Financial Crime World

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Nauru’s National Risk Assessment: A Critical Look at the Island Nation’s Economy and Infrastructure

In an objective assessment, Nauru’s National Plans for implementing the Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) framework have identified several key areas to consider. The report highlights the importance of a thorough evaluation of the island nation’s economy and infrastructure in order to mitigate risks associated with money laundering and terrorist financing.

Population and GDP Growth

According to the 2021 Population and Housing Census Report, Nauru’s population has increased from 11,580 in 2018 to 12,000 by 2023. The country’s current GDP stands at US$10,648.6 million. While income from the Regional Processing Centre (RPC) remains a significant source of revenue, it is crucial to note that this figure may not accurately reflect Nauru’s real income, as the RPC is currently operating in its Enduring Capability Contingency State and is expected to close soon.

Government Expenditure

Nauru’s Government Revenue is governed by Article 58 of the Constitution. The country has established a Development Funding Authority (DFA) 2011, which manages all monies received in grants, donations, and other funds. The Minister for Finance is required to table quarterly reports to Parliament under Section 8 of the DFA 2011.

Nauru Airlines and Flights

Nauru Airlines operates a fleet of six aircraft, including three passenger planes and three dedicated freight-only aircraft. The airline continues to fly to several destinations, including:

  • Nadi
  • Brisbane
  • Tarawa
  • Kiritimati
  • Pohnpei
  • Majuro
  • Undertakes charters on request from various countries

Shipping and Port Development

Nauru’s shipping infrastructure has undergone significant changes in recent years. The country is now building a port capable of loading and offloading cargoes like any other port, funded by an Asian Development Bank grant. Some ships are currently able to berth properly at the port, which is expected to handle more vessels, including:

  • Cruise ships
  • Refueling vessels
  • Cargo vessels
  • etc.

Implications for AML/CFT

The development of Nauru’s shipping infrastructure and increased port activity will result in potential activities that could be subject to AML/CFT measures. As such, it is crucial for the country to implement robust risk assessment procedures to ensure compliance with international standards.

Conclusion

In conclusion, an objective assessment of Nauru’s economy and infrastructure highlights several key areas to consider in implementing the AML/CFT framework. By recognizing these challenges and opportunities, Nauru can better position itself to mitigate risks associated with money laundering and terrorist financing.