Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697776864725.pdf (Fiji)
FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 OUR VISION “Protecting Fiji from Money Laundering” OUR MISSION 1.

Strengthen our compliance with international Financial Intelligence Unit (FIU) and anti-money laundering and combating the financing of terrorism (AML/CFT) obligations; 2.

Implement AML/CFT policies to ensure the safety and integrity of Fiji’s financial system; 3.

Implement an effective intelligence management framework; 4.

Strengthen networking with our partners; 5.


Enhance operational governance and communication.

OUR KEY STRATEGIC GOALS Our strategic goals for achieving the missions are: 1.

Regional FIU Leadership; 2.

Global and Best AML/CFT Practices; 3.

Risk-Based Approach to Implementation of AML/CFT Policies; 4.

Effective Compliance Regime for Financial Institutions; 5.

Effective Tactical and Strategic Analysis Processes; 6.

Information Technology Based Intelligence and Case Management; 7.
Engagement with our Partners; 8.

Information and Intelligence Networking; 9.

High Performance and Effective Team; 10.

Governance and Proactive Communication.

2018 ANNUAL REPORT FIJI FINANCIAL INTELLIGENCE UNIT 1.

FIU ROLE AND RESPONSIBILITIES 2.

DIRECTOR’S FOREWORD 3.

GOVERNANCE STRUCTURE 4.

OUR ACHIEVEMENTS A.

Analysis of Financial Information Received B.


Dissemination of Financial Intelligence C. Supporting and Supervising Financial Institutions’ Compliance D. Domestic Coordination and Engagement E. International Engagement and Contribution 5.

OPERATIONAL GOVERNANCE AND COMMUNICATION 6.

NATIONAL ANTI-MONEY LAUNDERING COUNCIL 7.

APPENDICES 8.

SELECTED KEY STATISTICS 2014-2018 9.

SELECTED KEY EVENTS 2018 STRATEGIC ANALYSIS REPORT 2018 FIJI FINANCIAL INTELLIGENCE UNIT 1.

STRATEGIC ANALYSIS OVERVIEW 2.


OUTCOMES - SUMMARY OUTCOMES 3.

OUTCOMES - SUSPICIOUS TRANSACTION REPORTS 4.

OUTCOMES - CASH TRANSACTION REPORTS 5.

OUTCOMES - ELECTRONIC FUNDS TRANSFER REPORTS 6.

OUTCOMES - BORDER CURRENCY REPORTS 7.

EMERGING AND CONTINUING MONEY LAUNDERING TRENDS 8.

CASE STUDIES 9.
CASE STUDIES 9.

GLOSSARY 2 4 7 9 9 12 15 17 19 24 27 30 33 34 37 39 40 46 48 50 56 57 64 FIU ROLE AND RESPONSIBILITIES 1 The Financial Intelligence Unit (FIU) is established under the Financial Transactions Reporting (FTR) Act.

The role and functions of the FIU are provided under the FTR Act.

The FIU is one of the leading agencies in Fiji that is responsible for preventing and detecting money laundering and terrorist financing activities.
8. enforce compliance by financial institutions with the requirements of the FTR Act, FTR Regulations and FIU Guidelines; 9. provide education and training to its stakeholders; 10. lead and facilitate national coordination; and The FIU is also Fiji’s anti-money laundering (AML) and combating the financing of terrorism (CFT) regulator and the lead agency on AML/CFT policy formulation, compliance and enforcement.
The FTR Act and Regulations specifies a range of measures that financial in Fiji must implement in order to prevent the use of Fiji’s financial system from money laundering, terrorist financing and other serious criminal activities.

institutions1 The vision of the FIU is to protect Fiji from money laundering.
It achieves this vision through the following key functions: 1. receive financial transactions and other information from financial institutions; 2. gather additional from financial institutions, government and other stakeholder agencies; information 3. analyse information; 4. develop intelligence; 5. refer intelligence and information of possible money laundering activities or other serious criminal activities to appropriate law enforcement and regulatory agencies; 6. assist domestic and foreign law enforcement agencies in their investigation and prosecution of money laundering and other serious criminal activities; 7. develop AML/CFT policies, FIU enforceable guidelines and advisories under the FTR Act; 11. maintain networking and information sharing with domestic and foreign partner stakeholders and agencies.
The FIU also plays an important role in international AML/CFT initiatives by contributing to global AML/ CFT programs, policy discussions and information exchange network.

The FIU does not have formal investigative powers to arrest and charge suspects or restrain properties.

The FIU does not have a prosecutorial role.

The FIU’s role as a financial intelligence body in Fiji has become an integral part and contributor in successfully investigating and prosecuting money laundering and other serious crimes.
The FIU also conducts periodic strategic analysis and its outcomes are used by FIU partners including the private sector financial institutions and designated non-financial businesses and professions (DNFBP).

The FIU shares its intelligence and information both spontaneously and upon request from various partner agencies, both domestic and foreign.

The National AML Council provides assistance to the FIU on broad AML policy and national coordination framework.
The Reserve Bank of Fiji (RBF) provides funding and administrative support for the FIU’s operations.

The Fiji Police Force (FPF) and the Fiji Revenue and Customs Service (FRCS) provide additional staffing support to the FIU.

1The definition of “financial institutions” under the FTR Act includes DNFBPs and other non-traditional financial institutions such as non-banks, mobile money remitters, lawyers, accountants and real estate agents.
2 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 The Economic Impact The FIU will continue to contribute to the following key national objectives: • • • ensure the safety and integrity of Fiji’s financial system from financial crimes and money laundering activities.

investors, ensure foreign local businesses and ordinary Fijians are protected from illicit financial transactions and they conduct their trade and financial transactions in a secure environment.
contribute to the investigation and prosecution of fraud, corruption, tax evasion and other complex financial crimes by providing timely and credible law financial enforcement authorities, such as, Fiji Independent Commission Against Corruption (FICAC), FRCS intelligence and information to • • • • and the FPF.

conduct background and due diligence checks on individuals and entities for the Fijian Government and statutory agencies.
ensure that financial institutions (including lawyers, accountants and reals estate agents) implement preventative customer due diligence measures and report suspicious transactions to the FIU.

that Fiji complies with ensure requirements on anti-money combating the financing or terrorism.
international laundering and contribute to national and inter-agency coordination and international networking, particularly on transnational crimes such as human and drug trafficking cases, currency smuggling and cyber fraud.
Safety and integrity of Fiji’s financial system Foreign investors, local businesses and ordinary Fijians are protected from illicit financial transactions Detection, reporting and investigation of suspicious transactions and clients National and international networking and information exchange FINANCIAL INTELLIGENCE UNIT Fiji’s compliance with international AML/CFT requirements Implement preventative customer due diligence measures Contribute to the investigation and prosecution of fraud, corruption, tax evasion and other complex financial crimes Conduct background and due diligence checks 3 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 2 DIRECTOR’S FOREWORD I am pleased to present the 2018 Annual Report of the FIU.
This is the 13th Annual Report of the FIU.

As the lead agency in Fiji for managing the strategic risk of ML/TF, the FIU recognises the importance of our role in ensuring the safety and integrity of Fiji’s financial system from financial crimes and money laundering activities.

The FIU is tasked to develop, implement and enforce AML/CFT preventative measures, financial intelligence management, information exchange, and create awareness on ML and TF trends and typologies.
We also acknowledge that serious illicit financial transactions indicates a shared risk which can be managed with effective coordination and collaboration with international and domestic partners.

Fiji’s AML regime covers an ambit of serious crimes, which include fraud, trafficking in drugs and persons, tax evasion, corruption and cybercrimes.
Due to the global scope and transnational nature of terrorist threats, the CFT regime aims to protect Fiji and the financial system, from terrorism and its financing.
In 2018, the FIU began to more proactively engage with the designated non-financial businesses and professions such as lawyers, accountants and the real estate agents while at the same time the FIU further strengthened its engagement with other industry stakeholders and the enforcement and regulatory authorities to ensure that the requirements under the FTR Act and Regulations are effectively implemented.
The FIU produces strategic financial intelligence and high quality data, which includes patterns and trends analysis for policy formulation which sheds light on the threat posed by financial crimes and money laundering activities.

The major AML/CFT outputs in 2018 reflect the ever challenging environment that the FIU operates in Fiji.
The FIU’s key outcomes in 2018 were the amendments to the FTR Act and Regulations, finalisation of Fiji’s 2nd follow-up report to the Asia Pacific Group on Money Laundering (APG), achievements in intelligence development and networking, leadership role with the APG and the Egmont Group, and improving Fiji’s compliance ratings with the international AML/CFT requirements.
The FIU also contributed to the following functional areas and operational network in 2018: • Intelligence management; • AML/CFT policy formulation and training; • Compliance enforcement; by financial institutions and • Domestic and international networking; • Providing technical assistance and training; and 4 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 • FIU administration and operations.

