Tuvalu Takes a Bolder Approach to Fighting Financial Crime

A Shift towards Risk-Based Compliance

In an effort to combat money laundering and terrorist financing, Tuvalu’s financial authorities are adopting a more nuanced approach. This shift prioritizes risk over mere compliance, aiming to identify, assess, and mitigate specific risks rather than implementing blanket measures.

Why the Change?

• Recognizing that not all financial institutions and businesses are created equal when it comes to money laundering and terrorist financing risks
• Focusing resources on high-risk areas while minimizing unnecessary burdens on lower-risk entities

A Comprehensive National Risk Assessment

To achieve its new approach, Tuvalu plans to conduct a thorough national risk assessment. This will involve:

• Identifying the most significant threats to the country’s financial system
• Developing targeted strategies to address these risks
• Taking a deep understanding of Tuvalu’s unique vulnerabilities and strengths into account

Collaboration and Shared Responsibility

The government emphasizes the importance of collaboration between state authorities, supervisory bodies, and the private sector in implementing this new approach. Each entity is expected to:

• Take ownership of its role in mitigating risks
• Develop tailored solutions that suit their specific needs

A More Proactive Stance against Financial Crime

Experts praise Tuvalu’s financial authorities for taking a more proactive stance against financial crime. By prioritizing the most vulnerable areas and taking a more granular view of risk, the country is poised to make meaningful strides in its fight against money laundering and terrorist financing.

This new approach marks a significant departure from previous approaches, which often focused on compliance rather than actual risk reduction. With its renewed focus on risk-based compliance, Tuvalu is demonstrating its commitment to tackling financial crime head-on.