Title: Palau Cracks Down on Financial Crimes: Strengthening Laws and Regulations

Republic of Palau Takes Significant Strides against Money Laundering and Terrorist Financing

The island nation of Palau, located in the Pacific Ocean, has made notable progress in the fight against money laundering and the financing of terrorism (ML/FT). In recognition of its efforts, the Asia Pacific Group on Money Laundering (APG) recently completed an on-site evaluation of Palau’s AML/CFT framework.

Enhancing Legislation & Regulations

Republic of Palau has made substantial progress since 2001 when it first established its AML/CFT legislative framework.
In 2021, the nation reinforced its regulatory tools by amending the Money Laundering and Proceeds of Crime Act (MLPCA) and the Financial Institutions Act.
The Counter-Terrorism Act and the Cash Courier Disclosure Act were enacted in 2007.

Extensive Coverage of Crimes & Financial Disclosures

Money Laundering as a Criminal Offense

Money laundering is now a criminal offense under the MLPCA.
The amendment broadens the definition of predicate offenses to include crimes related to arms trafficking and other serious crimes.

Compelled Disclosures of Information

Courts can issue orders compelling the disclosure of information related to suspected money laundering, terrorist financing, or other financial crimes.

Cash Dealers’ Regulations

Cash dealers are subject to new regulations, such as reporting transactions over $10,000.

Continuous Collaboration with International Financial Agencies

IMF’s Role

Since 1981, the International Monetary Fund (IMF) has been working with Palau, providing guidance on economic and financial policies.
The IMF’s Executive Board praised Palau’s recent legislative steps and encouraged the continued implementation and enforcement of these measures.

Challenges Ahead

Despite these accomplishments, challenges remain for Palau in fully implementing its commitments to the APG. Improving the overall capacity of its authorities in investigating financial crimes is a priority area.

International Community’s Focus on Combating Financial Crimes

With the heightened focus on combating money laundering and terrorist financing, Palau stands to benefit from the global community’s efforts to curb financial crimes and promote greater economic stability and security.