The 2018 Annual Report is divided into two parts: • Annual Report section; and • Strategic Analysis section.
The Annual Report section highlights key functional and operational outputs while the Strategic Analysis section highlights the underlying patterns and trends.
The following is a summary of the FIU’s outputs and performance for 2018: • • • received 632 suspicious transaction reports; received 968,693 cash transaction reports; received 1,357,246 electronic fund transfers reports; • managed more than 14 million financial transaction • • • • • • reports on our database; handled 969 border currency reports; disseminated 321 enforcement agencies; intelligence reports to law issued 15 Alert Notices to financial institutions on suspicious persons and entities; issued two Directives to financial institutions; handled 260 requests for investigative assistance from law enforcement agencies in relation to 1,241 individuals and 1,077 entities; for due diligence and handled 118 requests background checks from government agencies in relation to 259 individuals and 95 entities; • made 446 enquiries and requests for further information from financial institutions; • provided AML and FTR Act training to 376 officers of financial institutions and 65 officers of law enforcement agencies; • continued to provide secretarial support for the National AML Council and its three AML Working Groups; • • issued 51 ad-hoc policy advisories; conducted AML onsite compliance examinations of eight law firms and five real estate agents; • managed networking with 127 registered AML Compliance Officers of financial institutions (since 2006); • managed 192 current authorised users of the FIU’s online IT system; and • signed a Memorandum of Agreement (MOA) with the Papua New Guinea FIU.
International and Regional Leadership: I continued with my role as Fiji’s primary contact point for APG and led the Fijian delegation to the APG plenary meeting in Kathmandu, Nepal in 2018 where Fiji’s follow-up report was discussed and compliance ratings were upgraded.
Looking ahead in 2019: The FIU will continue to engage with the its key partner agencies and reporting institutions to combat money laundering and the financing of terrorism, particularly drug trafficking, cybercrime and other serious fraud and criminal activities.

The FIU will ensure that it meets the expectations of the law enforcement agencies in our unique role as “one-stop-shop” for information exchange.
The FIU will also work closely with the APG on Fiji’s mutual evaluation process by providing regular reports and updates on the progress Fiji is making to align our AML/CFT systems in line with the international standards.

The FIU will continue to collaborate with the National AML Council on implementation of APG recommendations and the findings of the national risk assessment.
The FIU will continue to support the the 5 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 implementation of the national security strategy, the national cybersecurity strategy, the unexplained wealth task force and counter-terrorism and its financing framework.

Onsite examination of the DNFBP sector will continue in 2019.

The FIU will also finalise and introduce its strategic plan for 2019–2024.
The highlight of the new strategic plan is our five pillars that meets the statutory “functions, duties and powers” of the FIU as provided under the FTR Act.

While we have retained our vision of “Protecting Fiji from Money Laundering”, the strategic plan will also reflect the environment in which the FIU will operate in the next five years, particularly, redefining and advancing our technology driven data quality and intelligence data mining processes.
I would like to thank the Governor and the Board of the Reserve Bank of Fiji for providing financial and administrative support to the FIU in 2018.

I would like to also thank the Commissioner of Police and the Chief Executive Officer of the FRCS for seconding their officers to the FIU.

I look forward to working more closely with our stakeholders in 2019 in achieving our vision of “Protecting Fiji from Money Laundering”.
Razim Buksh Director Financial Intelligence Unit 6 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 3 GOVERNANCE STRUCTURE Statutory Agency The FIU is an independent and administrative statutory agency of the Fijian Government.

The powers, duties and functions of the FIU are clearly defined in the FTR Act.

The FIU was established in January 2006 under the FTR Act.

Minister for Justice The Minister for Justice is the line Minister responsible for the FTR Act.
Pursuant to section 23(3) of the FTR Act, the Minister is directly responsible for the performance of the Director of the FIU.

The Minister is also responsible for appointing the Director of the FIU on the recommendation of the National AML Council.

Governor of the Reserve Bank of Fiji Pursuant to a ministerial delegation under the FTR Act, the Director of the FIU reports to the Governor of the RBF for the discharge of his powers, duties and functions provided under the FTR Act.
Subsequent to this delegation and on the recommendation of the Governor, the Board of Directors of the RBF approved the organisation structure of the FIU.

Director of the FIU The Director of the FIU is responsible for exercising the powers, duties and functions of the FIU as specified in the FTR Act.

The Director is responsible to the Minister for Justice or such other person as the Minister may appoint, in the performance of his duties.
Following the Minister’s delegation of his responsibility in 2005, the Director is now directly responsible to the Governor of the RBF in the performance of his duties.

The Director is a member of the National AML Council.

He is also the advisor to the Minister and the Governor on matters laundering, terrorist relating to combating money financing and related offences in Fiji.

Accountability to the Governor The FIU’s administrative processes and procedures are linked to that of the RBF.
Therefore, the FIU complies with the corporate planning, budgeting, human resources and other policies and processes of the RBF.

The FIU’s annual work plan and budget are presented to the Governor and the RBF Board for their approval before each new financial year.

The Director FIU provides monthly reports to the Governor of the RBF on the FIU’s performance and achievement of work plan targets.

The Director of MINISTER FOR JUSTICE • Minister responsible for the FIU under the FTR Act.
• Delegated his responsibilities under the FTR Act to the Governor of the RBF in 2005.

GOVERNOR AND RBF BOARD DIRECTOR FIU • Responsible for the administration of the FIU under the delegation of powers from the Minister for Justice.

• Responsible for the approval of FIU annual work plan and budget.

• Responsible for the powers, functions and duties of the FIU as specified in the FTR Act.

• Reports directly to the Governor of the RBF.


NATIONAL AML COUNCIL • Responsible for providing advice and assistance to the FIU on the prevention of money laundering and terrorist financing activities in Fiji.

• Provides recommendations to the Minister and Governor on the appointment of the Director.

7 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 the FIU also provides regular progress updates to the National AML Council, Governor and Board of the RBF on key FIU outputs and outcomes.
Reporting to the National AML Council The National AML Council is established under the FTR Act and its members, roles and functions are also provided under the FTR Act.

The Council provides broad policy advice, assistance and guidance to the FIU on the prevention of money laundering, terrorist financing and related activities in Fiji.

The Council is also responsible for making recommendations to the Minister on the appointment of the Director of the FIU.
The FIU provides regular reports and updates to the National AML Council.

Funding and Administration The FIU is fully funded by the RBF and is organised as a separate functional group within the RBF’s organisation structure.

The annual budget of the FIU is submitted for the approval by the Board of the RBF each year.

The FIU is accountable to the Governor and the Board for the use of funds allocated annually The FIU is administratively housed within the RBF.
The FIU is subject to all the administrative protocols, policies and procedures of the RBF.

Due to the nature of its establishment as part of the RBF, the FIU does not prepare and publish annual financial statements on its operations.

The expenditure of the FIU is included in the financial statements of the RBF and is subject to the Bank’s internal and external audit.

The FIU also receives indirect financial support from the FPF and the FRCS through staff secondment to the FIU on a full time basis.
The secondment arrangement is provided under MOAs the FIU has signed with the two agencies.

The FIU does not currently receive any supplementary funding support from the Fijian Government.
Operational Governance As a member of the Egmont Group of international FIUs, the Fiji FIU implements world class operating standards, protocols and procedures on the following key responsibilities: • international cooperation and information exchange; • receipt of confidential and sensitive information; • analysis and intelligence development; • information security; • compliance and enforcement actions; and • operational independence and security.
The FIU also complies with the FATF Recommendation 29 and its Interpretative Note on financial intelligence units.

Independence of the FIU While the FIU is administratively dependent on the RBF, the technical functions of the FIU are independent of the RBF.

The Director of the FIU is responsible and accountable for the decisions relating to the delivery of the FIU core outputs.

The functional and operational independence of the FIU is provided under Part 4 of the FTR Act.
The FTR Act requires that the consideration for appointment of Director FIU by the Minister (Governor of the RBF under delegation of authority) is subject to the recommendation of the National AML Council.

The FTR Act also provides how the remuneration package of the Director FIU is determined.

To ensure that the functions of the FIU are not influenced by other parties, the Director of the FIU is solely vested with the powers to discharge the statutory and functional responsibilities of the FIU.
8 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 4 OUR ACHIEVEMENTS A.

ANALYSIS OF FINANCIAL INFORMATION RECEIVED A key function of the FIU is to analyse suspicious transaction reports and other financial transactions reports that it receives from financial institutions2, members of the public and other agencies in Fiji.

In 2018, the FIU received a total of 2,327,540 financial transaction and other reports.
These reports consisted of suspicious transaction reports (STR); cash transaction reports (CTR); electronic funds transfer reports (EFTR) and border currency reports (BCR).
Financial Transaction Reports Received 2014- STR CTR EFTR BCR TOTAL Monthly Total Average Source: Fiji FIU The FIU has received more than 14 million financial transaction reports since it was established.
Financial Transaction Reports Received 2000-2018 STR CTR EFTR BCR TOTAL Source: Fiji FIU Total Reports Received 2000-2018 7,949 4,834,075 9,209,594 969 14,052,587 Highlights of financial transaction reports received by the FIU in 2018 are provided below.

