FATF AML Deficiency List
Non - Compliance with FATF MER Recommendations
Corruption Index (Transparency International & W.G.I.)
World Governance Indicators (Average Score)
Weakness in Government Legislation to combat Money Laundering
Tonga is not on the FATF List of Countries that have been identified as having strategic AML deficiencies
Compliance with FATF Recommendations
The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Tonga was undertaken by the Financial Action Task Force (FATF) in 2010. According to that Evaluation, Tonga was deemed Compliant for 0 and Largely Compliant for 4 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.
US Department of State Money Laundering assessment (INCSR)
Tonga 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: -
Tonga is an archipelago located in the South Pacific. With only five commercial banks, Tonga is neither a financial center nor an offshore jurisdiction. Remittances from Tongans living and working abroad have remained high, despite a slight decline in recent months, and remain the largest source of hard currency earnings, followed by tourism.
Historically, Tonga has not been a major narcotics transit point. There are, however, unconfirmed allegations that Tongan citizens may have links to transnational drug cartels, but the scale of this is unknown. Local police authorities deem Tonga to be vulnerable to smuggling and money laundering due to inadequate and under-resourced border controls.
There are no international sanctions currently in force against this country.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index N/A
World Governance Indicator – Control of Corruption 42
Tonga has a small, open, island economy and is the last constitutional monarchy among the Pacific Island countries. It has a narrow export base in agricultural goods. Squash, vanilla beans, and yams are the main crops. Agricultural exports, including fish, make up two-thirds of total exports. Tourism is the second-largest source of hard currency earnings following remittances. Tonga had 45,000 visitors in 2013. The country must import a high proportion of its food, mainly from New Zealand.
The country remains dependent on external aid and remittances from overseas Tongans to offset its trade deficit. The government is emphasizing the development of the private sector, encouraging investment, and is committing increased funds for healthcare and education. Tonga's English-speaking and educated workforce offer a viable labour market, and the tropical climate provides fertile soil. Renewable energy and deep sea mining also offer opportunities for investment.
Tonga has a reasonably sound basic infrastructure and well developed social services. The government faces high unemployment among the young, moderate inflation, pressures for democratic reform, and rising civil service expenditures.
Agriculture - products:
squash, coconuts, copra, bananas, vanilla beans, cocoa, coffee, sweet potatoes, cassava, taro and kava
tourism, construction, fishing
Exports - commodities:
squash, fish, vanilla beans, root crops
Exports - partners:
Japan 16%, US 15.4%, Fiji 12.8%, NZ 12.5%, South Korea 11%, Samoa 10.7%, Australia 7.5%, American Samoa 6.8% (2015)
Imports - commodities:
foodstuffs, machinery and transport equipment, fuels, chemicals
Imports - partners:
Fiji 37.7%, NZ 21.2%, China 14.2%, US 6.4%, Australia 4.5% (2015)
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