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Vanuatu is a founding member of the APG (1997).
Vanuatu is strengthening its anti-money laundering and combating the financing of terrorism system. Vanuatu has recently enacted comprehensive anti-money laundering and combating the financing of terrorism legislation. Vanuatu has established a Financial Intelligence Unit.
Offshore Banking Regulator: Reserve Bank of Vanuatu
The latest Mutual Evaluation Report of Vanuatu - adopted by the APG in July 2015 - is available in Documents in Members and Observers, and Mutual Evaluation Reports - 3rd Round.
APG Public Statement on Vanuatu - Update March 2018
The APG welcomes the substantial progress made by Vanuatu to address the strategic deficiencies identified in Vanuatu’s latest mutual evaluation report, adopted by the APG membership in July 2015.
That report found significant gaps with Vanuatu’s legal and institutional framework and that its system demonstrated low levels of effectiveness in implementing all of the Financial Action Task Force’s global anti‐money laundering and combating the financing of terrorism (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, adopting an action plan which identified eight strategic deficiencies.
Since that time, Vanuatu has made significant progress to rectify its deficiencies. In its February 2018 public statement (http://www.fatf-gafi.org/publications/high-riskandnon-cooperativejurisdictions/documents/fatf-compliance-february-2018.html#vanuatu), the FATF noted that 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.
The FATF will in the next few months conduct an on-site visit to Vanuatu to confirm that the implementation of these reforms has begun and is being sustained. Such a visit is normally the final step before a jurisdiction is removed from the FATF’s International Cooperation Review Group (ICRG) review process. The FATF will consider the results of the visit at its June 2018 plenary meeting.
The APG congratulates Vanuatu on its significant progress since 2016 and encourages it to continue implementing its action plan and to take other measures to enhance the effectiveness of its AML/CFT system.
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. APG members will consider this issue further at the APG’s annual meeting in July 2018, informed by the APG’s peer monitoring, including FATF ICRG review, and the APG’s mutual evaluation 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 reflected 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 had 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 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. The resources and capacity of the Vanuatu FIU and the Vanuatu Police Force have also been enhanced.