Financial Crime World

Vanuatu Under Fire for Failure to Combat Financial Crime and Terrorism Funding

The Asia-Pacific Group on Money Laundering (APG) has issued a statement highlighting serious concerns regarding Vanuatu’s lack of progress in combating financial crime and terrorism funding. Despite efforts to address previous deficiencies, many issues remain unresolved, leaving the country vulnerable to money laundering and terrorist financing.

Key Concerns

  • Low levels of effectiveness in implementing global standards set by the Financial Action Task Force (FATF)
  • Inadequate criminalization of money laundering and terrorist financing
  • Insufficient measures to implement UN resolutions for targeted financial sanctions against terrorists
  • Poor customer due diligence
  • Ineffective supervisory frameworks for financial institutions

Urgent Call for Action

The APG is urging Vanuatu to expedite the resolution of these outstanding issues and strengthen its system to combat financial crime and terrorism funding. The organization has stated that the public statement will remain in place until the most critical deficiencies are adequately addressed.

Background Research

  • In June 2014, Vanuatu enacted the Anti-Money Laundering and Counter-Terrorism Financing Act and regulations aimed at addressing some AML/CFT shortcomings.
  • Amendments were made to the Proceeds of Crime Act and the Counter Terrorism and Transnational and Organized Crime Act in January 2015; however, these did not adequately address deficiencies related to criminalization.

Further Scrutiny

The APG has referred Vanuatu to the FATF’s International Cooperation Review Group for further scrutiny, citing the persistence of serious deficiencies over an extended period. The organization is calling on Vanuatu to take immediate action to strengthen its AML/CFT regime and prevent financial crime and terrorism funding.

Conclusion

Vanuatu’s failure to address these critical issues has put the country under the spotlight, highlighting the urgent need for reform. It is essential that the government takes concrete steps to address the outstanding deficiencies and ensure the effectiveness of its anti-money laundering and combating the financing of terrorism system.