Financial Crime World

Drug Offences on the Rise: Nauru Takes Stricter Measures

A growing concern in the region, drug-related offences have been on the rise in Nauru, prompting authorities to take stricter measures to combat the problem.

Threat Assessment

According to recent intelligence, while the financial sector is not at significant risk due to strict internal controls implemented by agencies, new technologies and business products pose a rising threat. The Financial Intelligence Unit (FIU) has issued a policy document outlining international and domestic requirements for reporting entities, the FIU, and related supervisors.

Regulation of Virtual Assets

To address this concern, Nauru has included Virtual Assets (VA) and Virtual Asset Service Providers (VASP) in its Anti-Money Laundering (AML) and Terrorism Financing (TFS) Act 2023. This requirement is in line with the Financial Action Task Force (FATF) Recommendations.

Requirements for VASPs

VASPs operating in Nauru must comply with relevant laws, including:

  • AML- TFS Act 2023
  • Business Names Registration Act 2018
  • Other applicable laws

Currently, no VASPs have been identified as operational in Nauru. The FIU has also developed a Virtual Assets Policy to ensure transparency and accountability requirements apply to both traditional financial institutions and VASPs.

Collaboration with Authorities

Nauru’s Financial Intelligence Unit (FIU) works closely with supervisory authorities, law enforcement agencies, and other relevant bodies to identify specific risks and vulnerabilities. The FIU has introduced a National Strategy for Anti-Money Laundering and Combatting the Financing of Terrorism 2022-2025.

Case Study: FIU Dissemination to Nauru Police Force

A recent case study showcases the coordination between the FIU and law enforcement authorities. The FIU disseminated information to the Nauru Police Force regarding alleged forgery at the Passport office involving an unemployed Nauruan national.

Nauru’s Approach in Combatting Crimes

Nauru’s approach involves close collaboration with all stakeholders through:

  • AML Governance Committee (AMLGC)
  • AML Officials Committee (AMLOC)
  • Private Partners Committee (PPC)

These committees work together to share information, identify risks, and find mitigating strategies. The FIU shares crime trends and patterns with stakeholders, while encouraging their contribution to finding solutions.

Collective Effort

The collaborative approach ensures involvement from all sectors of the Nauruan community, fostering a collective effort to combat crimes and protect the country’s financial system.