Palau Makes Progress in Combating Money Laundering and Terrorist Financing with Upgraded Ratings

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Palau has made significant strides in addressing technical compliance deficiencies identified during its 2018 Mutual Evaluation, earning upgraded ratings on five key recommendations. This progress is a testament to the country’s commitment to strengthening its anti-money laundering (AML) and combating the financing of terrorism (CFT) framework.

Upgraded Ratings

According to the latest assessment, Recommendation 22 has been upgraded from Non Compliant to Largely Compliant, while Recommendation 23 has moved from Partially Compliant to Largely Compliant. Additionally, Recommendation 28 is now rated Partially Compliant, and Recommendation 36 has been upgraded from Non Compliant to Largely Compliant.

Key Recommendations

• Recommendation 22: Upgraded from Non Compliant to Largely Compliant
• Recommendation 23: Upgraded from Partially Compliant to Largely Compliant
• Recommendation 28: Rated Partially Compliant
• Recommendation 36: Upgraded from Non Compliant to Largely Compliant

Challenges Remain

While Palau has made significant progress, it still faces challenges in implementing the new Virtual Asset Service Provider (VASP) requirements. R15 has been downgraded from Partially Compliant to Non Compliant. Despite this setback, the country’s overall progress has earned it a move to enhanced follow-up status.

Challenges Ahead

• Implementing VASP requirements

Next Steps

Palau now has 23 recommendations rated C/Largely Compliant, 13 rated Partially Compliant, and four non-compliant. The country is tasked with further improving its AML and CFT framework to meet international standards.

Roadmap for Improvement

• Continue to implement VASP requirements
• Address remaining compliance deficiencies