Financial Crime World

Niue Lacks Effective Anti-Money Laundering and Combating the Financing of Terrorism Measures

Wellington, New Zealand - A recent assessment by international financial experts has revealed that Niue, a small Pacific island nation with a population of 1,460, lacks effective anti-money laundering (AML) and combating the financing of terrorism (CFT) measures.

Limited Reporting Obligations

According to the report, Niue’s Financial Transactions Reporting Act (FTRA) creates obligations for financial institutions to report suspicious transactions to the country’s Financial Intelligence Unit (FIU). However:

  • No reports have been filed to date
  • The scope of the reporting obligation is limited by a narrow range of predicate offenses
  • There is no definition of what constitutes “reasonable grounds to suspect”

Regulatory and Supervisory Bodies

The FTRA provides satisfactory safe harbor and tipping-off provisions. However, Niue does not have:

  • A prudent regulatory or supervisory body in place to oversee compliance with AML/CFT requirements
  • Procedures and capacity to supervise financial institutions

Vulnerabilities

Niue’s lack of effective measures poses significant vulnerabilities, including:

  • No requirement for fit and proper testing for banking and corporate entities at market entry, leaving the country vulnerable to criminal infiltration
  • No administrative sanctions in place, only criminal penalties, which may not be effective deterrents

Corporate Entities and Beneficial Ownership

The country’s legal framework for corporate entities requires registration of corporations but lacks:

  • Beneficial ownership information, making it difficult for law enforcement agencies to track suspicious activities

International Agreements and Extradition

Niue has not implemented United Nations Security Council Resolution 1267 or 1373, and is not a party to the Palermo or Vienna Conventions. Additionally:

  • The country’s extradition law includes money laundering and terrorist financing as grounds for extradition, but no countries are designated, making it difficult to extradite suspected offenders

Recommendations

The report concludes that Niue’s lack of effective AML/CFT measures poses a risk to the international financial system and recommends that the country take immediate steps to address these shortcomings.