Vanuatu’s AML Regulations Under Fire from Global Financial Watchdog
A recent statement from the Asia/Pacific Group on Money Laundering (APG) has expressed concern over Vanuatu’s inadequate anti-money laundering and combating the financing of terrorism (AML/CFT) system. Despite efforts to address previous deficiencies, many serious issues remain unresolved.
Serious Issues Remain Unresolved
The APG’s latest mutual evaluation report, adopted in July 2015, reveals that Vanuatu’s system is struggling to effectively implement all global AML/CFT standards set by the Financial Action Task Force (FATF). The report highlights several key technical compliance deficiencies, including:
- Inadequate criminalization of money laundering and terrorist financing
- Insufficient measures to enforce UN sanctions on terrorists
- Poor customer due diligence practices
- Weak supervisory frameworks for financial institutions
APG’s Concerns and Recommendations
The APG has called on Vanuatu to swiftly address these remaining issues and enhance the effectiveness of its AML/CFT system. The organization will maintain a public statement expressing these concerns until the most critical deficiencies are adequately addressed, as determined by the APG membership through its peer monitoring and follow-up process.
Previous Efforts and Shortcomings
Vanuatu had enacted and implemented the Anti-Money Laundering and Counter-Terrorism Financing Act and regulations in June 2014, which addressed some but not all CDD-related issues. Amendments to the Proceeds of Crime Act and Counter Terrorism and Transnational and Organized Crime Act were brought into force in January 2015, but failed to adequately address deficiencies related to money laundering and terrorist financing.
APG’s Findings and Recommendations
The APG’s findings are reflected in Vanuatu’s third mutual evaluation report, which was adopted in July 2015. The report reveals low levels of effectiveness across all 11 FATF Immediate Outcomes. In response, the APG membership recently referred Vanuatu to the FATF’s International Cooperation Review Group for further scrutiny and action.
Full Public Statement Available
The full amended public statement can be found on the APG website.