Financial Crime World

Regulatory Updates on Financial Crimes in Brunei Darussalam

The Financial Action Task Force (FATF) has released its latest ratings on the implementation of anti-money laundering and counter-terrorism financing regulations in Brunei Darussalam. The report assesses the country’s compliance with 40 key recommendations, providing a snapshot of its regulatory landscape.

Assessing Risk and Applying Risk-Based Approach

Brunei Darussalam has been rated ‘LC’ (largely compliant) for assessing risk and applying a risk-based approach. While the country has made efforts to implement effective risk assessment procedures, there is room for improvement in terms of ensuring that these measures are comprehensive and proportionate.

  • Ensure that risk assessments are regularly updated and reviewed
  • Implement robust procedures for identifying high-risk customers and transactions
  • Develop clear guidelines on the application of a risk-based approach

National Cooperation and Coordination

The FATF has also rated Brunei Darussalam ‘LC’ for national cooperation and coordination. The report notes that while the country has established a functional framework for coordination among agencies, there is scope for improvement in terms of information sharing and intelligence gathering.

  • Strengthen collaboration between law enforcement agencies and financial institutions
  • Implement regular information-sharing mechanisms to enhance intelligence gathering
  • Develop clear guidelines on the roles and responsibilities of each agency

Money Laundering Offence

Brunei Darussalam has been rated ‘LC’ for its money laundering offence provisions. While the country’s laws provide for adequate penalties and sanctions, there are concerns regarding the lack of clarity on certain aspects of the legislation.

  • Clarify the definition of money laundering in the country’s legislation
  • Implement robust procedures for detecting and preventing money laundering
  • Develop clear guidelines on the application of money laundering offences

Confiscation and Provisional Measures

The FATF has rated Brunei Darussalam ‘C’ (compliant) for confiscation and provisional measures. The report notes that the country has made significant progress in strengthening its asset recovery mechanisms, but there are still areas where improvement is needed.

  • Implement robust procedures for seizing and freezing assets
  • Develop clear guidelines on the application of confiscation orders
  • Enhance cooperation with foreign authorities to recover stolen assets

Terrorist Financing Offence

Brunei Darussalam has been rated ‘LC’ for its terrorist financing offence provisions. While the country’s laws provide for adequate penalties and sanctions, there are concerns regarding the lack of clarity on certain aspects of the legislation.

  • Clarify the definition of terrorist financing in the country’s legislation
  • Implement robust procedures for detecting and preventing terrorist financing
  • Develop clear guidelines on the application of terrorist financing offences

Targeted Financial Sanctions

The FATF has rated Brunei Darussalam ‘NC’ (non-compliant) for targeted financial sanctions related to terrorism and terrorist financing. The report notes that while the country has implemented some measures, it lacks a comprehensive framework for imposing and maintaining such sanctions.

  • Develop a comprehensive framework for implementing targeted financial sanctions
  • Implement robust procedures for identifying and listing individuals and entities subject to sanctions
  • Enhance cooperation with foreign authorities to implement sanctions

Financial Institution Secrecy Laws

Brunei Darussalam has been rated ‘C’ for its financial institution secrecy laws. While the country’s laws provide for adequate confidentiality provisions, there are concerns regarding the lack of clarity on certain aspects of the legislation.

  • Clarify the definition of financial institutions in the country’s legislation
  • Implement robust procedures for maintaining customer confidentiality
  • Develop clear guidelines on the application of financial institution secrecy laws

Customer Due Diligence

The FATF has rated Brunei Darussalam ‘PC’ (partially compliant) for customer due diligence requirements. The report notes that while the country has made efforts to implement effective CDD procedures, there is room for improvement in terms of ensuring that these measures are comprehensive and proportionate.

  • Implement robust procedures for verifying customer identities
  • Develop clear guidelines on the application of CDD requirements
  • Enhance cooperation with foreign authorities to share information on high-risk customers

Record Keeping

Brunei Darussalam has been rated ‘LC’ for record keeping requirements. While the country’s laws provide for adequate provisions on customer data and transactions, there are concerns regarding the lack of clarity on certain aspects of the legislation.

  • Clarify the definition of record keeping in the country’s legislation
  • Implement robust procedures for maintaining accurate and complete records
  • Develop clear guidelines on the application of record keeping requirements

Politically Exposed Persons

The FATF has rated Brunei Darussalam ‘LC’ for PEP provisions. The report notes that while the country has implemented some measures to identify and assess PEPs, it lacks a comprehensive framework for managing such relationships.

  • Develop a comprehensive framework for identifying and assessing PEPs
  • Implement robust procedures for verifying PEP identities
  • Enhance cooperation with foreign authorities to share information on PEPs