Financial Crime World

Nauru’s Financial Intelligence Unit Faces Resource Constraints

Overview

Nauru’s financial sector has been required to adopt anti-money laundering and counter-terrorism financing (AML/CFT) measures since 2006. However, despite making some progress, the country still faces significant challenges in implementing its AML/CFT regime effectively.

Current State of Affairs

  • In October 2011, a new FIU Supervisor was appointed, but the unit still lacks procedures and systems to make it effective.
  • Nauru’s financial sector has been required to adopt AML/CFT measures since 2006, but the country still lacks a comprehensive regime.

Report by Asia/Pacific Group on Money Laundering (APG)

The APG report highlights that Nauru’s AML/CFT regime is broadly commensurate with the risks and threats facing the country. However, there are still concerns about the lack of controls in the offshore sector.

Efforts to Strengthen AML/CFT Regime

  • The government has begun work on a new Crimes Act, which is expected to be completed by 2013.
  • The act will cover money laundering and corruption offenses.
  • Nauru has prioritized the ratification of UN Conventions, including the Convention against Corruption and the 1988 UN Drug Convention.

Challenges Facing Nauru

Despite these efforts, Nauru still faces significant challenges in implementing its AML/CFT regime effectively. The country’s lack of resources and capacity have hindered its ability to implement effective AML/CFT measures.

  • The EU has not yet included Nauru on its White list of Equivalent Jurisdictions, citing concerns about the country’s AML/CFT regime.
  • Nauru is also not a party to the UN Convention against Transnational Organized Crime.

Conclusion

While Nauru has made some progress in implementing its AML/CFT regime, it still faces significant challenges due to resource constraints and capacity issues. The country needs to continue to work on strengthening its AML/CFT regime to meet international standards and reduce the risk of money laundering and terrorist financing.