Financial Crime World

Vanuatu’s Financial Intelligence Unit: Overview of Reporting Entities’ Obligations

The Vanuatu Financial Intelligence Unit (VFIU), under the Government of Vanuatu, is a crucial component of the country’s financial compliance regulatory framework. The Anti-Money Laundering and Counter-Terrorist Financing (AML&CTF) Act serves as the legislative backbone of the reporting entities’ obligations, which are essential for preventing money laundering and combatting terrorist financing. In this article, we provide an overview of the key obligations for reporting entities as outlined in the AML&CTF Act and Regulation.

Institutional Obligations

Reporting entities, as defined in the AML&CTF Act, are subject to specific obligations outlined below:

  1. Registration with the VFIU
  2. Appointment of an AML&CTF Compliance Officer
  3. Development and maintenance of Procedure Manuals
  4. Implementation and maintenance of risk-based systems and controls
  5. Carrying out customer due diligence
  6. Maintaining thorough records
  7. Reporting transactions to the VFIU
  8. Staff training on AML&CTF issues
  9. Establishing adequate measures for correspondent banking
  10. Conducting regular audits on AML&CTF systems and controls

Registration and Appointment of AML&CTF Compliance Officer

Reporting entities must:

  • Register with the VFIU.
  • Appoint an individual as the AML&CTF Compliance Officer, responsible for overseeing the entity’s AML&CTF compliance.

Procedure Manuals and Risk-Based Systems

Reporting entities must:

  • Develop and maintain an AML&CTF Procedure Manual outlining their internal policies and procedures.
  • Implement and maintain risk-based systems and controls tailored to their business operations.

Customer Due Diligence, Record Keeping, and Reporting

Reporting entities must:

  • Perform customer due diligence.
  • Maintain thorough records of all financial transactions, including Customer Due Diligence (CDD) records and reports submitted to the VFIU.
  • Regularly report transactions to the VFIU, in accordance with the risk level assigned to their customers and transactions.

Staff Training and Awareness

Reporting entities must ensure:

  • Officers and employees are familiar with the AML&CTF laws, policies, and procedures adopted by the entity.
  • Provide AML&CTF training to personnel on recognizing, reporting, and dealing with suspected money laundering and terrorist financing activities.

Record Keeping

Reporting entities must keep records of all financial transactions, including CDD records and financial reports submitted to the VFIU. This information must be readily accessible for inspection, allowing the transactions to be reconstructed promptly if necessary.

AML&CTF Compliance Officer

Each reporting entity must designate an individual as its AML&CTF Compliance Officer, who is responsible for overseeing the entity’s compliance with the provisions of the AML&CTF Act and Regulation (Section 34 of the AML&CTF Act). Refer to Section 19 of the Financial Transactions Reporting Act for a comprehensive understanding of the legislation outlining their obligations.

By following these obligations, reporting entities play a vital role in safeguarding Vanuatu’s financial system and contributing to international efforts to prevent money laundering and combat terrorist financing. Reporting entities are encouraged to consult the AML&CTF Act and Regulation for a comprehensive understanding of their obligations.