Financial Crimes in Vanuatu Remain a Concern, Says Asia-Pacific Group
Serious Deficiencies in Anti-Money Laundering and Combating Terrorism Financing System
A recent statement from the Asia-Pacific Group on Money Laundering (APG) has highlighted serious deficiencies in Vanuatu’s anti-money laundering and combating the financing of terrorism (AML/CFT) system, leaving the country’s financial sector vulnerable to illicit activities. Despite efforts to address these issues over the years, the APG remains concerned that many of the same problems persist.
Failure to Implement Global AML/CFT Standards
According to a mutual evaluation report adopted by the APG in July 2015, Vanuatu has failed to adequately implement all of the Financial Action Task Force (FATF) global AML/CFT standards. The country’s system demonstrates low levels of effectiveness in combating money laundering and terrorist financing, with significant gaps remaining in its legal framework.
Technical Compliance Deficiencies
The report identifies several key technical compliance deficiencies, including:
- 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 practices
- Inadequate supervisory frameworks for financial institutions and designated non-financial businesses and professions
Call to Action
The APG has called on Vanuatu to take immediate action to address these deficiencies and enhance the effectiveness of its AML/CFT system. The organization will continue to closely monitor Vanuatu’s progress until all outstanding issues are resolved, at which point it will remove the country from its public statement.
Previous Efforts Fall Short
Vanuatu had previously taken steps to improve its AML/CFT framework, including enacting an Anti-Money Laundering and Counter-Terrorism Financing Act in June 2014. However, these efforts did not fully address all of the identified deficiencies, particularly those related to criminalization and customer due diligence.
Recent Amendments Fail to Address Outstanding Issues
In January 2015, Vanuatu introduced amendments to its Proceeds of Crime Act and Counter Terrorism and Transnational and Organized Crime Act, but these changes also failed to adequately address the outstanding issues. The APG’s recent report highlights the need for more substantial reforms to bring Vanuatu into compliance with international AML/CFT standards.
Urgent Action Needed
The Asia-Pacific Group on Money Laundering has urged Vanuatu to take swift action to rectify these shortcomings and prevent further financial crimes in the region.