The FIU also conducts strategic analysis of financial transaction reports received which is provided in the strategic analysis section of this Annual Report.
Suspicious Transaction Reports The FIU received 632 STRs3 in 2018 or an average of 53 STRs per month.

This reflects a decrease of 3 percent compared to 650 STRs reported in 2017.

Suspicious Transactions Reported 2014-2018 No.

of STRs 650 632 579 516 383 700 600 500 400 300 200 100 0 2014 2015 2016 Years 2017 2018 Source: Fiji FIU Financial institutions are required under section 14 of the FTR Act and section 24 of the FTR Regulations to report suspicious transactions to the FIU.
A suspicious transaction is a transaction or attempted transaction which a financial institution has reasonable grounds to suspect may be related to a “serious offence, a money laundering offence or an offence of the financing of terrorism”.

Cash Transaction Reports The FIU received 968,693 CTRs in 2018 or an average of around 81,000 CTRs per month.

This is an increase of 55 percent compared to 623,213 CTRs reported to the FIU in 2017.
This increase is largely attributed to the reporting of all transactions of $10,000 and above by a particular financial institution.

2Financial institutions include designated non-financial businesses and professions.

3The number of STRs reported and the funds that are involved in suspicious transactions do not necessarily indicate the size of money laundering activity in Fiji.
However, these transactions have been subject to a greater level of scrutiny by reporting financial institutions and have been flagged and reported as questionable, unusual and suspicious transactions.

The figure suggests money laundering symptoms, risks and vulnerabilities in Fiji.

9 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Cash Transactions Reported 2014-2018 No.
of CTRs 1,200,000 1,042,074 579,849 591,636 623,213 1,00,000 800,000 600,000 400,000 200,000 0 Commercial banks and remittance service providers (including mobile phone money remitters) are required under section 13(2) of the FTR Act and section 26 of the FTR Regulations to report to the FIU all international electronic fund transfer transactions.

There is no monetary threshold for EFTRs.

968,693 Border Currency Reports In 2018, the FIU received 969 BCRs.
This is an increase of 22 percent compared to 792 BCRs received in 2017.

There were more declarations made by outbound travellers compared to inbound travellers.

2014 2015 2016 Years 2017 2018 Source: Fiji FIU Border Currency Declarations 2014-2018 Financial institutions are required under section 13(1) of the FTR Act and section 25 of the FTR Regulations to report to the FIU any cash transaction of $10,000 and above or its equivalent in foreign currency.
Cash includes coin or paper money, bank drafts, bank cheques, bearer bonds, travelers cheques, postal notes and money orders.

No.

of BCRs 1200 1000 800 600 557 547 491 969 792 Electronic Fund Transfers Transaction Reports The FIU received 1,357,246 EFTRs in 2018 or an average of around 113,000 per month.

This is an increase of 11 percent compared to 1,220,602 EFTRs reported in 2017.

400 200 0 Electronic Fund Transfer Transactions Reported 2014-2018 No.
of EFTRs 2014 2015 2016 Years 2017 2018 Source: Fiji FIU 1,308,633 1,220,602 1,148,711 1,029,993 1,357,246 Travellers into or out of Fiji are required to declare if they carry currency or negotiable bearer instruments of $10,000 or more (or its equivalent in foreign currency).

This is required under section 32 of the FTR Act.
BCR Declarations by Direction of Travel 2014-2018 Sector 2014 2015 2016 2017 2018 Declarations made by inbound travellers Declarations made by outbound travellers 231 187 265 375 434 326 304 282 417 535 2017 2018 Source: Fiji FIU TOTAL 557 491 547 792 969 Source: Fiji FIU 1,400,000 1,200,000 1,00,000 800,000 600,000 400,000 200,000 0 2014 2015 2016 Years 10 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 FIUs Reporting and Intelligence Development As required under section 25(1) of the FTR Act, the FIU is required to analyse and assess all reports and information that it receives including information that is received from members of the public.
The FIU uses tactical analysis procedures as set out in its standard operating manual to analyse all STRs and develop intelligence of possible money laundering or other serious offences.

Other reports received by the FIU such as the CTRs and EFTRs while not analysed in detail, provide critical information which are used to analyse STRs.

During 2018, the FIU continued to use FFIMSO in its intelligence processes.
The FIU uses its Alert and Monitoring System (AMS) which monitors all financial transaction reports maintained on the FFIMSO database for identifying suspicious transactions.

The FIU also continued to use a Data Mining System (DMS) to analyse financial transaction data captured in the FFIMSO database.

The DMS identifies links, relationships and patterns of suspicious financial activities.
The AMS and DMS proactively identifies suspicious transactions and reports this weekly to FIU analysts for their further analysis.

The FIU is developing a STR case management system that will be completed and implemented in 2019.

The BCRs are collected by FRCS and sent to the FIU for data mining and analysis for possible currency smuggling, money laundering and related criminal offences.
FIU Enquiries with Financial Institutions As part of its analysis process, the FIU makes enquiries with financial institutions.

The queries are aimed at developing further intelligence on information already provided on the STRs.

FIU queries may also be in relation to an ongoing investigation of money laundering offence or proceeds of crime case.

The FIU has powers to obtain information from relevant financial institutions under sections 14(3), 25(1)(c), 25(1)(h) and 28 of the FTR Act.
In 2018, 446 queries for further information were made by FIU to commercial banks (86 percent) and other financial institutions (14 percent).

Monthly FIU Queries to Financial Institutions 2018 Commercial Banks Other Financial Institutions No.

of Queries 70 60 50 40 30 20 10 0 J F M A M J J A S O N D Months Source: Fiji FIU FIU Queries to Financial Institutions (Excluding Commercial Banks) 2018 No.
of Queries 30 25 20 15 10 5 0 Others Finance Companies Money Remittance Service Providers Insurance & Superannuation Law Firms Financial Institutions (excluding commercial banks) Source: Fiji FIU The queries sent to financial institutions included requests for: i. customers’ transaction history; ii.

customers’ identification details; iii.

customers’ account details; iv.

copies of documents such as identification documents; v. customer transaction queries; vi.

follow ups and clarifications; vii.


originator information enquiries; 11 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 viii.

payment instrument (cheque) details; and Case Dissemination Reports 2014-2018 ix.

customer payment and asset details.

No.

of CDRs Nature of FIU Queries to Financial Institutions 2018 Others, 27, 3% Customer and account details, 445, 50% Transaction History Customer and account details Transaction history, 421, 47% Others Source: Fiji FIU B.
DISSEMINATION OF FINANCIAL INTELLIGENCE Intelligence Reports to Law Enforcement Agencies Disseminating financial intelligence to law enforcement agencies is a core function of the FIU.

Financial intelligence enables our law enforcement partners to investigate predicate crimes, money laundering and terrorist financing activities.

The FIU’s intelligence reports also provide profiling of suspected proceeds of crime and proceeds linked to tax evasion.
The FIU analyses suspicious transaction and other financial transaction information to develop intelligence.

The results of the FIU’s analysis of STRs are disseminated to relevant in a case law enforcement agencies dissemination report (CDR).
500 450 400 350 300 250 200 150 100 50 0 241 255 2014 2015 195 2016 Years 448 321 2017 2018 Source: Fiji FIU Case Dissemination Reports to Law Enforcement Agencies 2014-2018 Law Enforcement Agency and Reason for Dissemination FRCS - Inland Revenue Services 2016 2015 2017 2014 2018 Possible violations under the Income Tax Act and VAT Decree.

FPF *including Transnational Crime Unit.

Possible violations under the Proceeds of Crime Act and serious offences under the Crimes Decree.
Immigration Department Possible violations under the Immigration Act and Passport Act.

FRCS - Customs Division Possible violations under the Customs Act.

 In 2018, 321 CDRs were referred to law enforcement agencies compared to 448 CDRs in 20174.

The CDRs were developed from reports of suspicious transactions received in 2018 and prior to 2018.
Others5 TOTAL Source: Fiji FIU 4Due to strict confidentiality requirements, this annual report does not discuss details of cases currently being investigated as a result of the FIU’s intelligence.

Cases that involved proceeds of crime that were subject to monitoring, restraining, confiscation or forfeiture orders as a result of FIU’s intelligence are also not mentioned in this report.
Convictions of money laundering and proceeds of crime cases have been published as case studies and have been included in the FIU Strategic Analysis Report.

12 5Other Law Enforcement Agencies include FICAC, RBF and foreign law enforcement agencies.

FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 In 2018, 65 percent of the CDRs were disseminated to FRCS while 19 percent of CDRs were disseminated to the FPF.
Intelligence that is developed from a single STR is sent in some instances to more than one law enforcement agency as it may involve suspected violations of different laws.

The FIU also, after detailed analysis, filed away 248 STRs during 2018 for future intelligence references compared to 314 STRs in 2017.
STRs are filed away for future intelligence references and analysis, if after analysis and intelligence gathering, the FIU is able to reasonably conclude that the transaction or information does not involve a money laundering offence or other serious offence.

Alert Notices to Financial Institutions From time to time, the FIU may need to disseminate alerts or directives to financial institutions in relation to information it has received under the FTR Act.
The FIU issues Alert Notices to financial institutions, in order to protect the financial system from being used by adversely reported individuals and business entities.

An Alert Notice contains information on adversely individuals and/or business entities that reported require enhanced due diligence and scrutiny by financial institutions.

Due to the sensitivity and confidentiality of the Alert Notice, financial institutions are advised to circulate the Alert Notices internally with caution.
There were 15 Alert Notices and Instruction Notices issued by the FIU in 2018.

Directives to Financial Institutions The FIU has powers under section 25(1)(h) of the FTR Act to issue enforceable directives to financial institutions to take appropriate steps in relation to any information or report received by the FIU and to enforce compliance with the FTR Act or facilitate any investigation anticipated by the FIU or a law enforcement agency.
Alert & Instruction Notices Issued 2018 Date Alert Notice Number Issued To Details 15 February 1/2018 Commercial banks 21 February 2/2018 1 March 3/2018 19 March 4/2018 23 March 5/2018 8 June 6/2018 22 June 7/2018 Commercial banks and money remittance service providers Commercial banks and foreign exchange dealers and money changers Commercial banks and money remittance service providers Commercial banks and money remittance service providers Commercial banks and money remittance service providers Commercial banks and money remittance service providers 5 July 8/2018 Commercial Bank 10 July 9/2018 Commercial Bank 2 August 10/2018 23 August 11/2018 12 October 12/2018 Commercial banks and money remittance service providers Commercial banks and money remittance service providers Commercial banks and money remittance service providers 9 November 13/2018 Commercial bank 6 December 14/2018 21 December 15/2018 Source: Fiji FIU Financial institutions & members of the public Commercial banks and money remittance service providers Fraudulent Swift Messages Possible Advance Fee Fraud Stolen Currencies Possible Advance Fee Fraud Stolen Currencies Stolen Currencies Possible Advance Fee Fraud Temporary transaction suspension Temporary transaction suspension Possible Advance Fee Fraud Possible Advance Fee Fraud Possible Advance Fee Fraud Request for Pre- Authentication EFTPOS Machine Email Compromise & Email Spoofing Possible Advance Fee Fraud The FIU issued only two such directives in 2018 to a commercial bank.
The directives issued were in relation to the following: i. undertaking enhanced due diligence on customers; ii.

establishing source of funds; iii.

ascertaining the ultimate destination of any subsequent withdrawal transaction(s); 13 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 iv.

identifying any third party transactions; and v. seeking approval in writing of the FIU before proceeding with any transaction(s).
In 2018, the FIU cancelled one directive that was previously issued due to successful investigations by law enforcement agencies.

The FIU also uses directives to temporarily suspend a transaction until the customer provides all necessary information to the financial institution as stipulated in the directive, consistent with the customer due diligence requirements under the FTR Act and FTR Regulations.
Section 7 of the FTR Act and section 19(3)(c) of the FTR Regulations requires financial institutions to not proceed any further with a transaction unless directed to do so in writing by the FIU.

The Alert Notices and Directives are enforceable instructions of the FIU and must be implemented by the financial institutions as directed.

Investigative Assistance Provided to Law Enforcement Agencies The FIU also provides assistance to law enforcement agencies upon request.
The request for assistance from the law enforcement agencies are related to investigations of suspected money laundering activities and other predicate offences such as forgery and fraud, drug trafficking/dealing, human trafficking, obtaining money by false pretences, larceny and corruption.

The requests may also be related to investigations initiated by a CDR that was disseminated to a law enforcement agency.
The FIU received 260 requests in 2018 compared to 205 requests in 2017 from local law enforcement agencies such as the FPF, FICAC, Department of Immigration, Transnational Crime Unit and FRCS.
Requests for Investigative Assistance 2018 Requesting Agency Number of Requests FICAC Fiji Police Force FRCS Immigration RBF Others TOTAL Source: Fiji FIU 14 28 84 113 25 7 3 260 Number of Checks on Entities 15 119 859 54 27 3 1,077 Number of Checks on Individuals 84 285 746 115 6 5 1,241 The FIU also assists law enforcement agencies in their investigations by facilitating the process to trace and temporarily suspend suspected proceeds of crime and criminal funds that is suspected to be transacted or held within financial institutions and to also ensure that the funds are immediately secured while the formal investigations into the suspected criminal activity is underway.
Dissemination of Information to Foreign FIUs information from The FIU receives requests for foreign FIUs.

In 2018, the FIU received 13 requests for information from foreign FIUs through the Egmont Secure Web (ESW) and other formal communication compared to 25 requests received in 2017.

The FIU also sent eight requests for information to foreign FIUs through the ESW in 2018.
Due Diligence The FIU provides assistance to conduct background and due diligence checks on individuals and entities upon a request made in writing from a Government department or authority.

Requesting agencies are required to fill out the FIU request form and provide relevant details on the individuals and businesses that are under scrutiny.

In 2018, the FIU received 118 requests for background and credibility checks compared to 75 requests in 2017.
The checks were conducted on 95 entities and 259 individuals.
Requests for Background Checks 2018 Requesting Agency Number of Requests Office of the Prime Minister Office of the Solicitor General Investment Fiji Fiji Pharmaceutical and Biomedical Services Ministry of Lands Ministry of Sugar Industry Energy Fiji Limited Fiji Immigration Department Ministry of Infrastructure Ministry of Industry, Trade & Tourism Ministry of Defence Biosecurity Authority of Fiji Commissioner Central Office FRCS - Policy REALB RBF TOTAL Source: Fiji FIU 1 1 12 5 2 1 1 2 1 48 1 1 4 23 1 14 118 Number of Checks on Entities 1 2 5 Number of Checks on Individuals FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 C. SUPPORTING AND SUPERVISING FINANCIAL INSTITUTIONS’ COMPLIANCE to The FIU promotes a “risk-based” approach implementing the FTR Act and provides guidance to financial institutions to comply through issuance of policies and provision of training.
The requirements in the FTR Act, commonly referred to as “preventive measures” are based on international AML/CFT standards, the Financial Action Task Force (FATF) Recommendations.
Entities and businesses that are required to comply with the requirements of the FTR Act include: i. financial institutions such as, commercial banks, insurance companies and intermediaries, finance companies, money remitters, money changers, investment advisors, brokers and dealers, unit trust or managed funds, mobile phone banking service providers; and ii.

other DNFBPs, such as, accounting firms, law firms, real estate agents or businesses.
All entities and businesses that are covered by the FTR Act are referred to as “financial institutions” under the law.

Real Estate Agents Commercial Banks Finance & Credit Companies AML Guidelines and Policy Advisories In 2018, the FIU continued to provide financial institutions with advice and guidance on the requirements under the FTR Act and Regulations.

The FIU provides advisories and guidelines aimed at helping financial institutions gain a better understanding of their obligations under the laws.
During 2018, the FIU issued three Enforceable Guidelines.
Enforceable Guidelines Issued 2018 Guideline Title Date Issued Purpose of Guideline the money Proliferation institutions Requires financial identify and and DNFBPs to assess laundering (ML), terrorist financing (TF) and Financing (PF) risks that may arise in relation to the development of new products and new business practices, including new delivery mechanisms, and the use of new or developing technologies for both new and pre-existing products and services.
Outlines further requirements relating to dealing with higher risk countries and countries that have been identified as having inadequate systems in place to detect or prevent ML, TF and PF risks emanating from these countries.

Outlines further requirements on due diligence of domestic and international organisation politically exposed persons.
Risk Assessment of New Products, New Business Practices and Technologies 31 January Dealing with Higher Risk Countries 31 January Politically Exposed Persons 27 March Source: Fiji FIU The FIU also issued two Policy Advisories in 2018.
Insurers and Insurance Brokers Policy Advisories Issued 2018 Guideline Title Date Issued Purpose of Guideline Lawyers Accountants Mobile Phone Banking Financial Institutions Superannuation Fund Parenthood Assistance Payment Programme 8 August Money Remitters Stock Exchange Investment Advisers, Brokers and Dealers, Investment Fund Money Changers Change in Account Name for Existing Private Companies 23 November Source: Fiji FIU To provide clarification on the application of customer due diligence requirements on bank account opening for recipients of the Parenthood Assistance Payment Programme.
clarification on To provide customer due diligence the requirements the FTR Act and how it aligns to the the requirements under changes Companies Act on to names of existing Private Companies.

under 15 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Appendix 1 lists the Guidelines issued by the FIU to date.

