FATF AML Deficiency List
US Dept of State Money Laundering assessment
Non - Compliance with FATF 40 + 9 Recommendations
Corruption Index (Transparency International & W.G.I.)
Brunei is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies
Latest FATF Statement - 21 June 2013
The FATF welcomes Brunei Darussalam’s significant progress in improving its AML/CFT regime and notes that Brunei Darussalam has established the legal and regulatory framework to meet its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified in June 2011. Brunei Darussalam is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Brunei Darussalam will work with the APG as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report.
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Brunei was undertaken by the Financial Action Task Force (FATF) in 2005. According to that Evaluation, Brunei was deemed Compliant for 3 and Largely Compliant for 16 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for 1 of the 6 Core Recommendations.
APG Yearly Typologies Report - 2015
Emerging Trends; Declining Trends; Continuing Trends (INCSR)
Based on case studies provided by various law enforcement agencies on investigations conducted into predicate offences, the FIU is of the view that there is an emerging trend of predicate offences associated with unlicensed financial activity within the formal sector.
In addition to the above, the FIU is of the view that there is a continuing trend being reported in Suspicious Transactions Reports of mingling of personal and company funds in accounts held by persons.
US Department of State Money Laundering assessment (INCSR)
Brunei was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -
Brunei is not a regional financial center. Brunei does have a small offshore financial center and its proximity to high crime regions, along with its large foreign worker population and limited AML/CFT institutional capacity, make it vulnerable to cross-border criminal activity. Domestically, Brunei is a low threat country for money laundering and terrorism financing. Proceeds of crime generally originate from fraud, gambling, the drug trade, and fuel smuggling. There are also concerns about an increase in cybercrime, and in particular, financial fraud, such as pyramid schemes and e-mail scams. Gambling is illegal, and Brunei has a mandatory death penalty for many narcotics offenses, although it has not been used for many years.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 60
World Governance Indicator – Control of Corruption 78
Brunei is an energy-rich sultanate on the northern coast of Borneo in Southeast Asia. Brunei boasts a well-educated, largely English-speaking population; excellent infrastructure; and a stable government intent on attracting foreign investment. Crude oil and natural gas production account for approximately 65% of GDP and 95% of exports, with Japan as the primary export market.
Per capita GDP is among the highest in the world, and substantial income from overseas investment supplements income from domestic hydrocarbon production. Bruneian citizens do not pay personal income taxes, and the government provides free medical services and free education through the university level.
The Bruneian Government wants to diversify its economy away from hydrocarbon exports to other industries such as information and communications technology and halal manufacturing. Brunei’s trade in 2016 is set to increase following its regional economic integration in the ASEAN Economic Community, and the expected ratification of the Trans-Pacific Partnership trade agreement.
Agriculture - products:
rice, vegetables, fruits; chickens, water buffalo, cattle, goats, eggs
petroleum, petroleum refining, liquefied natural gas, construction, agriculture, transportation
Exports - commodities:
mineral fuels, organic chemicals
Exports - partners:
Japan 35.9%, South Korea 14.8%, Thailand 10.8%, India 9.8%, NZ 5.6%, Australia 5% (2015)
Imports - commodities:
machinery and mechanical appliance parts, mineral fuels, motor vehicles, electric machinery
Imports - partners:
Singapore 27.9%, China 25.3%, Malaysia 12.4%, UK 10.6%, South Korea 4.9% (2015)
Brunei is an energy-rich Sultanate on the northern coast of Borneo in Southeast Asia. Brunei boasts a well-educated, largely English-speaking population, excellent infrastructure, and a government intent on attracting foreign investment and projects. In parallel with Brunei’s efforts to attract foreign investment, the country has improved its protections for Intellectual Property Rights (IPR).
Despite repeated calls for diversification, Brunei’s economy remains dependent on the income derived from sales of oil and gas. Substantial revenue from overseas investment supplements income from domestic hydrocarbon production. These two revenue streams provide a comfortable quality of life for Brunei’s population. Citizens are not required to pay taxes, have access to free education through the university level, free medical care, and frequently, subsidized housing.
Brunei has a stable political climate and is generally sheltered from natural disasters. Brunei’s central location in Southeast Asia, with good telecommunications, numerous airline connections, business tax credits in specified sectors, and no income, sales, or export taxes offers a welcoming climate for would-be investors. Brunei is a founding member of the Trans-Pacific Partnership (TPP) trade agreement. Sectors offering U.S. business opportunities in Brunei include aerospace and defense, agribusiness, construction, petrochemicals, energy and mining, environmental technologies, food processing and packaging, franchising, health technologies, information and communication, Islamic finance, and services. In 2014 Brunei released an Energy White Paper outlining its vision of leveraging its oil wealth to diversify its economy, create local employment, increase foreign direct investment (FDI), and sharply increase the use of renewable energy by 2035.
In 2014 Brunei began supplementing the existing common law-based penal system with a penal code based on Islamic law, which will carry Sharia punishments. The Islamic Penal Code is applicable across the board. The first phase became effective in May 2014. It expands restrictions regarding the drinking of alcohol, eating in public during the fasting hours in the month of Ramadan, and indecent behavior. Two subsequent phases, the timing of which is not yet clear, are expected to introduce severe punishments such as stoning to death for certain sex-related offenses and the amputating of limbs. Brunei officials say the most severe punishments will rarely if ever be implemented given the very high standard of proof required under the Sharia Penal Code. While the law does not specifically address business-related matters, potential investors should be aware that there is controversy surrounding the Sharia Penal Code issue.
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