Adopting a risk-based approach
The risk-based approach is central to the effective implementation of the Financial Action Task Force (FATF)’s recommendations on anti-money laundering and combating the financing of terrorism (AML/CFT). It helps you identify, assess, and understand the money laundering and terrorist financing risks to which you are exposed as a financial dealer, and implement the most appropriate mitigation measures.
Every year by March 31, all Vanuatu-licensed financial dealers must file two important documents with the Vanuatu Financial Intelligence Unit (VFIU) in order to comply with AML/CFT rules.
You should send these documents directly to your Registered Agent so they can file them with the VFIU on your behalf and keep copies as required by law.
1. An updated AML/CFT compliance report
Using the file below, you may fill in Division 2 (“Business Detail”) then let your Registered Agent handle the next steps.
2. An updated version of the company manual on AML/CFT
You are required to keep your AML/CFT manual up to date, by making sure it incorporates the latest regulatory changes. You’ll find below the full list of VFIU announcements over the years, starting with the most recent.
Once your manual is updated, you may date it with the current year on the front page.
Creating your first company manual
As a Vanuatu financial dealer, you are required to circulate a manual among your employees to make sure they are aware of the laws of our nation against money laundering and the financing of terrorism.
If you haven’t created a manual yet, you can start by reading the AML&CTF Act (full text and amendments here) then check the VFIU guidelines or contact your Registered Agent for details.
Please note that each financial dealer must write its AML/CFT manual in its own words. The manual must be dated with the current year on the front page, signed by the Director(s), and include the following provisions:
|AML & CFT OBLIGATIONS||RECOMMENDATIONS|
|1. Defining money laundering and the financing of terrorism (ML-TF)||Provide simple definitions for ease of understanding by the employees.|
|2. Establishing Relationships: Know your customer (KYC), Customer due diligence (CDD)||Clearly define your policies, processes and procedures in adherence to Part 4 of the AML&CTF Act.|
|3. Risk assessment policy and procedure||Clearly define your policies, processes, and procedures in adherence to section 35 of the AML&CTF Act.|
|4. Ongoing monitoring of business relationships||Clearly define your policies, processes, and procedures in adherence to section 17 of the AML&CTF Act.|
|5. Transaction and activity reporting||Clearly define your policies, processes and procedures in adherence to Part 6 of the AML&CTF Act.|
|6. Record keeping||Clearly define your policies, processes and procedures in adherence to Part 5 of the AML&CTF Act.|
|7. Confidentially, security and protection||Clearly define your policies, processes and procedures in adherence to sections 40AA, 40A, and 40B of the AML&CTF Act.|
|8. Designated AML & CTF compliance officers & roles||Name the appointed officers and state the exact roles of the designated officers appointed by the Company.|
|9. AML & CTF training and employment policy||Clearly define a procedure.|
|10. Audit Program||Indicate who is involved in the audit, how often, and how it is conducted; describe the procedures for the approval of the audit and the selection of the auditor; and indicate how and by whom the recommendations of the auditor can be implemented.|
|11. United Nations Financial Sanctions Act (UNFS Act)||Clearly indicate the procedures to ensure that your company does not contravene any prohibition under Part 3 of the UNFS Act No.6 of 2017. The VFIU and VFSC need to understand which procedures are implemented in order to make sure that your company correctly screens its list of customers against the United Nations Financial Sanctions list. The use of software such as Refinitiv (Thomson Reuters) is accepted for compliance screening.|