Wallis and Futuna Braces for Increased Scrutiny

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Wallis and Futuna Braces for Increased Scrutiny on Financial Crimes

The island nations of Wallis and Futuna are set to face heightened scrutiny from international regulators as concerns over financial crimes and money laundering continue to mount. As part of efforts to combat the growing threat, auditors and compliance experts are calling for increased vigilance in the region.

Key Areas of Focus

Regulatory bodies have identified several key areas of focus for Wallis and Futuna, including:

Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT): The islands’ financial institutions will be under pressure to implement robust risk mitigants to prevent illicit exploitation of access to the global financial system.
Cybersecurity Risk Management: With the rise of digital assets and decentralized finance (DeFi) platforms, regulators are warning that the islands’ financial institutions must be equipped to detect and prevent cybercrime threats.

Crypto and Digital Assets Take Center Stage

The growing popularity of cryptoassets and DeFi platforms has led to increased attention from regulators in Wallis and Futuna. The islands’ financial institutions will need to ensure they have adequate controls in place to assess customer due diligence (CDD) and suspicious activity reporting (SAR) related to these emerging technologies.

Implementing Robust Measures for Identifying and Mitigating Risks

Auditors are advising financial institutions in Wallis and Futuna to implement robust measures for identifying and mitigating risks associated with cryptoassets, including:

Conducting regular risk assessments
Implementing effective controls to prevent the misuse of digital assets for illicit activities

Sanctions and Price Cap Compliance: A Growing Concern

The ongoing geopolitical tensions have led to increased scrutiny on sanctions compliance in Wallis and Futuna. The islands’ financial institutions will need to ensure they are compliant with evolving regulations related to virtual currency mining, dark net markets, and bans on services to sanctioned entities and countries.

Implementing Effective Due Diligence Procedures

Auditors are emphasizing the importance of robust controls and processes for managing sanctions-related risks in Wallis and Futuna, including:

Implementing effective due diligence procedures
Maintaining up-to-date knowledge of changing regulations and sanctions lists

A Call for Increased Vigilance

As Wallis and Futuna prepares to face increased scrutiny on financial crimes, auditors are urging the islands’ financial institutions to remain vigilant and proactive in their risk management efforts. By implementing robust controls and processes, these institutions can help ensure a safer and more secure financial environment for all stakeholders.

Expert Insights

“The growing threat of financial crimes requires Wallis and Futuna’s financial institutions to be proactive in their risk management efforts,” said Amy S. Matsuo, Principal at KPMG LLP.

“Regulators will continue to scrutinize Wallis and Futuna’s financial institutions to ensure they are meeting evolving regulatory requirements,” added John Caruso, Principal at KPMG US. “Financial institutions in the region must remain vigilant and proactive in their risk management efforts to avoid reputational damage and regulatory penalties.”