the country as a whole. It is essential that financial institutions comply with AML/CFT regulations to prevent money laundering and terrorist financing activities. The updated anti-money laundering legislation and the AML/CFT policy for financial institutions aim to protect Nauru and its citizens from the effects of AML/CFT contravening activities.

Contact Details

For further information on this Policy, please contact: