MAJURO — Marshall Islands officials said Friday that they were not surprised that the country remained on an international money laundering blacklist issued late last month.
Marshall Islands banking commissioner Alfred Alfred Jr. said what surprised local officials were the reasons cited by Financial Action Task Force for the Marshall Islands remaining on the list. “FATF didn’t acknowledge the work that’s been put into anti-money laundering,” Alfred said. “We’ve achieved a lot.”
Alfred indicated that the Marshall Islands is anticipating a visit by a FATF inspection team in late August. This is an essential step in the Marshall Islands attempt to get off the money laundering blacklist, Alfred said.
The visit by FATF was scheduled recently for August as a prelude to a full FATF meeting that is set to happen in October—which could result in FATF issuing a decision to “delist” the Marshall Islands based on actions taken locally and the report of the visiting FATF team, Alfred said.
“This visit is the ultimate opportunity for them to see what we have and for us to convince them that what we have put in place is up to international standards,” Alfred said.
He said the planned visit to the Marshall Islands is the first time FATF will make a visit to any country on the blacklist, a development that Alfred attributes heavily to support for the visit by the U.S. State Department.
Alfred believes that the Marshall Islands—by adopting new banking legislation and regulations for implementing anti-money laundering measures, and establishing a financial intelligence unit—has “closed the loopholes” that were earlier identified by FATF as reason for blacklisting the Marshall Islands.
FATF issued its new list on June 21. Four countries were taken off the FATF blacklist, including Hungary, Israel, Lebanon, St. Kitts and Nevis. Other Pacific islands remaining on the list are the Cook Islands, Nauru and Niue.
FATF has raised concern about the Marshall Islands procedures for “licensing” non-banks financial institutions. Alfred said that FATF contends that the Marshall Islands is not using “fit and proper tests” to assess financial institutions applying for licenses to operate. But, he said, the Trust Company of the Marshall Islands is not engaged in financial services, and there are no off-shore banks licensed locally. The Trust Company operates a ship registry, the ninth largest in the world by gross tonage, and a corporate registry.
However, a FATF official has told Marshall Islands officials that even firms such as the Trust Company that provide “corporate services” must be subjected to these same standards of review, Alfred said.
Alfred said that there is no currently recognized or internationally agreed-to standard for evaluation of companies providing corporate services, and therefore this shouldn’t be used to keep the Marshall Islands on the blacklist.
Alfred said that the Marshall Islands does have “fit and proper tests” to use in screening applications for banks and other financial institutions as part of its banking legislation.
