Financial Crime World

Nauru’s Banking Requirements and AML/CTF Policy

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The Republic of Nauru has established a set of requirements for financial institutions operating in the country, aimed at promoting transparency, accountability, and integrity in the financial sector.

Key Criteria for Licensing

To operate a bank in Nauru, applicants must meet specific criteria, including:

  • Limited Business Scope: The applicant’s business scope must be limited to banking services only.
  • Capital Requirements: The applicant must have sufficient capital to ensure the stability of the bank.
  • Fit and Proper Criteria: The applicant’s directors, shareholders, and key employees must meet the fit and proper criteria.

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

Nauru has implemented an AML/CTF policy to prevent and detect money laundering and terrorist financing. The policy requires financial institutions to:

  • Identify and Verify Customers: Financial institutions must identify and verify their customers’ identities.
  • Report Suspicious Transactions: Financial institutions must report suspicious transactions to the Nauru Financial Intelligence Unit (FIU).
  • Maintain Records: Financial institutions must maintain records of all transactions, including source and destination information.

Agencies Involved in Implementing the Policy

The following agencies are involved in implementing the AML/CTF policy:

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

International Standards and Principles

Nauru has adopted international standards and principles to ensure its financial sector operates in a transparent and accountable manner. These include:

  • Basel Committee on Banking Supervision Principles: Nauru has implemented the Basel Principles to promote transparency and accountability in banking services.
  • International Association of Insurance Supervisors (IAIS): Although not a member, Nauru will adopt IAIS standards or principles if insurance service providers establish business in the country.
  • International Organisation of Securities Commissions (IOSC): Like IAIS, Nauru is not a member but will uphold IOSC principles if securities companies or agents set up business in the country.

Conclusion

The AML/CTF policy for financial institutions in Nauru aims to prevent and detect money laundering and terrorist financing. Compliance with these requirements is essential to protect the country and its citizens from the effects of contravening activities.

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