Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Policy in Nauru

Key Points

• Sanctions: Financial institutions must comply with AML/CFT obligations under Part 4 of the AML-TFS Act 2023, which includes penalties up to $200,000 or 2 years imprisonment for individuals and $1,000,000 for bodies corporate.
• Senior Management Accountability: Directors and senior management may be held liable for offenses if they had actual knowledge or reckless disregard of the act or omission constituting the offense.
• Agencies Involved: The policy is implemented by various agencies, including:
  • The Minister for Finance
  • Registrar of Banks
  • Nauru Financial Intelligence Unit (FIU)
  • Registrars of Business Names, Corporations, Partnerships, or Trusts
  • The Authority established under Beneficial Ownership Act 2017

International Cooperation and Standards

• Basel Committee on Banking Supervision Principles: Nauru’s position on applying these principles to banks operating in Nauru is provided for under Section 7(1)(a)(iii) of the Banking Act 1975.
• International Association of Insurance Supervisors (IAIS): Nauru is not a member, but may adopt IAIS standards or principles through laws developed to regulate insurance service providers.
• International Organisation of Securities Commission (IOSC): Nauru is also not a member, but will uphold IOSC principles if securities service providers set up business in Nauru.

Conclusion

The AML/CFT policy for financial institutions in Nauru aims to prevent money laundering and terrorist financing by following the requirements of the updated anti-money laundering legislation (AML-TFS Act 2023). The policy emphasizes the importance of transparency, accountability, and adherence to international standards.