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Palau Adopts APEC Best Practices for Anti-Money Laundering

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Palau has made significant strides in addressing technical compliance deficiencies identified during its 2018 Mutual Evaluation, a key assessment of the country’s anti-money laundering (AML) framework.

Major Upgrades in AML Compliance

As a result of Palau’s efforts to strengthen its AML regulations and practices, the country has been re-rated on five key recommendations by the Asia-Pacific Economic Cooperation (APEC) policy-making forum. The upgrades reflect the following changes:

Recommendation 22: Upgraded from Non-Compliant to Largely Compliant
Recommendation 23: Upgraded from Partially Compliant to Largely Compliant
Recommendations 28 and 36: Upgraded from Non-Compliant to Partially Compliant

Challenges Remain in Implementing VASP Requirements

However, the country still faces challenges in implementing new requirements for Virtual Asset Service Providers (VASPs), with Recommendation 15 downgraded from Partially Compliant to Non-Compliant.

Current Status of Palau’s AML Framework

Palau now has a total of 23 recommendations rated as either C/LC or PC (Partially Compliant), while 13 remain partially compliant and four are non-compliant. As a result, the country has been moved to Enhanced Follow-Up status by APEC, indicating that it requires continued attention and support in its efforts to strengthen its AML framework.

AML Framework Status Breakdown

C/LC (Compliant or Largely Compliant): 23 recommendations
PC (Partially Compliant): 13 recommendations
Non-Compliant: 4 recommendations