The anti‐money laundering regime in the Republic of Nauru

Abstract

Describes how Nauru was put on the Financial Action Task Force (FATF) list of countries which are centres for money laundering; in response to this, the Nauruan Parliament passed the Anti‐Money Laundering Act of 2001. Mentions its provisions: it criminalised money laundering, established the Financial Institutions Supervisory Authority, and introduced know‐your‐customer obligations. Points out, however, that this failed to meet all the FATF 40 Recommendations, mainly because it did not mandate oversight of over 400 offshore centres or “shell banks”, so that FATF members applied sanctions to Nauru. Outlines the Republic’s existing financial services regime; the Evidence (Confidential Information) Act 1976 established Nauru as a safe haven by defining individual rights against disclosure, and its banking and company law were similarly deficient from the FATF’s point of view. Concludes that Nauru has made progress towards effective anti‐money laundering regulation, but serious issues remain unresolved in the ongoing political and economic turmoil.

Citation

Roule, T.J. and Salak, M. (2003), "The anti‐money laundering regime in the Republic of Nauru", Journal of Money Laundering Control, Vol. 7 No. 1, pp. 75-83. https://doi.org/10.1108/13685200410809797