Vulnerable Groups Warned About Financial Crimes in Nauru
The International Chamber of Commerce’s (ICC) Financial Investigation Bureau (FIB) has issued a warning about several blacklisted banks registered in Nauru that continue to operate. These institutions were designated as money laundering concerns by the US Department of the Treasury back in 2002.
Background on Nauru’s Blacklist Status
Nauru was designated as a money laundering concern by the US Department of the Treasury in 2002 due to its lack of effective anti-money laundering laws and regulations. As a result, all financial dealings between US institutions and any Nauru-licensed institution have been prohibited since then.
US Legislation Targets Offshore Banks
The introduction of the USA Patriot Act in October 2001 led to amendments being made to the anti-money laundering provisions of the Bank Secrecy Act. This targeted some 400 offshore banks with no physical or legal residence, effectively cutting them off from US financial institutions.
FIB Concerns and Warnings
The FIB is concerned that some blacklisted Nauru financial institutions may be disguising their origins and attempting to re-emerge in the market. The bureau’s assistant director, Jon Merrett, warns that:
- Some of these institutions have gone quiet for a time but are now trying to persuade people they are dealing with an entirely different entity.
- US banks may unwittingly trade with or maintain correspondent relationships with blacklisted Nauru financial institutions due to confusion over similar names.
Protective Measures and Compliance Obligations
The FIB has catalogued a complete list of all Nauru banks and financial institutions named by the US Department of the Treasury. In instances where banks find themselves dealing with one of the blacklisted financial institutions, the FIB can offer protective measures such as:
- Tracking assets
- Exiting correspondent relationships
Financial institutions are advised to contact the FIB for clarification on how to avoid inadvertently compromising compliance obligations. To take advantage of this service, they should email fib@icc-ccs.org for full details.