|
|
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
As a recognised offshore finance jurisdiction this country may fall
under various country offshore jurisdiction blacklists.
____________________________________________________
US State Department Money Laundering Report - 2011:
The Republic of the Marshall Islands (RMI) consists of 29 atolls
and five islands, covering 70 square miles of land, spread across
750,000 square miles of ocean. The country is not economically
developed and has limited resources for development. The RMI
signed a compact of free association with the United States in
1986, and relies on the United States for the majority of its
economic support. There are no known terrorist or narcotics
money laundering activities in the Marshall Islands.
The RMI offshore corporate sector is vulnerable to money
laundering. The Marshall Islands Trust Company and the Marshall
Islands Maritime & Corporate Administrators, Inc., provide for a
robust registration of corporations and ships. The RMI fleet is the
third largest flagged fleet in the world, although almost none of
the vessels come to the Marshall Islands. The port of Majuro is
visited only by tuna fishing boats, with a few cargo ships per
month delivering food and fuel to the nation. Available information
indicates nonresident corporations (NRCs), the equivalent of
international business companies, can be formed online. NRCs
are allowed to offer bearer shares. Corporate officers, directors,
and shareholders may be of any nationality and live anywhere.
NRCs are not required to disclose the names of officers, directors,
and shareholders or beneficial owners, and corporate entities
may be listed as officers and shareholders. The corporate registry
program, however, does not allow the registering of offshore
banks, offshore insurance firms, online gaming institutions, and
other companies which are financial in nature. Although NRCs
must maintain registered offices in the Marshall Islands,
corporations can transfer domicile into and out of the RMI with
relative ease. Marketers of offshore services via the Internet
promote the Marshall Islands as a favored jurisdiction for
establishing NRCs. In addition to NRCs, the Marshall Islands offer
nonresident trusts, partnerships, unincorporated associations,
and domestic and foreign limited liability companies. No current
information is available on the extent of offshore corporate
operations.
There are two banks in the country, the Bank of the Marshall
Islands, and a branch office of the Bank of Guam. There are no
brokerage houses or other types of financial firms in the country.
Land cannot be sold, so there are no realtors, and there are no
casinos or other places typically used to launder money.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
All serious crimes approach or list approach to predicate crimes:
Not defined
Legal persons covered: criminally: YES civilly: YES
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: NO
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Financial institutions, insurers, insurance
brokers and intermediaries, securities dealers, futures brokers,
bullion dealers, businesses issuing, selling or redeeming
travelers' checks, money orders, or similar instruments, payroll
service businesses involved in collecting, holding and delivering
cash, gambling houses, casinos, lotteries, currency dealers and
exchangers, money transmission services, financial futures and
options, exchange and interest rate instruments, transferable
securities, and broker/dealers
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Financial institutions, insurers, insurance
brokers and intermediaries, securities dealers, futures brokers,
bullion dealers, businesses issuing, selling or redeeming
travelers' checks, money orders, or similar instruments, payroll
service businesses involved in collecting, holding and delivering
cash, gambling houses, casinos, lotteries, currency dealers and
exchangers, money transmission services, financial futures and
options, exchange and interest rate instruments, transferable
securities, and broker/dealers
Number of STRs received and time frame: 41 in 2010
Number of CTRs received and time frame: 2,406 in 2010
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: None
Convictions: None
Assets forfeited: criminally: None civilly: None
RECORDS EXCHANGE MECHANISM:
With U.S.: YES
With other governments/jurisdictions: YES
The Marshall Islands is a member of the Asia/Pacific Group on
Money Laundering (APG), a Financial Action Task Force-style
regional body. The report from the APG’s 2004 evaluation is not
available online. The APG conducted a new evaluation in
September 2010. Once finalized, it may be found at: http://www.
apgml.org/documents/default.aspx?DocumentCategoryID=17
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
The Marshall Islands has passed national laws that can be used
to prosecute money laundering crimes; however these have not
yet been used. The laws were passed with the assistance and
drafting of both U.S. and EU donors to meet international
standards. These laws cover both individuals and corporations.
Fines and other punishments (not including incarceration) are
included in the statutes. While money laundering is a crime,
predicate crimes are not defined, whether by list or a generalized
serious crimes approach.
The government does not have an independent national system
and mechanism for freezing terrorist assets in a timely manner.
The government does not distribute any information on
international terrorism to the Bank of Guam or to the Bank of the
Marshall Islands.
The RMI should ensure its offshore sector is adequately
supervised and that information on company ownership and
management is available to law enforcement and supervisory
authorities. The Marshall Islands is in the process of signing tax
and other types of treaties with other nations. It has signed a tax
treaty with Australia.
The RMI became a party to the 1988 UN Drug Convention on
November 5, 2010. It also should become a party to the UN
Convention against Transnational Organized Crime and the UN
Convention against Corruption.
____________________________________________________
______
US State Dept Narcotics Report 2011 (introduction):
No report available
____________________________________________________
______
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2)
The Republic of the Marshall Islands (RMI) is a destination
country for women subjected to sex trafficking. Foreign women are
reportedly forced into prostitution in bars frequented by crew
members of Chinese and other foreign fishing vessels; some
Chinese women have been recruited with the promise of legitimate
work, and after having paid large sums of money in recruitment
fees, were forced into prostitution in the Marshall Islands. Little
data on human trafficking in the Marshall Islands are available, as
the government has not made efforts to proactively identify
victims, especially among vulnerable populations such as foreign
and local women in prostitution and foreign men on fishing
vessels in Marshallese waters. The government has not
conducted any inquiries, investigations, studies, or surveys on
human trafficking.
The Government of the Marshall Islands does not fully comply with
the minimum standards for the elimination of trafficking; however,
it is making significant efforts to do so. The government
acknowledged for the first time that human trafficking occurs in
the Marshall Islands, and began prosecution of a forced
prostitution case during the reporting period. However, there have
been reports of attempted political interference in the
investigation and prosecution, and this remains a serious concern
that has not been appropriately addressed. The government did
not take steps to proactively identify or protect victims of sex
trafficking, investigate or prosecute foreign crewmen for the
commercial sexual exploitation of trafficking victims within its
territory, or educate the public about human trafficking. The
government devotes few resources to addressing human
trafficking.
____________________________________________________
US State Dept Terrorism Report 2009
No report available
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
As a recognised offshore finance jurisdiction this country may fall
under various country offshore jurisdiction blacklists.
____________________________________________________
US State Department Money Laundering Report - 2011:
The Republic of the Marshall Islands (RMI) consists of 29 atolls
and five islands, covering 70 square miles of land, spread across
750,000 square miles of ocean. The country is not economically
developed and has limited resources for development. The RMI
signed a compact of free association with the United States in
1986, and relies on the United States for the majority of its
economic support. There are no known terrorist or narcotics
money laundering activities in the Marshall Islands.
The RMI offshore corporate sector is vulnerable to money
laundering. The Marshall Islands Trust Company and the Marshall
Islands Maritime & Corporate Administrators, Inc., provide for a
robust registration of corporations and ships. The RMI fleet is the
third largest flagged fleet in the world, although almost none of
the vessels come to the Marshall Islands. The port of Majuro is
visited only by tuna fishing boats, with a few cargo ships per
month delivering food and fuel to the nation. Available information
indicates nonresident corporations (NRCs), the equivalent of
international business companies, can be formed online. NRCs
are allowed to offer bearer shares. Corporate officers, directors,
and shareholders may be of any nationality and live anywhere.
NRCs are not required to disclose the names of officers, directors,
and shareholders or beneficial owners, and corporate entities
may be listed as officers and shareholders. The corporate registry
program, however, does not allow the registering of offshore
banks, offshore insurance firms, online gaming institutions, and
other companies which are financial in nature. Although NRCs
must maintain registered offices in the Marshall Islands,
corporations can transfer domicile into and out of the RMI with
relative ease. Marketers of offshore services via the Internet
promote the Marshall Islands as a favored jurisdiction for
establishing NRCs. In addition to NRCs, the Marshall Islands offer
nonresident trusts, partnerships, unincorporated associations,
and domestic and foreign limited liability companies. No current
information is available on the extent of offshore corporate
operations.
There are two banks in the country, the Bank of the Marshall
Islands, and a branch office of the Bank of Guam. There are no
brokerage houses or other types of financial firms in the country.
Land cannot be sold, so there are no realtors, and there are no
casinos or other places typically used to launder money.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY
TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS
TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US
CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE
U.S.: NO
CRIMINALIZATION OF MONEY LAUNDERING:
All serious crimes approach or list approach to predicate crimes:
Not defined
Legal persons covered: criminally: YES civilly: YES
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to
financial institutions: NO
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Financial institutions, insurers, insurance
brokers and intermediaries, securities dealers, futures brokers,
bullion dealers, businesses issuing, selling or redeeming
travelers' checks, money orders, or similar instruments, payroll
service businesses involved in collecting, holding and delivering
cash, gambling houses, casinos, lotteries, currency dealers and
exchangers, money transmission services, financial futures and
options, exchange and interest rate instruments, transferable
securities, and broker/dealers
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Financial institutions, insurers, insurance
brokers and intermediaries, securities dealers, futures brokers,
bullion dealers, businesses issuing, selling or redeeming
travelers' checks, money orders, or similar instruments, payroll
service businesses involved in collecting, holding and delivering
cash, gambling houses, casinos, lotteries, currency dealers and
exchangers, money transmission services, financial futures and
options, exchange and interest rate instruments, transferable
securities, and broker/dealers
Number of STRs received and time frame: 41 in 2010
Number of CTRs received and time frame: 2,406 in 2010
MONEY LAUNDERING CRIMINAL
PROSECUTIONS/CONVICTIONS:
Prosecutions: None
Convictions: None
Assets forfeited: criminally: None civilly: None
RECORDS EXCHANGE MECHANISM:
With U.S.: YES
With other governments/jurisdictions: YES
The Marshall Islands is a member of the Asia/Pacific Group on
Money Laundering (APG), a Financial Action Task Force-style
regional body. The report from the APG’s 2004 evaluation is not
available online. The APG conducted a new evaluation in
September 2010. Once finalized, it may be found at: http://www.
