Financial Crime World

Tuvalu Eyes Stricter Measures to Combat Money Laundering and Terrorist Financing

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The government of Tuvalu has announced plans to strengthen its anti-money laundering (AML) and counter-terrorism financing (CFT) measures by implementing stricter regulations for financial institutions operating in the country.

FATF Report Highlights New Requirements

According to a recent report from the Financial Action Task Force (FATF), financial institutions in Tuvalu will be required to establish programs aimed at preventing money laundering and terrorist financing. This includes implementing policies and procedures for sharing information within the group for AML/CFT purposes.

Key Requirements

  • Financial institutions must develop internal policies, procedures, and controls to prevent money laundering and terrorist financing.
  • Adequate screening procedures for hiring employees are required.
  • Ongoing employee training is necessary.
  • An independent audit function must be established to test the system.
  • The type and extent of measures taken will depend on the risk of money laundering and terrorist financing, as well as the size of the business.

Consistency with Home Country Requirements

Financial groups operating in Tuvalu must apply AML/CFT measures consistent with the home country requirements. This includes:

  • Implementing programs against money laundering and terrorist financing that are applicable to all branches and majority-owned subsidiaries.
  • Developing policies and procedures for sharing information required for CDD and money laundering and terrorist financing risk management.

Compliance with Minimum Requirements

In cases where the minimum AML/CFT requirements of the host country are less strict than those of the home country, financial institutions must ensure that their branches and majority-owned subsidiaries implement the requirements of the home country to the extent permitted by host country laws and regulations. If additional measures are deemed necessary, competent authorities in the home country may consider additional supervisory actions, including placing controls on the financial group or requesting it to close down its operations.

Enhancing Tuvalu’s Ability to Combat Money Laundering and Terrorist Financing

The new regulations aim to enhance Tuvalu’s ability to combat money laundering and terrorist financing, and ensure that financial institutions operating in the country are held to high standards of compliance.