High-Risk Customers Pose Concern for Financial Regulators in Niue

International Evaluation Highlights Concerns Over AML/CFT Measures

A recent evaluation by international financial regulators has highlighted concerns over high-risk customers and the effectiveness of anti-money laundering (AML) and combating the financing of terrorism (CFT) measures in Niue.

Inadequate Procedures for Identifying High-Risk Customers

• Niue’s financial institutions do not have adequate procedures in place to identify and manage relationships with foreign politically exposed persons (PEPs).
• There is no requirement for senior management approval to continue a business relationship with an existing customer who becomes a PEP, nor is there an obligation to check beneficial owners being PEPs.

Lack of Transparency in Corporate Ownership Structure

• Corporations are required to be registered, but the data available with the Registrar only includes formal ownership information and does not require beneficial ownership details.
• This lack of transparency makes it difficult for regulators to track and identify high-risk customers.

Inadequate Supervision of DNFBPs and Lack of International Cooperation

• Niue’s Financial Intelligence Unit (FIU) does not supervise designated non-financial businesses and professions (DNFBPs), such as lawyers and accountants, effectively leaving them unregulated.
• The country has not implemented several key international conventions, including the Palermo and Vienna Conventions.
• Niue’s extradition law only allows for extradition to countries designated in the law, and no countries are currently designated.

Call to Action

Financial regulators have called on Niue to take immediate action to strengthen its AML/CFT regime and improve transparency and cooperation with international partners.

“We urge the government of Niue to take a proactive approach to addressing these concerns and ensuring that its financial sector is transparent and compliant with international standards,” said a spokesperson for the financial regulator.

Deadline Set for Implementation of New Measures

• Niue’s financial institutions have been given a deadline to implement new measures to improve their AML/CFT controls and reporting requirements.
• The country’s FIU has also been tasked with strengthening its supervision of DNFBPs and improving international cooperation.

Government Pledges to Address Concerns

The government of Niue has pledged to work closely with international partners to address these concerns and ensure that its financial sector is strong, stable, and secure for the benefit of its citizens and the global economy.