The Guidelines provide detailed guidance on the requirements under the FTR Act relating to suspicious transaction reporting, cash transaction reporting and customer identification and verification.
Appendix 2 lists the Policy Advisories issued to date by the RBF.

These Policy Advisories address very specific issues relating to the FTR Act.

The FIU also provides policy advice on an ad-hoc basis, as and when requested by financial institutions.

In 2018, the FIU issued 51 ad-hoc policy advisories explaining various requirements of the FTR Act and Regulations.
To ensure consistent application and understanding of FTR requirements across all the covered financial institutions, the FIU disseminates its policy advisories to all the institutions.
Ad-hoc Policy Advisories Issued by FIU 2018 Nature of Advisory Number of Ad-hoc Advisories Issued Customer Due Diligence Requirements Transaction Reporting Requirements Other Issues (FIU Alert Notices, role of compliance officer, AML developments) TOTAL Source: Fiji FIU 18 18 15 51 The FIU continued to engage with the AML Compliance Officers of the various financial institutions during the year.

The FIU held five interactive forums for AML Compliance Officers during the year.
The sectors covered in these forums included banks, finance companies, restricted foreign exchange dealers, real estate agents, lawyers and insurance companies and brokers.

These forums provided a platform for the FIU to update the AML Compliance Officers on new regulatory developments and money laundering trends and to clarify policy requirements.

During 2018 increased its engagement with the real estate and legal sector to enhance industry level awareness and compliance.
The engagement was through one-on-one meetings and forums with AML Compliance Officers.

Induction seminar for newly appointed AML Compliance Officers The FIU and RBF are required under the FTR Act to supervise and ensure that financial institutions comply with the FTR Act and Regulations.

The FIU conducted onsite compliance visits of eight law firms and five real estate agents to assess these businesses’ compliance with the FTR Act and Regulations.
Key findings from the FIU onsite examination of the law firms and real estate agents included: • no written AML policy or procedures in place; • most of the firms were not fully aware of their reporting obligations under the FTR Act thus failed to report CTRs and STRs; • • staff were not provided with AML training; and there was lack of monitoring of clients’ engagements or transactions for any complex, unusual or large transactions.
The results of the assessments were shared with the management of the respective businesses with recommendations for further improvement in internal processes.

The FIU also continued with its offsite assessment and review of transaction reporting and record keeping obligations of financial institutions in Fiji.

The FIU relied on the onsite supervision program of the RBF to assess the compliance of RBF licensed financial institutions with the FTR Act and Regulations.
From left: AML Compliance Officers Forums for insurance companies, insurance brokers and banks 16 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 The FIU provided policy advice to RBF supervisors as and when needed on AML/CFT compliance issues.

The FIU also provided assistance to the RBF on AML/CFT section of the on-site examinations of RBF licensed financial institutions.
Supervisor of Financial Institutions and Designated Non- Financial Businesses and Professions RBF FIU Finanial Institutions licensed by RBF under the following laws: 1.

Banking Act 2.

Exchange Control Act 3.

Companies Act 4.

Insurance Act Other financial institutions not under the supervision of the RBF: 1.

Accountants 2.

Lawyers 3.

Real Estate Agents 4.


Other Financial Institutions Awareness Forum for real estate agents in 2018 Training and Awareness Programs for Financial Institutions In 2018, the FIU provided training and awareness presentations to various financial institutions which were attended by a total of 376 employees.

The training covered the financial institutions’ obligations under the FTR Act and Regulations.
Training to Financial Institutions 2018 Sector Number of Employees Accounting Firms Real Estate Agents Remittance Service Providers Banks Finance Companies Investment Advisers, Brokers and Dealers, Investment Fund TOTAL Source: Fiji FIU 116 185 25 23 17 10 376 D. DOMESTIC COORDINATION AND ENGAGEMENT National AML Council The FIU continued to provide secretarial support for the National AML Council and its three AML Working Groups (Legal Working Group; Supervisors and Regulators Working Group; and Law Enforcement Working Group).
There was one meeting of the National AML during 2018.

It continued to progress key national outputs during the year.

Its work was also supported by the three AML Working Groups (Refer to section on National AML Council for more information).

The Director FIU is a member of the National AML Council and participated in the Council’s activities for 2018.

Other FIU staff also actively contributed to the work of the AML Working Groups.
The FIU provided high level updates to the Council on key issues such as the rise in email scams in Fiji during 2018, the FIU’s networking with FRCS and update on Fiji’s compliance with the FATF Recommendations.
During 2018, the FIU also provided advice to the Council on measures needed to address the deficiencies raised in Fiji’s 2016 mutual evaluation report (MER) relating to transparency of companies’ beneficial owners, review of the non-profit organisation sector and financial sanctions relating to terrorist financing and proliferation financing.
17 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Engagement and Exchange of Information with Partner Agencies The FTR Act provides the FIU with the mandate to enter into MOAs with other agencies.

The MOAs allows the FIU to exchange information and enhance networking and cooperation with domestic partner agencies.

The FIU has signed MOAs with 12 local partner agencies to date.

The FIU continued to engage with these partner agencies during 2018.
As part of these MOA arrangements, authorised officers from the FPF, FRCS and FICAC continued to have direct access to the FIU database.

In 2018, there were 22 officers who had this direct access to the FIU database.

The officers used this arrangement to obtain intelligence on persons or entities of interest who are subject to their investigations.

NCLASA The Director of the FIU is a member of the National Combined Law and Security Agencies (NCLASA) Committee.
NCLASA is Fiji’s national information issues comprising sharing framework on security approximately 38 agencies with the Ministry of Defence as the epicentre.

The NCLASA framework is to inevitably provide appropriate responses to the security challenges, domestically and internationally, and to create a conducive environment for cooperation and information sharing between members Agencies.

Unexplained Wealth Taskforce The Unexplained Wealth Taskforce held four meetings during 2018.
The Taskforce is made up of representatives from the FIU, FPF, FRCS and FICAC.
The objective of the Taskforce is to enable these member agencies to MOAs with Domestic Partner Agencies Agency Date MOA Signed Type of MOA Immigration Department 12 July 2007 Information exchange FRCS Fiji Police Force 28 November 2007 Information exchange and secondment of two staff with the FIU 12 September 2014 (amendment) 24 January 2008 11 December 2014 (amendment) Direct access to FIU database Information exchange and secondment of a staff with the FIU Direct access to FIU database Investment Fiji 13 June 2008 Information exchange Ministry of Justice 3 July 2008 Information exchange Land Transport Authority FICAC Joint Taskforce RBF/ FRCS/FIU Maritime Safety Authority of Fiji 5 October 2009 Information exchange 3 November 2009 Information exchange 14 April 2010 Information exchange 16 August 2012 Information exchange RBF 17 April 2014 Information exchange Fijian Elections Office 11 August 2016 Information exchange Real Estate Agents Licensing Board Source: Fiji FIU 24 April 2017 Information exchange Authorised FRCS Officer accessing the FIU database Officers from FRCS and the FPF continued to be seconded to the FIU in 2018 as provided under the MOA arrangement.
Two of the seconded officers are from FRCS and one officer is from the FPF.

Secondment Officers for 2018 from left: Peni Tikosireli (FRCS); Riteshni Dayal (FRCS); WPC Sereima Tuvatuvanikula (FPF) 18 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 network and collaborate on cases of unexplained wealth.

The FIU contributed to the work of the Taskforce during 2018.

Cyber Security Working Group The FIU is part of Fiji’s national cyber security working groups on technical, legal and security issues.
The FIU contributed to the discussions of the Working Group during 2018.

Counter Terrorism Officials Working Group The FIU is a member of the Counter Terrorism Officials Working Group (CTOG), a national Working Group which is responsible for developing and implementing Fiji’s counter terrorism strategy.

During 2018, the FIU continued to contribute to the meetings, policy discussions and work of CTOG.
Training and Awareness Programs for Law Enforcement Agencies The FIU continued to provide training and awareness briefings to law enforcement agencies during the year on money laundering and the role and functions of the FIU.

A total of 65 law enforcement officials attended these training sessions.
FIU Training Provided to Law Enforcement Agencies and Prosecutors 2018 Date Particular of Training Participating Agencies Number of Participants 15-17 January Role of the FIU 5 March Role of the FIU FICAC FPF TOTAL Source: Fiji FIU 40 25 65 E. INTERNATIONAL ENGAGEMENT AND CONTRIBUTION Fiji Mutual Evaluation - Progress Update Fiji’s mutual evaluation report (MER) was tabled at the 2016 APG Annual Meeting.
The mutual evaluation report outlines the findings of an assessment held in 2015 of Fiji’s compliance with the international AML/ CFT standards, the FATF Recommendations.

