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APG Public Statement on Vanuatu - Update September 2016
The APG remains concerned about the strategic 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.
In February 2016, Vanuatu made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies.
Vanuatu should continue to work on implementing its action plan to address these deficiencies, including by:
(1) adequately criminalising money laundering and terrorist financing;
(2) establishing and implementing adequate procedures for the confiscation of assets related to money laundering;
(3) establishing and implementing an adequate legal framework for identifying, tracing and freezing terrorist assets and other UNSCR sanctions;
(4) ensuring a fully operational and effectively functioning financial intelligence unit (FIU);
(5) strengthening preventive measures, including for wire transfers;
(6) establishing transparency for the financial sector, and for legal persons and arrangements;
(7) implementing an adequate AML/CFT supervisory and oversight programme for all the financial sector and trust and company service providers; and
(8) establishing appropriate channels for international co-operation and domestic coordination policies and actions on identified risks and ensuring effective implementation.
The APG encourages Vanuatu to implement its action plan and take other measures 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, including FATF International Cooperation Review Group (ICRG) review, and the APG follow-up process.
In July 2015, the APG adopted Vanuatu’s third mutual evaluation 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, in August 2015 the APG membership referred Vanuatu to the FATF’s ICRG for further action and scrutiny.
The ICRG accepted the APG’s referral in October 2015 and in February 2016 adopted an action plan for Vanuatu to address its strategic deficiencies.
In October 2015, the AML/CTF Amendment Act and the AML/CTF Amendment Regulation entered into force to address some of the deficiencies with obligations relating to customer due diligence, internal controls and foreign branches. Since February 2016, Vanuatu has removed the barrier to information sharing between the FIU and law enforcement, provided guidance in relation to asset freezing and reporting of frozen assets and amended the Proceeds of Crime Act, Mutual Assistance in Criminal Matters Act and the International Companies Act.