Vanuatu Under Fire for Failing to Address Money Laundering Concerns

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Despite efforts to improve its anti-money laundering and combating the financing of terrorism (AML/CFT) system, Vanuatu remains a concern for the Asia-Pacific Group on Money Laundering (APG). A recent public statement from the APG highlights serious deficiencies that have yet to be adequately addressed.

Deficiencies Remain Unresolved

According to the latest mutual evaluation report, adopted by the APG in July 2015, many of the same issues identified as early as 2006 remain unresolved. The system’s effectiveness in implementing global AML/CFT standards is also deemed to be low.

Key Technical Compliance Deficiencies

• Inadequate criminalization of money laundering and terrorist financing • Insufficient measures to implement United Nations resolutions for targeted financial sanctions against terrorists • Poor customer due diligence • Weak supervisory frameworks for financial institutions and designated non-financial businesses and professions

The APG has called on Vanuatu to expedite the resolution of these issues, emphasizing the need for enhanced effectiveness in combating money laundering and terrorist financing.

Background

In June 2014, Vanuatu enacted the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act and regulations, which partially addressed some of the issues related to customer due diligence. Amendments to the Proceeds of Crime Act and the Counter Terrorism and Transnational and Organized Crime Act were brought into force in January 2015, but these did not adequately address the criminalization of money laundering and terrorist financing.

Recent Developments

In July 2015, the APG adopted Vanuatu’s third mutual evaluation report, which reflected low levels of effectiveness across all 11 Immediate Outcomes. Given the gravity of these deficiencies and their persistence over time, the APG has referred Vanuatu to the Financial Action Task Force (FATF) International Cooperation Review Group for further scrutiny.

Next Steps

The amended public statement is available on the APG website.