The 2016 MER noted that Fiji had 23 non-compliant/partially compliant ratings with the FATF 40 Recommendations and 11 low or moderate levels of effectiveness on the 11 Immediate Outcomes on effectiveness.

The MER provides key gaps and deficiencies for Fiji to address.
These include, among others: (i) revisions of current laws such as the FTR Act, Proceeds of Crime Act, Public Order Act and Police Act; (ii) seeking additional powers for law enforcement agencies and strengthening the resources of key government agencies such as the FPF; and (iii) enhancing preventive measures particularly for lawyers, accountants and real estate agents.

Fiji submitted its first Follow-Up Report (FUR) in January 2017.

Its second FUR was submitted in January 2018.


The key findings of Fiji’s second FUR noted that Fiji has made good progress in addressing the technical compliance with: (i) amendments to the FTR (Amendment) Act 2017 and FTR Regulations 2017 to rectify deficiencies in the enforceability of preventive measures; (ii) enactment of the Public Order (Amendment) Act 2017 to address deficiencies in the definition of the TF offence; and (iii) ratification of the Palermo Convention.
The APG membership noted the progress made by Fiji in strengthening its AML/CFT framework.

Therefore, the APG upgraded Fiji’s technical compliance ratings for eight FATF Recommendations (which were previously rated as non-compliant or partially compliant in the 2016 mutual evaluation report) to largely compliant or compliant.
19 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 FATF Rec Description Rating 2016 MER R.2 R.12 R.15 R.19 R.22 R.23 R.28 R.36 Partially Compliant Partially Compliant Partially Compliant National Cooperation & Coordination Politically Exposed Persons New Technologies High Risk Countries Non-Compliant Designated Non- Financial Businesses & Professions DNFBP- Other Measures Regulation and Supervision of DNFBPS International Instruments Non-Compliant Partially Compliant Partially Compliant Partially Compliant Rating After 2018 Plenary Meeting Largely Compliant Compliant Compliant Compliant Largely Compliant Largely Compliant Largely Compliant Largely Compliant The FIU liaised closely with the APG secretariat in the discussions leading up to the discussion of Fiji’s detailed progress report at the 2017 APG Annual Meeting and the subsequent upgrade in Fiji’s compliance ratings.
Since submissions of these two FURs (2017 and 2018), the APG has upgraded Fiji’s compliance ratings for 16 FATF Recommendations to a “largely compliant” or “compliant” ratings (from either a non-compliant or partially compliant rating).

Fiji’s Compliance Ratings and Upgrades Rec.
Description Rating MER 2016 Assessing Risks & Applying a Risk Based Approach National Co-operation & Co-ordination Confiscation & Provisional Measures Terrorist Financing Offence Targeted Financial Sanctions related to Terrorist Financing Targeted Financial Sanctions related to Proliferation Financing Non Profit Organisations Financial Institutions Secrecy Laws Customer Due Diligence Record Keeping Politically Exposed Persons Correspondent Banking 1 2 3 ML Offence Money or Value Transfer Services 15 New Technologies 16 Wire Transfers Reliance on Third Parties 17 18 Internal Controls 19 High Risk Countries 20 21 22 Designated Non-Financial Businesses and Professions (DNFBP) 23 DNFBP- Other Measures 24 25 26 27 28 29 30 31 32 33 34 Guidance and Feedback 35 36 37 Mutual Legal Assistance 38 Mutual Legal Assistance Freezing and Confiscation 39 40 Other Forms of International Cooperation Transparency and Beneficial Ownership of Legal Persons Transparency and Beneficial Ownership of Legal Arrangements Regulation and Supervision of Financial Institutions Powers of Supervisors Regulation and Supervision of DNFPBs FIU Responsibilities of Law Enforcement & Investigative Authorities Powers of Law Enforcement & Investigative Authorities Cash Couriers Statistics Reporting of Suspicious Transactions Tipping Off and Confidentiality Sanctions International Instruments Extradition 20 PC PC LC C PC NC NC PC C PC PC PC C C PC PC PC PC NC LC LC NC PC PC PC LC LC PC C C LC LC PC LC PC PC LC C PC LC Ratings Upgraded in 2017 LC C PC PC LC C LC LC LC LC Ratings Upgraded in 2018 Current Rating as end 2018 LC C C C LC LC LC LC LC LC LC C C PC PC PC C LC C C C C C LC LC LC C LC LC LC LC PC PC LC LC LC C C LC LC PC LC LC LC LC C PC LC FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Agency Name of FIU Date South Africa Financial Intelligence Centre 11 July 2012 Sri Lanka Republic of China (Taiwan) Republic of Marshall Islands Russia Thailand United Kingdom Financial Intelligence Unit of Central Bank of Sri Lanka
 Anti-Money Laundering Division, Investigation Bureau, Ministry of Justice Banking Commission-Financial Intelligence Unit Federal Financial Monitoring Service (Russian Federation) The AML Office of the Kingdom of Thailand The Serious Organised Crime Agency United Kingdom FIU United States of America The Financial Crimes Enforcement Network Vanuatu Vanuatu FIU Source: Fiji FIU 21 July 2011 10 July 2012 24 July 2017 28 June 2013 25 October 2011 12 July 2011 5 June 2014 (Amendment) 12 July 2011 8 March 2013 Association of Pacific Island FIUs The Fiji FIU is a member of the Association of Pacific Island FIUs (APIFIU).
APIFIU was established in 2011 and currently has 12 FIUs as its members namely the FIUs of Cook Islands, Fiji, Nauru, Niue, Palau, Papua New Guinea, Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Vanuatu and Kiribati.

The FIU contributed to the activities of APIFIU and participated in its meeting during the year.

The FIU also provided advice during the year to regional FIUs on various aspects of Fiji’s AML/CFT framework.
Memorandum of Agreements with Foreign FIUs The FIU may enter into MOA with foreign FIUs or law enforcement agencies for the exchange of information relevant to the investigation or prosecution of a money laundering offence, terrorist financing offence or any other serious offence.

The FIU signed a MOA with the Papua New Guinea FIU.

The FIU has signed MOAs with 29 foreign FIUs to date.

During 2018, the FIU was also in discussion with a foreign FIU on the signing of MOA.

This will continue in 2019.
MOA with Foreign FIUs Agency Name of FIU Date Australia Australian Transactions Reports and Analysis Centre 19 May 2011 Bangladesh Financial Intelligence Unit 9 June 2015 Belgium Financial Intelligence Unit 3 September 2012 Brazil Council for Financial Activities Control 3 July 2013 Cambodia Cambodia FIU 5 December 2017 Canada Financial Transactions and Reports Analysis Centre of Canada 12 July 2011 Cook Islands Cook Islands FIU 21 July 2011 France The Unit for Intelligence Processing and Action Against Illicit Financial Networks 12 July 2011 India India FIU 5 June 2014 Indonesia Israel Japan Korea Lebanon Macau SAR China Malaysia Papua New Guinea Philippines Indonesian Financial Transaction Reports and Analysis Center Israel Money Laundering Prohibition Authority 10 July 2009 6 February 2013 Financial Intelligence Centre 9 June 2015 Korea FIU Special Investigation Commission 6 May 2011 5 June 2014 Financial Intelligence Office 6 and 13 March 2012 Unit Perisikan Kewangan, Bank Negara Malaysia 3 February 2010 Papua New Guinea FIU 29 January 2018 The Anti-Money Laundering Council, The Financial Intelligence Unit of the Republic of the Philippines 13 July 2011 Samoa Samoa FIU 8 March 2013 Solomon Islands Solomon Islands FIU 12 July 2011 21 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Asia Pacific Group on Money Laundering Fiji is a member of the APG, an autonomous and currently collaborative comprising 41 member countries.
international organisation The FIU, as the designated lead agency for Fiji, liaised closely with the APG during 2018 on various national outputs, APG governance and other policy and mutual evaluation matters including on the amendment of Fiji’s Public Order Act and submission of the 2nd Follow Up Report.

The Fijian delegation to the APG Annual Meeting 2018.
Back from left to right: Moira Konrote (ODPP); Francis Pulewai (FICAC); Avaneesh Raman (FIU); Kamni Naidu (Ministry of Justice); Aiyaz Ali (FPF); Makelesi Tunisau (FICAC); Shameem Khan (FRCS); Sophina Ali (Office of the Solicitor General).

Seated front: Razim Buksh (FIU) head of Fijian delegation During 2018, the FIU participated in the following key APG activities: Alliance for Financial Inclusion i. facilitated the technical assistance scoping visit by APG to Fiji from 29-31 May 2018; ii.
contributed to the discussions of the Governance Committee; iii.

contributed to the APG mutual evaluation program by reviewing the mutual evaluation reports of other APG members; iv.

attended the APG Annual Plenary Meeting held in Kathmandu, Nepal and v. participated in various APG surveys and contributed to discussion papers.

