Financial Crime World

Risk-Based Approach to Compliance in Vanuatu: A Major Focus for Financial Sector

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Vanuatu has made significant progress in implementing the technical requirements of the Financial Action Task Force (FATF) Recommendations, with a particular emphasis on adopting a risk-based approach to compliance. This was revealed in the country’s Mutual Evaluation 2015 report, which assessed its progress against 40 key recommendations.

Key Findings

  • Vanuatu has made notable improvements in assessing risk and applying a risk-based approach to comply with international standards.
  • The country has strengthened its measures to prevent money laundering and terrorist financing, including the confiscation and provisional freezing of assets.
  • Targeted financial sanctions related to terrorism and terrorist financing have been implemented.

Areas for Improvement

  • Vanuatu’s financial institution secrecy laws could be revised to ensure greater transparency and cooperation with foreign authorities.
  • Customer due diligence requirements need to be strengthened to prevent money laundering and terrorist financing.

Compliance Highlights

  • Regulations on correspondent banking, wire transfers, and reliance on third parties are largely compliant or partially compliant with international standards.

Conclusion

Vanuatu’s efforts to strengthen its anti-money laundering and counter-terrorist financing regime are commendable. However, it is crucial that the country continues to build on these gains by addressing the remaining weaknesses identified in the report. By doing so, Vanuatu can further enhance its financial sector’s integrity and reputation, as well as demonstrate its commitment to international cooperation and best practices.

Recommendations

  • Continue to strengthen customer due diligence requirements to prevent money laundering and terrorist financing.
  • Revise financial institution secrecy laws to ensure greater transparency and cooperation with foreign authorities.
  • Implement additional measures to enhance the country’s anti-money laundering and counter-terrorist financing regime.