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Tonga’s Anti-Money Laundering and Counter-Terrorist Financing Efforts Fall Short

A recent assessment of Tonga’s anti-money laundering and counter-terrorist financing measures has revealed a number of deficiencies, despite efforts to improve its compliance.

Deficiencies Revealed

The assessment, conducted by the Asia-Pacific Group on Money Laundering (APG), found that Tonga has not effectively implemented many of the Financial Action Task Force (FATF) recommendations aimed at preventing money laundering and terrorist financing. The country’s National Risk Assessment (NRA) is also outdated and lacks critical information.

Areas of Concern

• Lack of Enforceable Regulations: Tonga’s Money Laundering Prevention and Combating the Financing of Terrorism Regulations do not contain sanctions or penalties for non-compliance.
• Inadequate Risk Assessment: The NRA is outdated and lacks critical information on money laundering and terrorist financing risks.
• Limited Understanding of ML/TF Risks: Competent authorities, law enforcement agencies, and private sector entities lack a thorough understanding of the risks associated with money laundering and terrorist financing.

APG’s Recommendations

The APG has urged Tonga to address these deficiencies by:

• Improving its risk assessment
• Strengthening its regulations
• Increasing resources for its anti-money laundering and counter-terrorist financing efforts

Tonga’s Response

Tonga’s authorities have acknowledged the need to improve their anti-money laundering and counter-terrorist financing measures. The country has established a Cabinet Committee on Serious Financial Crimes (CCSFC) to coordinate its efforts in this area.

Conclusion

Tonga’s anti-money laundering and counter-terrorist financing efforts are crucial in preventing financial crimes and protecting the country’s financial system. While the country has made some progress in this area, more needs to be done to address the deficiencies identified by the APG assessment.