Nauru’s Anti-Money Laundering and Combating the Financing of Terrorism Efforts

Overview

Nauru has implemented several anti-money laundering (AML) and combating the financing of terrorism (CFT) measures, but there are areas that require improvement to ensure effective implementation.

Strengths

Comprehensive Framework for AML/CFT Obligations

• The Anti-Money Laundering Act 2008 provides a comprehensive framework for AML/CFT obligations.
• Financial institutions are required to maintain records that allow for the reconstruction of individual transactions.
• Remitters are required to maintain full originator information for both domestic and cross-border wire transfers.
• Nauru requires financial institutions to pay specific attention to business relationships and transactions with counterparts from or in countries not sufficiently applying the FATF Recommendations.

Areas for Improvement

Limited Suspicious Transaction Reports (STRs)

• The AMLA 2008 creates obligations to report suspicious transaction reports (STRs) for money laundering (ML) and terrorism financing (TF), but no STRs have been filed to date.
• The scope of the STR reporting obligation under AMLA is limited by the narrow range of predicate offences and restrictive conditions in relation to tax matters.

Gaps in Beneficial Ownership Requirements

• There are gaps in beneficial ownership requirements and enhanced CDD for high-risk customers.

Remittance Sector Guidelines

• No guidelines have been issued specific to the remittance sector, which is the only financial sector currently operating in Nauru.

Supervision Capacity of Financial Intelligence Unit (FIU)

• The procedures and capacity to conduct supervision by the FIU are not yet well developed.

Conclusion

While Nauru has made some progress in implementing AML/CFT measures, there is still a need for further development and improvement to ensure effective implementation.