Palau’s Financial Institutions Urged to Comply with Money Laundering and Proceeds of Crime Act

Public Notice Issued by Republic of Palau Financial Intelligence Unit (FIU)

Koror, Palau - June 27, 2023: The Republic of Palau Financial Intelligence Unit (FIU) has published a public notice announcing the publication of its Virtual Asset Service Provider Requirement to Comply with the Money Laundering and Proceeds of Crime Act and Regulations on its website.

Ensuring Compliance with the Money Laundering and Proceeds of Crime Act

As part of its duties, the FIU is responsible for ensuring that entities under its supervision adhere to the Money Laundering and Proceeds of Crime Act (MLPCA). The MLPCA requires Virtual Asset Service Providers (VASPs), including virtual asset exchanges, custodial wallets, and other defined entities, to register with the FIU as financial institutions. VASPs operating within the Republic of Palau are mandated to comply with the MLPCA, failure to do so will result in administrative, civil, and/or criminal sanctions.

Compliance Requirements for Financial Institutions

Entities under FIU supervision, including:

Financial Institutions
Designated Non-Financial Businesses and Professions (DFNBPs)
Virtual Asset Service Providers (VASPs)

are encouraged to reach out to the FIU at 488-5080 if they have any questions regarding compliance requirements.

Updating the Website

The FIU is currently updating its website to better reflect its supervisory activities. This move aims to provide a more comprehensive understanding of the FIU’s role in ensuring compliance with the MLPCA and related regulations.

By complying with the Money Laundering and Proceeds of Crime Act, financial institutions in Palau can help prevent money laundering and terrorist financing, while also protecting the integrity of the country’s financial system.