Financial Crime World

NAURU: Financial Institution Compliance Policies Under Scrutiny

The Department of Justice and Border Control in Nauru has been working diligently to strengthen its financial institution compliance policies, aimed at curbing money laundering and terrorist financing activities.

Background

In preparation for a Mutual Evaluation (ME) by the Financial Actions Task Force (FATF), the Financial Intelligence Unit (FIU) collaborated with the Office of the Legislative Drafter to draft new laws and amend existing ones. The FIU also received technical assistance from the Asia Pacific Group on Money Laundering (APGML) to ensure that Nauru’s legislation meets international standards.

New Regulations

Several regulations have been introduced, including:

  • Anti-Money Laundering and Targeted Financial Sanctions (Parallel Financial Investigation) Regulations 2024
  • Proceeds of Crime Act 2004 & Regulations
  • Trusts (Trustee Duties) Regulations 2023
  • Counter Terrorism and Transnational Organised Crime (Amendment of the Schedule) Regulations 2023

Guidance Materials

The FIU has developed several circulars, guides, and forms to facilitate compliance by financial institutions, including:

  • Non-Profit Organisations or Non-Profit Organisations Best Practice Guide
  • Beneficial Ownership Act 2017 & Regulations
  • Business Licences (Non-Operational Businesses Record Keeping) Regulations 2023

National Strategy

The FIU has released several guides and developed a National Strategy for Anti-Money Laundering and Combating the Financing of Terrorism, as well as an:

  • Anti-Money Laundering and Targeted Financial Sanctions (Fit and Proper Person) Criteria
  • Anti-Money Laundering and Targeted Financial Sanctions (Simplified Due Diligence) Guide 2023
  • Suspicious Activity Report Form
  • Nauru Virtual Asset Service Provider Policy
  • Cash Border Regulation Framework Guide

Recognition

The department’s efforts have been recognized by the FATF, which has commended Nauru for its progress in implementing its AML/CFT regime. The department continues to work towards strengthening its financial institution compliance policies to prevent money laundering and terrorist financing activities.

Next Steps

Nauru’s Mutual Evaluation is expected to assess the country’s compliance with the FATF Recommendations on Money Laundering and Combating the Financing of Terrorism, as well as review the effectiveness of Nauru’s anti-money laundering and combating the financing of terrorism (AML/CFT) regime.