The FIU also prepared and submitted Fiji’s country report and technical assistance report for the 2018 APG Annual Plenary Meeting.
The FIU continued to liaise with the APG on various AML/CFT issues relevant to Fiji during the year.

The FIU is a member of the Alliance for Financial Inclusion (AFI) Global Standards Proportionality Working Group (GSPWG).
The aim of GSPWG is to provide a platform to facilitate peer learning on issues policymakers and regulators face in achieving a balance between financial inclusion, integrity and stability, and to examine the proportionate implementation of the global standards set by global standard setting bodies.

The FIU participated in the meeting of the GSPWG which was held in Cambodia during the year.

22 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Egmont Group FIU is a member of the Egmont Group of FIUs.
The FIU continued to participate in the activities of the Egmont Group during 2018.

This included contributing to Egmont surveys conducted during the year, reviewing and providing comments on Egmont governance papers, projects and questionnaires.

As a member of the Egmont Group of FIUs, the Fiji FIU is committed to sharing information with other Egmont Group members.

During 2018, the FIU continued to provide assistance and information to other Egmont Group members upon request via the ESW.
Information Exchanges with Other FIUs 2014-2018 Source: Egmont Group 2014 2015 2016 2017 2018 18 8 22 6 11 7 15 10 13 10 Number of requests made to Fiji FIU Number of requests made by Fiji FIU Source: Fiji FIU The FIU fully complies with the Egmont Group key governance instruments, namely the: 1.

Egmont Charter; 2.

Operational Guidance; 3.

Principles of Information Exchange; and 4.

Support and Compliance Process.
23 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 5 OPERATIONAL GOVERNANCE AND COMMUNICATION Month Course Venue Organiser October Fiji Institute of Bankers: Lawyers & Bankers 2-Day Workshop Suva, Fiji Fiji Institute of Bankers November 4th Annual Counter- Terrorism Financing Summit Bangkok, Thailand IT Scoping Attachment Attorney-General’s Conference December Source: Fiji FIU Sydney, Australia Sigatoka, Fiji AML Office, Thailand; AUSTRAC; Pusat Pelaporan Dan Analisis Transaksi Keuangan (PPATK) AUSTRAC Office of the Attorney-General Governance The FIU continued to provide monthly reports on its operations to the Governor of the RBF and the Chairman of the National AML Council.
The FIU also provided regular updates to the National AML Council on key AML/CFT national initiatives and projects.

Governance Structure 2018 Attorney General & Minister for Justice Governance Director Financial Intelligence Unit Functional Operations Governor Reserve Bank of Fiji Governance FIU Budget Advisory Board Reserve Bank of Fiji National AML Council Professional Development of Staff During the year FIU staff attended various workshops, technical forums and meetings.
The FIU also provided on-the-job training to new seconded staff from FRCS and the FPF who joined the FIU during the year as part of the secondment rotation program.
Trainings, Meetings and Conventions 2018 Month Course Venue Organiser Anti-Money Laundering Workshop, Suva, Fiji FICAC Level Two Threat Assessment Training Suva, Fiji Ministry of Defence and National Security; January Regional Workshop on Money Laundering and Terrorist Financing Risks in the Pacific Islands, Unexplained Wealth Workshop March Egmont Committee Meeting April Developing Protective Security Policy and Processes and Developing and Implementing an Information Classification System Fraud Prevention in the Workplace Workshop July APG Annual Plenary G7 24/7 Network of Contacts for International High-Tech Crime Workshop Fiji Chamber of Commerce & Industry Seminar Egmont Plenary August September Sydney, Australia ADB Suva, Fiji Buenos Aires, Argentina Suva, Fiji APG/Ministry of Justice Egmont Group Ministry of Defence and National Security Suva, Fiji FICAC Kathmandu, Nepal APG Melaka, Malaysia.
US Department of Justice Suva, Fiji Sydney, Australia Fiji Chamber of Commerce & Industry Egmont Group Department of Security Studies and Criminology, Macquarie University and Australian Department of Foreign Affairs and Trade 2nd Fiji-Australia Cybersecurity Dialogue Nadi, Fiji 24 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Communication The FIU uses the media and its website to communicate key AML/CFT initiatives to the general public.
In 2018, the FIU issued one press release (refer to Apendix 3).

The FIU alerted members of the public on the rise of email compromise and email spoofing in Fiji following an increase in the number of individuals and businesses falling victims to these types of scams.

The FIU also used media interviews to provide awareness to the public on AML/CFT issues and money laundering risks.
FIU Organisation Structure 2018 Staffing As at the end of 2018, the FIU had nine permanent staff and three officers on secondment from partner agencies (one FPF officer and two FRCS officers).

The FIU also engaged a temporary worker as part of the RBF’s and National Employment Centre attachment program.

In 2018, three temporary workers were engaged with the FIU on a short term attachment program.
Director FIU Policy & Compliance Division Intelligence Management Division IT Management Division Administration Manager Policy & Compliance Manager Intelligence Management Manager IT Management (vacant) Senior Secretary Policy & Compliance Analyst Intelligence Analyst (2) Intelligence Analyst.
Seconded from FRCS and FPF (3) Systems Analyst Senior Systems Analyst HR and Other Support (Provided by RBF) 25 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Funding and Expenditure The RBF continued to fund the operations of the FIU in 2018.

The FIU’s total expenditure for the period August 2017 to July 2018 was $825,712.

The expenditure of the FIU is incorporated into the financial statements of the RBF and is audited as part of its annual accounts.
FIU Funding and Expenditure 2014 2015 2016 (Jan- July)6 Aug 2016- Jul 2017 Aug 2017-Jul 2018 $710,780 $724,532 $492,089 $791,122 $825,712 $16,852 $45,854 - - - Operating Expenditure7 Capital Expenditure TOTAL $727,632 $770,386 $492,089 $791,122 $825,712 Source: RBF The RBF also provided other administrative support services to the FIU in 2018 in the areas of human information resource management, technology services, security services and other general administrative services.
accounting, Other Assistance Provided to the FIU The FIU received indirect funding assistance from FRCS and the FPF through the secondment of their staff with the FIU in 2018.

The salaries of the seconded officers were fully funded by their respective agencies.

In 2018, the FIU also received assistance from various organisations to fund staff attendance at technical AML/CFT trainings, conventions and meetings.

These included the APG, AFI, AUSTRAC and the Asian Development Bank.
Fiji FIU’s Information Management System Online Financial the FIU information management system online (FFIMSO) institutions continued to use to report electronically to the FIU on-line.

their transactions (STR; CTR; EFTR) As at the end of 2018, 127 financial institutions had registered on FFIMSO.
FFIMSO Registration Sector No of Reporting Entities Registered for Online Reporting to the FIU Commercial Banks Foreign Exchange Dealers & Money Remitters Mobile Phone Money Remitters Finance Companies Law Firms Insurance & Superannuation Accounting Firms Securities and Brokers Real Estates Money Lenders Others TOTAL 6 10 2 11 47 11 10 3 16 1 10 127 FFIMSO received an average of 193,962 financial transaction reports per month in 2018.
As at the end of 2018, the FFIMSO database had received over 14 million financial transaction reports from financial institutions since on-line reporting commenced in 2008.

As at end of 2018, there were 192 authorised users of FFIMSO.

FFIMSO’s reporting web application was accessed by 122 AML Compliance officers, 8,507 times during 2018.

FFIMSO’s analysis web application was accessed by 15 FIU officers, 1,954 times and 22 direct database access officers, 168 times during 2018.
6 Change in the RBF end of financial year from December to July.

7 The Reserve Bank provides additional financial support for the FIU in the terms of office space and overhead costs.

26 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 6 NATIONAL AML COUNCIL The National AML Council is established under Section 35 of the FTR Act and is Fiji’s national AML/CFT coordination committee.
The vision of the National AML Council is “an effective and efficient legal system and institutions to prevent and detect money laundering, terrorist financing and other serious financial crimes in Fiji.” v. Chief Executive Officer of the FRCS; and vi.

Director of the FIU.

The Council may invite other persons to attend the Council meetings.

There are five invited members of the Council.


These are: • Director, Immigration Department; The Council’s missions are to: • Permanent Secretary, Ministry of Economy; i. provide sound and timely advice to the Minister and other relevant stakeholders on the prevention of money laundering and terrorism financing; • Permanent Secretary, Ministry of Defence, National Security and Immigration; • Permanent Secretary, Ministry of Foreign Affairs; ii.
promote a strong legal and institutional AML/CFT and framework; and iii.

facilitate networking and cooperation amongst • Deputy Commissioner, FICAC.

relevant stakeholders.

The FIU is the secretariat to the Council.

