Financial Crime World

Palau’s Anti-Money Laundering and Counter-Terrorism Efforts Criticized

Bali, Indonesia - A report presented to the Asia-Pacific Group (APG) has expressed concerns over Palau’s efforts to combat money laundering and terrorist financing.

The assessment mission was conducted in July 2008, and the findings were endorsed by the APG in its plenary meeting. According to the report, while Palau has strengthened its anti-money laundering and counter-terrorism laws, there remains significant room for improvement.

Major Concerns

  • The country’s legislative framework has not been fully implemented, with many regulatory agencies lacking the resources and expertise to effectively enforce the laws.
  • Deficiencies in customer due diligence, record-keeping, and supervisory systems were also highlighted.
  • The Financial Intelligence Unit (FIU) lacks dedicated full-time resources and does not have a documented standard operating procedure for analyzing and disseminating suspicious transaction reports (STRs).
  • Palau has made little progress in freezing terrorist assets under United Nations Security Council Resolutions 1267 and 1373.

Lack of Progress

  • No investigations or prosecutions related to terrorist financing have been conducted.
  • There are no procedures in place to ensure that terrorist funds are frozen immediately and without undue delay.

Recommendations

  • Dedicated resources and expertise are needed to ensure effective implementation of the laws.
  • Improved customer due diligence and record-keeping practices are necessary.
  • The country’s anti-money laundering and counter-terrorism systems need to be brought in line with international standards.

Conclusion

Palau has been urged to expedite its efforts to address these concerns and bring its anti-money laundering and counter-terrorism systems in line with international standards. The assessors praised Palau’s authorities for their cooperation and hospitality during the assessment mission, but emphasized that more needs to be done to strengthen the country’s anti-money laundering and counter-terrorism efforts.