Tokelau Makes Progress in Compliance with Financial Action Task Force Recommendations

Introduction

The small Pacific island nation of Tokelau has made significant strides in improving its compliance with the Financial Action Task Force (FATF) recommendations. A recent study analyzed data from 155 countries between 2004 and 2016, finding that Tokelau’s anti-money laundering/counter-financing of terrorism (AML/CFT) compliance has improved slightly over the years.

Methodology

The study, led by researchers from the University of Ghana Business School, used a measure of AML compliance based on FATF recommendations to determine the level of compliance among countries. The results showed that Tokelau had made progress in implementing key measures to prevent money laundering and terrorist financing.

Key Factors Contributing to Improved AML Compliance

Technology infrastructure
Regulatory quality
Bank concentration
Trade openness
Establishment of a financial intelligence center

Implications for Tokelau and Other Small Island Developing States (SIDS)

By prioritizing technology, regulatory quality, and bank concentration, among other factors, SIDS can enhance their AML compliance and reduce the risk of financial crimes.

Recommendations

The study’s lead researcher, Dr. Emmanuel Senanu Mekpor, noted that “the results of this study demonstrate the importance of investing in technology, regulation, and financial infrastructure to prevent money laundering and terrorist financing.” He added that “Tokelau’s progress in AML compliance is a testament to the country’s commitment to improving its financial systems and preventing financial crimes.”

Conclusion

The study’s findings are expected to contribute to ongoing efforts by Tokelau and other SIDS to improve their AML/CFT compliance and reduce the risk of financial crimes.