Financial Crime World

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Nauru’s Offshore Company Registry Remains Largely Unchanged

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Nauru, a small Pacific island nation, has maintained its offshore company registry with 59 operating corporations, despite a lack of new trust company licenses issued in the past decade. The registry, which includes pending removals, presents a residual risk, albeit at a low rate.

Financial Institutions Not Involved in Narcotics Trafficking

A review of Nauru’s financial institutions has found no evidence of involvement in currency transactions related to international narcotics trafficking or significant amounts of US currency derived from illegal sales within the United States.

AML/CFT Regime Commensurate with Risks, but Weaknesses Remain

Nauru’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime is broadly commensurate with the country’s risks and threats. However, there are areas for improvement, particularly in the offshore sector.

  • Enhance controls at state-owned incorporation agents and trust companies
  • Attract a banking institution subject to AML/CFT regulations
  • Supervise alternative remittance providers
  • Amend AML legislation to include more predicate offenses and reduce restrictive conditions related to tax matters

Ratification of UN Conventions

Nauru is working on ratifying several United Nations conventions, including:

  • Convention against Corruption
  • 1988 UN Drug Convention
  • UN Convention against Transnational Organized Crime

Government Legislation Weaknesses

According to the US State Department, Nauru does not conform with certain government legislation, including:

  • Criminalizing beyond drugs-related money laundering
  • Arrangements for asset sharing
  • Cooperating with international law enforcement
  • Being a party to the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances

EU White List Status

Nauru is currently not on the EU’s white list of equivalent jurisdictions, indicating that it does not meet certain AML/CFT standards.