Financial Crime World

NAURU TIGHTENS REGULATIONS ON FINANCIAL CRIME PREVENTION

Nauru has made significant strides in strengthening its regulatory framework to combat financial crime, with the Financial Intelligence Unit (FIU) playing a key role in driving this effort.

Establishment of the Financial Intelligence Unit (FIU)

The FIU was established under the Anti-Money Laundering and Targeted Financial Sanctions Act 2023. The unit is responsible for performing critical functions aimed at preventing money laundering and combating terrorism financing, including:

  • Collecting financial intelligence from various sources
  • Analyzing this intelligence to identify potential money laundering and terrorism financing activities
  • Disseminating the analyzed information to relevant authorities

Mutual Evaluation (ME) Process

As part of its commitment to international standards, Nauru has undergone a Mutual Evaluation process conducted by the Financial Action Task Force (FATF). The ME assesses a country’s compliance with the FATF 40 Recommendations on money laundering, terrorism financing, and proliferation financing. In preparation for this evaluation, the FIU worked closely with the Office of the Legislative Drafter to draft new laws and amend existing ones.

Standard Operating Procedures (SOPs)

The FIU has also developed Standard Operating Procedures (SOPs) to guide its activities in areas such as anti-money laundering and targeted financial sanctions. These SOPs are outlined in various regulations, including the Anti-Money Laundering and Targeted Financial Sanctions (Parallel Financial Investigation) Regulations 2024.

Key Regulations

Some of the key regulations governing financial crime prevention in Nauru include:

  • Proceeds of Crime Act 2004 & Regulations
  • Trusts (Trustee Duties) Regulations 2023
  • Counter Terrorism and Transnational Organised Crime (Amendment of the Schedule) Regulations 2023
  • Beneficial Ownership Act 2017 & Regulations
  • Business Licences (Non-Operational Businesses Record Keeping) Regulations 2023

Guidelines and Circulars

The FIU has also published several guidelines and circulars to support financial institutions and other stakeholders in their efforts to prevent financial crime. These include:

  • Circular – Non-Profit Organisations or Non-Profit Organisations Best Practice Guide
  • UNSC CL – Chamber of Commerce
  • UNSC CL – Finance Department
  • UNSC CL – Justice and Border Control Department

National Strategy for Anti-Money Laundering and Combating the Financing of Terrorism

The government of Nauru has also developed a National Strategy for Anti-Money Laundering and Combating the Financing of Terrorism. This strategy outlines the country’s approach to preventing financial crime and promoting transparency in its financial system.

Guidelines and Reports

In addition, the FIU has published various guidelines and reports on anti-money laundering and combating the financing of terrorism, including:

  • Nauru’s Mutual Evaluation
  • National Risk Assessment MLTF Nauru 2018
  • Strategic Analysis 2021 to 2023