apgml.org/documents/default.aspx?DocumentCategoryID=17
ENFORCEMENT AND IMPLEMENTATION ISSUES AND
COMMENTS:
The Marshall Islands has passed national laws that can be used
to prosecute money laundering crimes; however these have not
yet been used. The laws were passed with the assistance and
drafting of both U.S. and EU donors to meet international
standards. These laws cover both individuals and corporations.
Fines and other punishments (not including incarceration) are
included in the statutes. While money laundering is a crime,
predicate crimes are not defined, whether by list or a generalized
serious crimes approach.
The government does not have an independent national system
and mechanism for freezing terrorist assets in a timely manner.
The government does not distribute any information on
international terrorism to the Bank of Guam or to the Bank of the
Marshall Islands.
The RMI should ensure its offshore sector is adequately
supervised and that information on company ownership and
management is available to law enforcement and supervisory
authorities. The Marshall Islands is in the process of signing tax
and other types of treaties with other nations. It has signed a tax
treaty with Australia.
The RMI became a party to the 1988 UN Drug Convention on
November 5, 2010. It also should become a party to the UN
Convention against Transnational Organized Crime and the UN
Convention against Corruption.
____________________________________________________
______
US State Dept Narcotics Report 2011 (introduction):
No report available
____________________________________________________
______
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2)
The Republic of the Marshall Islands (RMI) is a destination
country for women subjected to sex trafficking. Foreign women are
reportedly forced into prostitution in bars frequented by crew
members of Chinese and other foreign fishing vessels; some
Chinese women have been recruited with the promise of legitimate
work, and after having paid large sums of money in recruitment
fees, were forced into prostitution in the Marshall Islands. Little
data on human trafficking in the Marshall Islands are available, as
the government has not made efforts to proactively identify
victims, especially among vulnerable populations such as foreign
and local women in prostitution and foreign men on fishing
vessels in Marshallese waters. The government has not
conducted any inquiries, investigations, studies, or surveys on
human trafficking.
The Government of the Marshall Islands does not fully comply with
the minimum standards for the elimination of trafficking; however,
it is making significant efforts to do so. The government
acknowledged for the first time that human trafficking occurs in
the Marshall Islands, and began prosecution of a forced
prostitution case during the reporting period. However, there have
been reports of attempted political interference in the
investigation and prosecution, and this remains a serious concern
that has not been appropriately addressed. The government did
not take steps to proactively identify or protect victims of sex
trafficking, investigate or prosecute foreign crewmen for the
commercial sexual exploitation of trafficking victims within its
territory, or educate the public about human trafficking. The
government devotes few resources to addressing human
trafficking.
____________________________________________________
US State Dept Terrorism Report 2009
No report available
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
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| MARSHALL ISLANDS |
| KnowYourCountry |
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*Please note that FATF deems that a country has significant aml deficiencies if
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
Key Findings
The RMI has a very limited financial sector with total banking sector
assets estimated at US$133 million in May 2010. There are two
AML/CFT supervised commercial banks that dominate the financial
sector in the RMI. Financial institutions and cash dealers are
regulated for AML/CFT except for a few informal providers.
Money laundering (ML) and financing of terrorism (FT)
vulnerabilities in the RMI derive mainly from its offshore company
registration sector. The corporate anonymity afforded by companies
registered in the RMI represents significant ML/FT vulnerabilities.
There is no mandatory requirement for legal persons to provide
information either on the legal or beneficial ownership of
shareholders, and there is no supervision of company formation
service providers based offshore.
The Banking Commission is the lead agency for AML/CFT in the RMI.
The Banking Act provides a range of statutory powers to the
Banking Commissioner, including those of a financial
intelligence unit (FIU), as a prudential regulator of licensed banks, and
as an AML/CFT supervisor of financial institutions and cash dealers.
