News Item

Public and private sector join to get Vanuatu off grey list

10 Jul 2018

Vanuatu has been removed from the Non Cooperative and High Risk Jurisdiction List, referred to the grey or black list by international media.

The removal of Vanuatu from the grey list is a story of hard work, cooperation and collaboration between public and private sector institutions, says the Chairman of the Board of the Vanuatu Finance Centre Association.

Martin St-Hilaire said it is a story in which Vanuatu’s effort has resulted in the achievement of the highest level of compliance.

“Hopefully this will serve as an example of what can be achieved when political will (from all MPs, led by the Prime Minister Charlot Salwai and the Finance Minister Gaetan Pikioune) working hand in hand with capable and intelligent public sector officials toward a common goal that is for the greater good of the country,” he said.

He said the Mutual Valuation report that listed Vanuatu as Non-Cooperative and High Risk was issued in September 2015, following an on-site visit in January 2015.

“However, before that official visit, the Asia Pacific Group on Money Laundering had already issued a public statement about Vanuatu’s non-compliance with International standards in November 2014,” he said.

“It took Vanuatu three-and-a-half years of hard work to lift its game and to meet the international standards and requirements that are in force today.

“First, as Chairman of the Vanuatu Finance Centre Association, I must congratulate the National AML&CTF Coordinating Committee (‘NCC’) for their work and the success achieved.

“We should highlight the significant contribution of Floyd Mera (Vanuatu Financial Intelligence Unit) and Johnson Naviti (Prime Minister’s Office), to the committee and the committee’s success.

“If Vanuatu authorities were to blame for the poor situation in 2015, they are to be congratulated for working hard to rectify the situation that has resulted in Vanuatu returning to the white list.”

Mr St-Hilaire said Vanuatu’s legislation on these subjects had been outdated.

“Vanuatu MPs and public servants have worked together to strengthen the legislation so as to meet international compliance and best practice,” he said.

He said that implementation and execution have been efficiently managed by the relevant Vanuatu institutions – the Financial Intelligence Unit, the Vanuatu Financial Services Commission, the Reserve Bank of Vanuatu and the Vanuatu Police Force.

But he sounded a warning about the future.

This does not mean Vanuatu will not be under intense scrutiny moving forward; the worldwide trend is transparency, openness, and regular compliance checks,” he said.

“That trend will continue, and dealings with banks and international transactions will not become ‘easier’ from a compliance perspective, ever.

“It may however mean that compliance checks and cross-border transfers will not get significantly more difficult as time goes by.

“The current requirements will stay in force and not become more and more onerous, meaning no more cost increases when it comes to compliance.”

Mr St-Hilaire said it could mean that Vanuatu will attract new foreign direct investment from individuals and corporations that previously viewed Vanuatu as a risky investment environment due to its presence on the grey list.

“This reduced perception of risk could ultimately lead to a reduction in risk premiums, and lower interest rates and transaction fees,” he said.

“Vanuatu must continue to maintain its progress in order to successfully pass the next Mutual Valuation in 2020.”

He said at each valuation, the Financial Action Task Force/African Partnership Forum is setting the bar higher as the world evolves and compliance and regulations are constantly changing.

“I personally hope that the NCC and the institutions involved will keep the momentum going with the support of all MPs, and push our current financial systems further,” he said.

“We should aim for the automation and modernisation of the current data collection systems and associated data analysis.

“Modern technologies and artificial intelligence should be embraced to ensure Vanuatu stays ahead of the compliance requirements and trends in the years to come.

“Funding for this should be provided by OECD countries to help Vanuatu implement this important IT infrastructure, as it is the OECD countries who are the main drivers behind increased compliance and transparency.”

Source: Vanuatu Independent