Financial Inclusion in Nauru: Blacklisted Banks Still Operating Amid Concerns Over Crimes

Warning Issued by International Chamber of Commerce’s Financial Investigation Bureau (FIB)

The FIB has issued a warning that several blacklisted banks from the Pacific island nation of Nauru are still in operation, sparking concerns over money laundering and crimes. These institutions have been designated as “money laundering concerns” by the US Department of the Treasury since 2002.

Background: Nauru Designated as Money Laundering Concern

• In 2002, the US Department of the Treasury designated Nauru as a “money laundering concern,” prohibiting financial dealings between US institutions and any Nauru-licensed institution.
• Since then, several amendments have been made to the anti-money laundering provisions of the Bank Secrecy Act, targeting offshore banks with no physical or legal presence in other countries.

FIB’s Warning: Blacklisted Banks Re-Emerging Under Different Names

FIB Assistant Director Jon Merrett stated that some blacklisted Nauru financial institutions had gone quiet for a time but are now re-emerging and attempting to disguise their origins. “It appears people have forgotten the three-year-old designation, or perhaps believe they can persuade them they are dealing with an entirely different entity,” he said.

Risks Associated with Dealing with Blacklisted Nauru Banks

• The US Treasury’s list of blacklisted Nauru banks includes several institutions that have identical or similar names to legitimate banks, making it difficult for financial institutions to distinguish between them.
• Some US banks may be unwittingly trading with or maintaining correspondent relationships with these discredited institutions.

Recommendations and Protective Measures

To avoid confusion and reduce the risk of inadvertently compromising compliance obligations, FIB recommends that concerned financial institutions:

• Contact FIB for clarification
• Catalogue a complete list of all Nauru banks and financial institutions named by the US Department of the Treasury
• Offer protective measures such as tracking assets and assisting with exiting correspondent relationships

Financial institutions can email fib@icc-ccs.org to take advantage of this service and ensure compliance with anti-money laundering regulations. The FIB’s warning highlights the ongoing risks associated with dealing with blacklisted Nauru banks and the importance of vigilance in preventing crimes such as money laundering.