Overall, the RMI has implemented reasonably sound measures
concerning ML/FT criminalization, confiscation and international co-
operation, and the preventive measures for the financial
sectors, but technical and implementation deficiencies
remain. There are deficiencies in the following: elements of the ML
and FT offences; mechanisms for freezing FT funds without delay and
domestic designation; controls on movement of cash across borders;
supervision of non-bank financial institutions and cash dealers; and
implementation of the FATF standards amongst the designated non-
financial businesses and professions (DNFBPs), in particular
company service providers.
There has been no prosecution or conviction for ML and FT.
Opportunities for possible ML prosecution were not pursued either
due to lack of resources or expertise, and the view (by some
authorities) that ML is more of an international rather than a
domestic concern. The authorities consider terrorism and FT as very
low risk, and there has never been a case of either event.
The main DNFBP sector is the offshore company formation services
sector which is not yet included in the AML/CFT regime. Accountants,
lawyers and other company service providers based in foreign
jurisdictions submit applications for company formations to the
RMI’s offshore company registry.
Key recommendations made to the RMI include:
• address remaining legal deficiencies in the ML and FT offences;
• use available powers to investigate and prosecute the ML
offence;
• provide mechanisms/procedures for freezing terrorist property
without delay and for domestic designation;
• undertake further enhancements to DFIU functions;
• rectify deficiencies in the Currency Declaration Act 2009;
• take further steps to ensure all entities are aware of their
obligations under the revised AML/CFT Regulations
• undertake supervision (on and off-site) to confirm implementation;
• rectify technical deficiencies in the revised AML/CFT Regulations;
• introduce AML/CFT requirements for DNFBPs with a focus on
enhancing supervision of company formation service providers
based offshore;
• amend relevant statutes to include mandatory information on
beneficial ownership and to prevent the misuse of bearer shares;
and
• address remaining deficiencies in the MLA framework.
Click here to view full Mutual Evaluation Report (pdf file)
The RMI has a very limited financial sector with total banking sector
assets estimated at US$133 million in May 2010. There are two
AML/CFT supervised commercial banks that dominate the financial
sector in the RMI. Financial institutions and cash dealers are
regulated for AML/CFT except for a few informal providers.
Money laundering (ML) and financing of terrorism (FT)
vulnerabilities in the RMI derive mainly from its offshore company
registration sector. The corporate anonymity afforded by companies
registered in the RMI represents significant ML/FT vulnerabilities.
There is no mandatory requirement for legal persons to provide
information either on the legal or beneficial ownership of
shareholders, and there is no supervision of company formation
service providers based offshore.
The Banking Commission is the lead agency for AML/CFT in the RMI.
The Banking Act provides a range of statutory powers to the
Banking Commissioner, including those of a financial
intelligence unit (FIU), as a prudential regulator of licensed banks, and
as an AML/CFT supervisor of financial institutions and cash dealers.
Overall, the RMI has implemented reasonably sound measures
concerning ML/FT criminalization, confiscation and international co-
operation, and the preventive measures for the financial
sectors, but technical and implementation deficiencies
remain. There are deficiencies in the following: elements of the ML
and FT offences; mechanisms for freezing FT funds without delay and
domestic designation; controls on movement of cash across borders;
supervision of non-bank financial institutions and cash dealers; and
implementation of the FATF standards amongst the designated non-
financial businesses and professions (DNFBPs), in particular
company service providers.
There has been no prosecution or conviction for ML and FT.
Opportunities for possible ML prosecution were not pursued either
due to lack of resources or expertise, and the view (by some
authorities) that ML is more of an international rather than a
domestic concern. The authorities consider terrorism and FT as very
low risk, and there has never been a case of either event.
The main DNFBP sector is the offshore company formation services
sector which is not yet included in the AML/CFT regime. Accountants,
lawyers and other company service providers based in foreign
jurisdictions submit applications for company formations to the
RMI’s offshore company registry.
Key recommendations made to the RMI include:
• address remaining legal deficiencies in the ML and FT offences;
• use available powers to investigate and prosecute the ML
offence;
• provide mechanisms/procedures for freezing terrorist property
without delay and for domestic designation;
• undertake further enhancements to DFIU functions;
• rectify deficiencies in the Currency Declaration Act 2009;
• take further steps to ensure all entities are aware of their
obligations under the revised AML/CFT Regulations
• undertake supervision (on and off-site) to confirm implementation;
• rectify technical deficiencies in the revised AML/CFT Regulations;
• introduce AML/CFT requirements for DNFBPs with a focus on
enhancing supervision of company formation service providers
based offshore;
• amend relevant statutes to include mandatory information on
beneficial ownership and to prevent the misuse of bearer shares;
and
• address remaining deficiencies in the MLA framework.
Click here to view full Mutual Evaluation Report (pdf file)
| Further Tables |
|
| Last Updated: 16 April 2012 |