The Pandora Papers give Vanuatu hope for getting off the grey list because criminals cannot hide from the law here, said Director of Vanuatu Financial Intelligence Unit (VFIU), Floyd Mera.
The Pandora Papers are a massive leak of nearly 12 million files, acquired by the International Consortium of Investigative Journalists (ICIJ).
They reveal a globe-spanning network of offshore tax havens used by the rich and powerful to hide their wealth.
Several countries, including Samoa have been mentioned in the papers, but Vanuatu’s name is nowhere to be seen. This is a huge plus that may get Vanuatu off of the grey list.
According to VFIU, Vanuatu is a founding member of the Asia Pacific Group (APG) on Money Laundering which is a sub-regional member of the Financial Action Task Force (FATF).
As a member of the APG, Vanuatu is required to be evaluated on its compliance with the FATF standards.
In 2015, Vanuatu underwent this mutual evaluation, was identified to have significant deficiencies and was placed the FATF Grey list in early 2016.
There were 40 FATF Standards, but Vanuatu was only compliant (or largely compliant) with 10 of these standards.
Director Mera said while Vanuatu was required to comply with the remaining 30 FATF Standards, this effort required big changes to the country’s laws and other relevant mechanisms.
“The Vanuatu Parliament responded by approving 30 pieces of legislative amendments and two new laws, formation and power of a national coordinating committee, formation of coordinating organs (supervisory and law enforcement), strengthened supervisory framework, improved investigative powers, clearer prosecution procedures and enhanced cooperation internationally,” he reflected.
Following these changes, an independent team carried out a follow up onsite in early 2018 and their report justified Vanuatu’s impressive progress. Vanuatu was formally removed from the grey list in July 2018. However, in late 2019 Vanuatu was unilaterally placed on the so-called and little-known EU grey listing of third world countries with strategic Anti-Money Laundering and Counter-Terrorism Financing (AML and CTF) deficiency.
Mr. Mera explained the EU had imposed a new set of standards which Vanuatu was unaware of at that time and quickly placed Vanuatu without giving any chance for an explanation or grace period for Vanuatu to understand and comply with the new EU standard.
It was later seen that Vanuatu’s placement on the EU List was due to Vanuatu’s earlier placement in the EU taxation grey listing. Vanuatu’s AML position can only be repaired once it complies with EU taxation standards.
“With regards to the Pandora Papers, we can safely comment that Vanuatu was not implicated in the paper properly due to increased transparency and accountability of its AML and CTF framework and its increased cooperation internationally. Criminals won’t be safe to hide or evade their legal obligations by using the Vanuatu Financial Centre,” said Director Mera.