Financial Crime World

Nauru’s Strides in Combating Money Laundering: Room for Improvement

In recent years, Nauru has made significant progress in strengthening its anti-money laundering (AML) and combating the financing of terrorism (CFT) framework. However, despite these achievements, the country still faces challenges in implementing key recommendations from international organizations.

Progress and Achievements

Nauru joined the Asia/Pacific Group on Money Laundering (APG) in 2007 and underwent a mutual evaluation report in 2012. The review highlighted several successes, including:

  • Publishing a code of conduct for public officials
  • Updating the register of corporations operating in Nauru
  • Establishing a website to publish all laws and bills

Areas Requiring Improvement

Despite these achievements, the APG identified several areas that require improvement, including:

  • The financial intelligence unit (FIU) lacks operational and financial independence
  • Exemption from customer due diligence is a concern
  • Limitations in accessing information hinder public participation in anti-corruption efforts

Technical Assistance Needed

The report also highlighted the need for technical assistance in various areas, including:

  • Establishing an office of the Ombudsman
  • Boosting the functions of the Office of the Auditor General
  • Conducting training on ethics and integrity for public servants

Asset Recovery Challenges

Nauru’s framework is primarily based on the Mutual Assistance in Criminal Matters Act 2004, which provides for general provisions, special cooperation, bilateral and multilateral agreements, and arrangements. However, the country still faces challenges in recovering assets, particularly in cases where the accused is not a resident of Nauru.

Recommendations

To address these challenges, Nauru has committed to implementing several recommendations, including:

  • Strengthening the operational and financial independence of the FIU
  • Revising the exemption from customer due diligence in the Anti-Money Laundering Act 2008
  • Enhancing public awareness campaigns to promote reporting suspicious transactions
  • Increasing cooperation with other countries to improve asset recovery
  • Providing financial and technical assistance to establish an office of the Ombudsman

Conclusion

By implementing these recommendations, Nauru can further strengthen its anti-money laundering and combating the financing of terrorism framework, ultimately contributing to a safer and more transparent financial system for its citizens and international partners alike.