Palau Takes Major Steps Towards Financial Inclusion, Combating Crime
In a significant development, the tiny Pacific nation of Palau has made substantial progress in addressing technical compliance deficiencies identified during its 2018 Mutual Evaluation. According to recent reports, Palau has been re-rated on five key recommendations, marking a major milestone in its efforts towards financial inclusion and combating financial crime.
Notable Upgrades
Among the notable upgrades is Recommendation 22, which was previously deemed Non Compliant but is now classified as Largely Compliant. Similarly, Recommendations 23 and 36 were upgraded from Partially Compliant to Largely Compliant, while Recommendation 28 improved from Non Compliant to Partially Compliant.
Remaining Challenges
However, Palau still has work to do in implementing new requirements for Virtual Asset Service Providers (VASPs), with Recommendation R15 being downgraded from Partially Compliant to Non Compliant. Despite this setback, the country’s overall progress is a welcome development.
Current Status
As of current, Palau has:
- 23 Recommendations rated as C/Largely Compliant
- 13 Recommendations rated Partially Compliant
- 4 Recommendations classified as Non Compliant
As a result, the country has been moved to enhanced follow-up, underscoring the need for continued vigilance in addressing remaining issues.
Future Outlook
Palau’s progress towards financial inclusion and combating crime is a significant achievement, and the country is expected to build on this momentum in the coming months. With ongoing efforts to strengthen its anti-money laundering and counter-terrorist financing frameworks, Palau is poised to become an even more attractive destination for businesses and investors seeking to operate in a secure and transparent environment.