Serious deficiencies in Vanuatu’s measures to combat money laundering and terrorist financing

The publication of this Asia/Pacific Group on Money Laundering (APG) statement on the FATF website does not constitute an official endorsement by the FATF. However, this public statement contains relevant information that countries and the private sector, as part of their implementation of the risk-based approach, should be aware of.

 

APG Issues Amended public statement on Vanuatu

The Asia/Pacific Group on Money Laundering (APG) remains concerned about the serious deficiencies in Vanuatu’s anti‐money laundering and combating the financing of terrorism (AML/CFT) system.

Vanuatu’s latest mutual evaluation report, adopted by the APG membership in July 2015, indicates that many of the deficiencies first identified by the APG in 2006 have not yet been adequately addressed.  The report also finds that its system demonstrates low levels of effectiveness in implementing all of the FATF’s global AML/CFT standards.

The most important technical compliance deficiencies include:

  1. Inadequate criminalization of money laundering and terrorist financing;
  2. Inadequate measures to implement United Nations resolutions for targeted financial sanctions against terrorists;
  3. Inadequate customer due diligence (CDD); and
  4. Inadequate supervisory frameworks for financial institutions and designated non‐financial businesses and professions.

The APG calls on Vanuatu to expeditiously address the remaining deficiencies and to enhance the effectiveness of its system to combat money laundering and terrorist financing.

This statement, which was first issued in October 2014, will remain in place until the most important deficiencies are adequately addressed, as determined by the APG membership, informed by its peer monitoring and follow-up process.

Background

In June 2014, Vanuatu enacted and brought into effect the Anti‐Money Laundering and Counter‐Terrorism Financing (AML/CTF) Act and the AML/CTF regulations. The AML/CFT Act and regulations addressed some but not all of the deficiencies relating to CDD.

In January 2015, Vanuatu brought into force amendments to the Proceeds of Crime Act and the Counter Terrorism and Transnational and Organized Crime Act. These amendments did not, however, adequately address the deficiencies relating to the criminalization of money laundering and terrorist financing.

In July 2015, the APG adopted Vanuatu’s third mutual evaluation report [link to published report]. The evaluation was conducted under the FATF’s 2013 assessment methodology which focuses on effectiveness. The report reflects low levels of effectiveness across all of the FATF’s 11 Immediate Outcomes.  In light of these serious deficiencies and the length of time that they have been outstanding, the APG membership recently referred Vanuatu to the FATF’s International Cooperation Review Group for further action and scrutiny.

The amended public statement can be found on the APG website

For more information about the APG: www.apgml.org.