Kiribati: A Haven for Tax Evasion and Cyber-Enabled Financial Crimes

Kiribati, a small Pacific island nation, is grappling with a growing problem of tax evasion and cyber-enabled financial crimes. The country’s remote location and limited banking services make it an attractive haven for criminals seeking to evade taxes and hide illicit funds.

Organized Crime in Kiribati

While Kiribati has a relatively low presence of organized crime, small, loosely organized criminal networks do exist in the country. These networks are involved in human trafficking, fauna crime, particularly illegal, unreported, and unregulated (IUU) fishing. Foreign criminal actors are not attracted to Kiribati due to its remoteness and lack of accessibility.

Corruption in Kiribati

Corruption is a significant problem in Kiribati, with petty corruption and nepotism widespread. A recent survey found that over half of I-Kiribati citizens had paid a bribe within the previous year. Large-scale corruption has been limited to the country’s fishing industry. The government has acknowledged the need to improve its anti-corruption measures and has taken steps to strengthen its anti-money laundering system.

Anti-Corruption Efforts

Kiribati has established a financial intelligence unit (FIU) and a system for reporting suspicious transactions. Despite these efforts, Kiribati remains vulnerable to money laundering and terrorist financing due to limited resources. The country’s economy is heavily dependent on foreign aid and remittances from overseas workers, making it susceptible to state capture by economic predators.

Economic Challenges

Kiribati faces several economic challenges, including:

• Lack of skilled workers
• Weak infrastructure
• Remoteness from international markets

The public sector dominates economic activity, with ongoing capital projects in infrastructure, including road rehabilitation, water and sanitation projects, and renovations to the international airport.

Criminal Justice and Security

Kiribati’s judicial system has been criticized for corruption and conflicts of interest. The detention system lacks adequate resources, resulting in poor conditions and security issues within prisons. The police force has established units to counter organized crime, but it is seen as inadequate to deal with major threats, including the poaching of marine resources.

Civil Society Efforts

Civil society organizations are working to combat organized crime in Kiribati, particularly through partnerships with non-governmental organizations (NGOs). However, there is a need for greater awareness and understanding of cybercrimes, which are becoming increasingly prevalent in the country.

Recommendations

• Strengthen anti-corruption measures
• Improve financial intelligence and reporting systems
• Enhance criminal justice and security infrastructure
• Increase public awareness and education on cybercrimes