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APG Public Statement on Vanuatu - Update 24 July 2018
Removal from FATF and APG listings
In May 2018 the FATF International Cooperation Review Group (ICRG) conducted an on-site visit to Vanuatu which confirmed that the reforms achieved under Vanuatu’s ICRG action plan are being implemented.
In June 2018 the FATF recognised and confirmed Vanuatu’s progress and took a decision to remove Vanuatu from its ICRG process. The FATF issued a detailed public statement on 29 June 2018 announcing Vanuatu’s removal from FATF monitoring.
In July 2018 APG members decided to remove Vanuatu from APG membership action.
The APG welcomes the progress made by Vanuatu to address the strategic deficiencies identified in its 2015 APG mutual evaluation report and highlights the FATF’s formal recognition of Vanuatu’s progress through its decision to de-list it from ICRG review.
In July 2015, the APG adopted Vanuatu’s third mutual evaluation report. The report reflected low levels of effectiveness across all of the FATF’s 11 Immediate Outcomes. In light of these serious deficiencies, 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, Vanuatu made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies, adopting an action plan which identified eight strategic deficiencies.
Since that time, Vanuatu has made significant progress to rectify its deficiencies. Vanuatu has now substantially addressed its action plan at a technical level, including by:
(1) adequately criminalising money laundering and terrorist financing;
(2) establishing adequate procedures for the confiscation of assets related to money laundering;
(3) establishing an adequate legal framework for identifying, tracing and freezing terrorist assets and other UN sanctions;
(4) ensuring a fully operational and effectively functioning financial intelligence unit;
(5) strengthening preventive measures, including for wire transfers;
(6) establishing transparency for the financial sector, and for legal persons and arrangements;
(7) establishing an adequate AML/CFT supervisory and oversight programme for the whole 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.
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 made significant further progress to address its strategic deficiencies, both through legislative and regulatory changes and through improved implementation of existing and new AML/CFT measures. Vanuatu passed 12 priority bills in June 2017 which establish the key building blocks for reforms, and a further 17 Bills in December 2017.
Vanuatu has, inter alia, removed the barrier to information sharing between the FIU, regulators and law enforcement; established a comprehensive legal framework and guidance to give effect to UN targeted financial sanctions to freeze assets associated with terrorism or proliferation of WMD; amended the Proceeds of Crime Act, Mutual Assistance in Criminal Matters Act and the International Companies Act; completed an assessment of offshore financial sector risks and terrorist financing risks; introduced a statutory scheme to include foreign tax offences as money laundering predicate offences; and removed secrecy provisions and impediments to international cooperation. Extension of AML powers and international cooperation provisions to cover foreign tax offences removed previous significant impediments to lifting the veil of secrecy on Vanuatu legal persons and financial services. AML/CFT resources and capacity of the Vanuatu FIU and the Vanuatu Police Force have also been enhanced.