Financial Crime World

Financial Inclusion and Anti-Money Laundering Efforts Intensify in Tuvalu

Paris, February 25 - A New Era of Balance between Crime Prevention and Financial Inclusion

The Financial Action Task Force (FATF) has welcomed a significant development in Tuvalu’s financial sector, as the country takes a major step towards promoting well-regulated financial systems and services while preventing money laundering and terrorist financing.

A Joint Effort to Combat Crime and Promote Financial Inclusion

In an effort to strike a balance between combating crime and promoting financial inclusion, FATF has been working closely with international partners including the World Bank and the International Monetary Fund. The joint effort aims to help countries like Tuvalu design effective anti-money laundering and counter-terrorism financing (AML/CFT) measures that meet their national goals without excluding legitimate businesses and consumers from the financial system.

Key Principles of Financial Inclusion

According to a revised Guidance paper published by FATF, countries must ensure that AML/CFT controls do not hinder access to well-regulated financial services for vulnerable groups such as:

  • Low-income individuals
  • Rural communities
  • Those lacking documentation

The document provides clarity on how FATF Recommendations can be interpreted to support financial inclusion while maintaining robust AML/CFT safeguards.

A Risk-Based Approach to AML/CFT

The revised Guidance emphasizes the importance of a risk-based approach (RBA) in AML/CFT systems. By developing risk-sensitive frameworks, countries like Tuvalu can create more inclusive formal financial systems that cater to the needs of a broader population, including the most vulnerable and underserved groups.

Tuvalu’s Commitment to Financial Inclusion

Tuvalu’s efforts to strengthen its AML/CFT regime demonstrate the country’s commitment to promoting financial inclusion while preventing illicit activities. The development is expected to have a positive impact on the country’s economic growth and social welfare by providing access to appropriate financial services for a larger proportion of its population.