Vanuatu’s Legislative Framework Lacks Key Provisions to Combat Terrorism Financing

Port Vila, Vanuatu - Assessment Reveals Weaknesses in Anti-Terrorism Financing Regime

A recent assessment conducted by an independent consultant has found that Vanuatu’s legislative framework to combat terrorism financing (TF) is generally consistent with international standards, but lacks key provisions to effectively prevent and detect TF. The assessment highlights several weaknesses in Vanuatu’s anti-money laundering (AML) and combating the financing of terrorism (CFT) regime.

Key Findings

• Vanuatu’s law does not adequately criminalize TF, nor does it provide sufficient powers for investigators and prosecutors to take action against individuals or entities suspected of engaging in TF activities.
• The financial intelligence unit lacks the necessary resources and authority to effectively collect, analyze, and disseminate financial information.
• Weaknesses in the system for identifying and reporting suspicious transactions were identified, as well as a lack of comprehensive risk-based approach to AML/CFT.
• Law enforcement agencies and regulatory bodies do not have adequate resources and training to effectively combat TF.

Progress Made

Despite these weaknesses, Vanuatu has made some progress in recent years. The country has increased its levels of technical compliance with the Financial Action Task Force (FATF) standards, particularly in the areas of customer due diligence and reporting of suspicious transactions.

Recommendations

The assessment makes several recommendations to Vanuatu’s government:

• Amend laws to adequately criminalize TF.
• Provide sufficient powers for investigators and prosecutors.
• Establish a comprehensive risk-based approach to AML/CFT.
• Provide additional resources and authority to the financial intelligence unit to effectively collect, analyze, and disseminate financial information.

Conclusion

While Vanuatu has made some progress in recent years, its AML/CFT regime remains vulnerable to TF risks and requires significant strengthening of its legislative framework and implementation of AML/CFT measures. To effectively combat these risks, Vanuatu needs to strengthen its legislative framework and improve its implementation of AML/CFT measures.

High-Risk Sectors

The assessment notes that the high-risk sectors such as international banking, trust and company service providers, and currency exchange businesses remain vulnerable to TF risks. To effectively combat these risks, Vanuatu’s government needs to take urgent action to strengthen its legislative framework and improve its implementation of AML/CFT measures.