Palau Tightens Compliance with Financial Institutions

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In its ongoing effort to strengthen financial regulations, Palau has made significant strides in complying with international standards and regional initiatives.

Membership in Asia/Pacific Group (APG) and Financial Action Task Force (FATF)

Palau joined the APG in 2002 and became an associate member of the FATF, a global anti-money laundering and counter-terrorism financing standard-setting body. As a member, Palau has committed to adhering to the FATF’s 40 Recommendations and 11 Immediate Outcomes without reservation.

Mutual Evaluation Examinations

Palau has undergone two mutual evaluation examinations, with the most recent one taking place in 2018. The country is expected to work towards full compliance with the FATF Standards.

Participation in Regional Initiatives

In addition to its APG membership, Palau has also joined the Pacific Financial Intelligence Community (PFIC), a regional body that aims to promote cooperation among Pacific Financial Intelligence Units. The PFIC allows member countries to share experiences and best practices in fighting financial crimes.

Pacific AML/CFT Supervisors’ Forum

Palau is an active participant in the Pacific AML/CFT Supervisors’ Forum, which provides a platform for anti-money laundering and counter-terrorism financing supervisors from the region to connect and share their challenges.

National-Level Efforts

At the national level, Palau has established several working groups and units to combat financial crimes. The Money Laundering Working Group, chaired by the Chairman of the Financial Institutions Commission, meets quarterly to coordinate efforts against money laundering, illicit financial activities, and terrorism financing.

Financial Crimes Investigative Unit (FCIU)

The country has also set up the FCIU, a collaborative forum for reviewing and investigating suspicious transactions reported to the Financial Intelligence Unit. The FCIU brings together investigators from various agencies, including the FIU, Offices of the Attorney General, and Special Prosecutor.

Impact on the Country’s Financial Sector and Economy

Palau’s commitment to strengthening its financial regulations and compliance with international standards is expected to have a positive impact on the country’s financial sector and economy as a whole.