Financial Crime World

Tokelau Fails to Meet Financial Action Task Force Recommendations

Tokelau Struggles with Money Laundering and Terrorist Financing

A recent report has revealed that Tokelau, a small island nation in the Pacific, is still facing significant challenges in implementing the Financial Action Task Force (FATF) recommendations to combat money laundering and terrorist financing. Despite some progress in establishing laws and regulations, Tokelau’s compliance with these recommendations remains low.

FATF Recommendations Not Fully Implemented

According to the report, 76% of countries have now satisfactorily implemented the FATF’s 40 Recommendations, which is a significant improvement from just 36% in 2012. However, Tokelau still lags behind other countries in taking effective action.

Challenges Faced by Tokelau:

  • Difficulty investigating and prosecuting high-profile cross-border cases
  • Inadequate laws and regulations to prevent anonymous shell companies and trusts being used for illicit purposes
  • Lack of resources and capacity to investigate and prosecute money laundering and terrorist financing crimes

FATF Response to Challenges

The FATF has made changes to its assessment process for the next cycle of mutual evaluations, which will focus on more timely, risk-based, and effective assessments. The changes include:

  • A significantly shorter mutual evaluation cycle
  • Greater emphasis on major risks and context
  • A results-orientated follow-up assessment process

Call to Action for Tokelau Government

The FATF has urged the Tokelau government to take immediate action to address these challenges and improve its compliance with the FATF recommendations. Failure to do so may result in reputational damage and potential economic consequences for the country.

Tokelau Minister’s Commitment

In a statement, the Tokelau Minister of Finance expressed commitment to improving the country’s anti-money laundering and combating financing of terrorism (AML/CFT) framework, but acknowledged that more work was needed to address the challenges identified by the report.