Financial Crime World

Nauru’s Anti-Money Laundering/Counter-Terrorist Financing (AML/CFT) Regime: Key Points and Efforts

Overview of Nauru’s AML/CFT Regime

The US Department of State Money Laundering assessment and the FATF evaluation suggest that Nauru has some weaknesses in its anti-money laundering/counter-terrorist financing (AML/CFT) regime, but it is not considered a high-risk jurisdiction.

Key Weaknesses

  • Limited AML/CFT infrastructure: Nauru’s AML/CFT regime is broadly commensurate with the risks and threats facing the country, however, there is a need for additional controls in the offshore sector.
  • Need for enhanced due diligence: The government of Nauru should ensure that state-owned incorporation agents and trust registration bodies focus their AML/CFT efforts on providing controls for the offshore sector.
  • Limited predicate offenses: Nauru’s AML legislation does not include a comprehensive list of predicate offenses, which is necessary to effectively combat money laundering.
  • Lack of cooperation with international organizations: Nauru has been working on ratifying several UN Conventions and becoming a party to the UN Convention against Transnational Organized Crime; however, it has not yet done so.

Efforts to Strengthen AML/CFT Regime

The US Department of State report also mentions that Nauru is making efforts to strengthen its AML/CFT regime, including:

  • Ratification of international agreements: The government of Nauru has prioritized the ratification of several UN Conventions and is working towards becoming a party to these agreements.
  • Amendments to AML legislation: The government of Nauru has begun work on a new Crimes Act that will cover money laundering and corruption offenses, which is expected to be completed by 2013.

Conclusion

Overall, while Nauru’s AML/CFT regime has some weaknesses, it is not considered a high-risk jurisdiction. The efforts made by the government of Nauru to strengthen its AML/CFT regime are positive steps towards improving the country’s anti-money laundering and counter-terrorist financing capabilities.