Nauru Acts On Money Laundering Following FATF Threat

by Mary Swire, Tax-News.com, Hong Kong

11 December 2001

Mathew Batsiua, the Chief Secretary of the tiny island republic of Nauru, which is due to become the first offshore haven to face sanctions according to an FATF announcement last week, has revealed that the government has enacted emergency legislation in order to avoid the wrath of the 29 OECD member countries.

Censured alongside Russia and the Philippines for being 'uncooperative' in the international fight against money laundering earlier this year, it was Nauru alone which became the target of the Financial Action Task Force's attention last Wednesday.

The multilateral organisation announced that in its opinion, the jurisdiction had not done enough to combat money laundering and tax evasion through its financial sector. Proposed sanctions included preventing the republic's banks and financial institutions from gaining new banking licenses in OECD member countries, and issuing warnings about the dangers of doing business there.

However, keen to avoid this scenario, Nauru has enacted amendments to its anti-money laundering legislation in order to define offshore banking more clearly, and thus hopefully meet FATF requirements.

Mr Batsiua announced at the weekend that it was decided in an emergency session that anti-money laundering officials would 'investigate any credible evidence that Nauru had been used by the Russian mafia, or any other crime organizations, to launder money,' and that the government would no longer allow the country's banks to be 'used as pawns in any money laundering schemes.'

Recommended