Tonga Urged to Align with Global Standards for Combating Financial Crime
The Kingdom of Tonga is being encouraged to adopt and implement global standards for combating financial crime to strengthen its regulatory framework and prevent the flow of illicit funds through its financial system.
The Current Regulatory Framework Falls Short
According to experts, the current regulatory framework in place in Tonga is not effective enough to tackle the evolving networks and tools available to criminals. This has resulted in significant investments by the financial services industry to combat financial crime, but with limited success.
Key Areas for Improvement
A recent report from Deloitte UK and The Institute of International Finance highlights seven key areas for improvement in financial crime regulation:
- Enhancing global systemic improvements for financial crime risk management: Strengthening the ability of financial institutions to identify and manage financial crime risks.
- Advancing public private partnerships: Collaborating with private sector entities to enhance information sharing and resource allocation.
- Improving cross-border information sharing: Enhancing cooperation between countries to prevent and combat financial crime.
- Increasing the use of technology to combat illicit finance: Leveraging innovative technologies to detect and prevent financial crime.
Recommendations for Long-Term Systemic Reform
The report provides detailed recommendations for long-term systemic reform, which are seen as crucial in mitigating illicit financial flows through regulatory reform, international cooperation, and an intelligence-led approach.
A Call for Coordination and Global Standards Alignment
Financial institutions and law enforcement agencies in Tonga have been working closely with policy makers and regulators to address these issues. However, experts believe that a more coordinated effort is needed to align the country’s standards with global best practices.
The Benefits of Adopting Global Standards
The adoption of these global standards will not only help prevent financial crime but also enhance the integrity and stability of Tonga’s financial system, which has significant implications for the country’s economic development and reputation.