Financial Crime World

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Vanuatu Under Fire for Failing to Address Anti-Money Laundering Deficiencies

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According to a recent public statement issued by the Asia-Pacific Group on Money Laundering (APG), Vanuatu remains plagued by serious deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) system.

APG’s Concerns

The APG’s concerns stem from Vanuatu’s inability to adequately address deficiencies first identified in 2006. The country’s latest report, adopted by the APG membership in July 2015, reveals that many of these shortcomings remain unresolved.

Here are some key technical compliance deficiencies highlighted by the APG:

  • 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
  • Ineffective supervisory frameworks for financial institutions and designated non-financial businesses and professions

Urgent Action Required

The APG is urging Vanuatu to take immediate action to address these remaining deficiencies and enhance the effectiveness of its system in combating money laundering and terrorist financing. The statement will remain in place until the most critical issues are resolved, as determined by the APG membership through its peer monitoring and follow-up process.

Ongoing Efforts

Vanuatu has been working on implementing AML/CFT measures since June 2014, when it enacted and brought into effect the Anti-Money Laundering and Counter-Terrorism Financing Act and regulations. However, these efforts have fallen short of addressing all deficiencies, particularly those related to customer due diligence.

In January 2015, Vanuatu introduced amendments to the Proceeds of Crime Act and the Counter Terrorism and Transnational and Organized Crime Act, but these changes did not adequately address the criminalization of money laundering and terrorist financing. As a result, the APG has referred Vanuatu to the Financial Action Task Force’s (FATF) International Cooperation Review Group for further scrutiny.

Accessing the Public Statement

The full public statement can be accessed on the APG website: www.apgml.org.