Tonga's AML/CFT Framework Flawed

Tonga’s Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Framework: Key Issues and Challenges

Low levels of effectiveness: Tonga’s AML/CFT framework has been found to be ineffective in achieving its objectives, except for one outcome.
Limited enforcement: The technical requirements outlined in the Regulations are not enforceable due to their limited application.
Inadequate resources and expertise: There is a lack of policy and operational priorities, inadequate training, expertise, and resources allocated to AML/CFT issues.

Minor shortcomings in policies and coordination: Tonga has minor shortcomings in its Recommendations on AML/CFT policies and co-ordination.
Moderate shortcomings in risk assessment: There are moderate shortcomings in assessing risk and applying a risk-based approach.
Fundamental improvements needed: Fundamental improvements are required in understanding ML/TF risks, policy, and co-ordination.

Outdated information: Tonga’s first NRA was adopted in 2019, but the information collected for the NRA was outdated by that year.
Limited statistics: Limited statistics are available to base the risk assessment on.
Lack of consultation: There has been no consultation across agencies and the private sector since the NRA was adopted.
Critical information lacking: The lack of critical information affects the reasonableness of Tonga’s risk understanding.

Limited understanding of ML/TF risks: Competent authorities, LEAs, and private sector entities display a limited understanding of ML risks, particularly predicate crimes.
Little understanding of TF risks: There is little understanding of TF risks within sectors and more widely.

Policy endorsement: The policy was endorsed by Cabinet during the on-site visit, but some priority areas were not included.
Alignment with identified ML/TF risks: The policy is generally in line with identified ML/TF risks in the NRA.