The Council seeks to achieve these missions by: NATIONAL AML COUNCIL MEMBERS 2018 NATIONAL AML COUNCIL INVITED MEMBERS 2018 i. providing sound and timely advice to the Minister and other government agencies on policy and regulatory AML/CFT matters; ii.
promoting a strong legal, policy and institutional framework to comply with international AML/CFT standards and best practices; iii.

supporting institutions in their efforts to combat money laundering and terrorist financing; iv.

encouraging and facilitating networking and cooperation between agencies; and v. providing advice to the FIU on AML/CFT issues.

The members of the National AML Council are: i.

Permanent Secretary for the Ministry for Justice, as Chairperson; ii.
Director of Public Prosecutions; iii.

Commissioner of Police; iv.
Governor of the RBF; Sharvada Sharma Solicitor-General and Acting Permanent Secretary for Justice Ariff Ali Governor Reserve Bank of Fiji Visvanath Das Chief Executive Officer Fiji Revenue and Customs Service Christopher Pryde Director Office of the Director of Public Prosecutions Sitiveni Qiliho Commissioner Fiji Police Force Razim Buksh Director Financial Intelligence Unit Manasa Lesuma Permanent Secretary Ministry of Defence and National Security Makereta Konrote Permanent Secretary Ministry of Economy Ioane Naivalurua Permanent Secretary Ministry of Foreign Affairs Nemani Vuniwaqa Director Immigration Department Rashmi Aslam Acting Deputy Commissioner Fiji Independent Commission Against Corruption 27 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 The functions of the Council are provided for in section 35(5) of the FTR Act and are: 1.
2.

3.
4. to advise the FIU and the Minister on any matters relating to the prevention of money laundering or the financing of terrorism; to make recommendations to the Unit and the Minister on any matter relating to the prevention of money laundering or the financing of terrorism; to assist the FIU and the Minister in the formulation of policies or strategies relating to the prevention of money laundering or the financing of terrorism and to assist the FIU in coordination between various Government departments and with statutory corporations.
Council Working Groups The National AML Council is supported in its work by three working groups, namely: i.

Legal Working Group; ii.

Supervisors and Regulators Working Group; and iii.

Law Enforcement Working Group.

The terms of reference of each Working Group is determined by the Council.

The Working Groups provide updates at the National AML Council meetings on its achievements.
AML Legal Working Groups AML Supervisors & Regulators Working Group AML Law Enforcement Working Group • To facilitate the review of relevant legislations to ensure that Fiji has an effective and globally acceptable legislative framework for combating money laundering and other related offenses.

• To facilitate the ratification of relevant international conventions.

• To administer the forfeiture asset fund.

• To facilitate matters relating to international assistance and extradition.
• To facilitate networking amongst law enforcement agencies to enable: a) better sharing of information amongst agencies; b)the effective investigation and prosecution of money laundering and other related financial offenses; and • To facilitate networking and sharing of information amongst regulators regarding the supervision of financial institutions for compliance with the FTR Act.

• To conduct joint AML compliance programs.


• To advise the Council c) sharing of technical on financial institutions compliance with legislative AML requirements.

expertise and resources • To advise the Council on issues relating to investigation and prosecution of money laundering and other related offenses.

The members of the Working Groups are representatives from relevant agencies who contribute towards Fiji’s AML/CFT initiatives.
The chairpersons of the Working Groups are elected by the members of the Working Group.

The FIU is a member and provides the secretariat of the three Working Groups.
National AML Council and Working Groups National AML Council Secretariat-FIU AML Legal Working Group AML Supervisors & Regulators Working Group AML Law Enforcement Working Group ODPP (Chairperson) Fiji Police Force Ministry of Justice Ministry of Economy Ministry of Foreign Affairs Office of the Solicitor-General FIU (member/ secretariat) RBF (Chairperson) FIU (member secretariat) FICAC (Chairperson) Fiji Police Force FRCS ODPP FIU Immigration Department Investment Fiji Fiji Transnational Crime Unit Ministry of Defence Council’s Activities in 2018 Key outputs driven by the National AML Council in 2018 were as follows: i. ii.
submission of Fiji’s second progress report to the APG on 31 January 2018.

The report outlined measures Fiji had taken since 2016 to implement the recommendations of the mutual evaluation report.

the Council endorsed the national strategy for the implementation of the recommendations of the APG as outlined in Fiji’s mutual evaluation report.

28 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 iii.
the Council proposed for the review of the Companies Act (addressing companies’ beneficial the mutual ownership deficiencies noted evaluation report) and Charitable Trust Act (addressing regulation of non profit organisations).

The Council further tasked the AML Legal Working Group to look at how to address the remaining legal gaps in the mutual evaluation report.

in iv.

v. facilitated the technical assistance scoping visit by APG to Fiji.
representatives of the Council attended the APG annual plenary meeting held in Nepal.

vi.

supported Fiji’s capacity building and skills enhancement opportunities by participating in the following programs: • • 2018 Joint EAG/APG Typologies Workshop; IMF/STI workshop Transparency.

on Enhancing Entity viii.

ongoing support and contribution to APG work, namely, Fiji’s contribution to the APG mutual evaluation programme, APG mandate paper and other governance issues.
Number of Working Group Meetings 2014-2018 Working Group Legal Working Law Enforcement Supervisors and Regulators Source: Fiji FIU 2014 2015 2016 2017 2018 7 4 5 2 1 1 Ad-hoc meeting Ad-hoc meeting Ad-hoc meeting 1 2 1 2 3 1 Key outputs for the Working Groups were: • reviewed strategies to address gaps in Fiji’s mutual transparency of relating evaluation companies’ beneficial owners and extradition; report to • contributed to the compilation of Fiji’s progress report vii.
oversight over the process for the reappointment of to the APG.

the Director FIU 29 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 7 APPENDICES APPENDIX 1: GUIDELINES ISSUED BY THE FIU Guideline Reference Title Date Issued Purpose of Guideline Guideline 1 Suspicious Transactions 26 October 2007 To provide guidance on how to identify suspicious transactions and report these suspicious transactions.
Guideline 2 Reporting a Suspicious Transaction by Paper 26 October 2007 To provide guidance to financial institutions on how to complete a “suspicious transaction report” form.
Guideline 3 Reporting Cash Transactions of $10,000 or above by Paper 22 May 2009 To provide guidance to financial institutions on how to report cash transactions of $10,000 and above using the paper report forms Guideline 4 Customer Identification and Verification 20 August 2009 To explain the customer identification and verification requirements of the FTR Act and Regulations and provide practical guidance on how to apply these customer verification requirements.
Guideline 5 Risk Assessment of New Products, New Business Practices and Technologies 31 January 2018 Requires financial institutions identify and assess the money laundering, terrorist financing and proliferation financing risks that may arise in relation to the development of new products and new business practices, including new delivery mechanisms.
Guideline 6 Dealing with Higher Risk Countries 31 January 2018 Outlines further requirements relating to dealing with higher risk countries and countries that have been identified as having inadequate systems in place to detect or prevent money laundering, terrorist financing and proliferation financing risks emanating from these countries.
Guideline 7 Politically Exposed Persons 27 March 2018 Outlines requirements for dealing with domestic politically exposed persons and international organisation politically exposed persons.
AML/CFT Guidelines Issued by the RBF Minimum Requirements for Licensed Financial Institutions for the Management of Money Laundering and Terrorist Financing Risk November 2014 The Policy sets out the minimum requirements on establishing a risk management framework comprising of systems, structures, processes and people within which licensed financial institutions identifies, assesses, mitigates and monitors money laundering and terrorist financing risk.
Minimum Requirements for the Management of Money Laundering and Terrorist Financing Risk October 2018 The Policy sets out the minimum requirements for foreign exchange dealers and money changers in establishing a risk management framework comprising of systems, structures, processes and people within which a licensed entity identifies, assesses, mitigates and monitors money laundering and terrorist financing risk.
Minimum Requirements for the Management of Money Laundering and Terrorist Financing Risk November 2018 The Policy sets out minimum requirements for insurance companies and brokers on establishing a risk management framework, comprising of systems, structures, processes and people within which the institution identifies, assesses, mitigates and monitors money laundering and terrorist financing risk.

Banking Supervision Policy No.
6 Restricted Foreign Exchange Dealers and Money Changers Supervision Policy Statement No: 4 Insurance Supervision Policy Statement No:13 Source: Fiji FIU and RBF 30 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 APPENDIX 2: POLICY ADVISORIES ISSUED BY FIU Reference Subject Purpose of Advisory Issue Date 1/2007 2/2007 3/2007 4/2007 Customer Due Diligence of Existing Customers’ Accounts To explain how and when due diligence is to be applied to existing customers of financial institutions 15 March 2007 Customer Due Diligence of Customers Who Have Insufficient or No Official Identification Documents Identification and Verification of a Customer’s Signature Identification and Verification of Occasional Customers To provide further guidance on how due diligence is to be applied to new customers who have insufficient or no official identification documents 11 April 2007 To provide further guidance on how to identify and verify a customer’s signature 26 April 2007 To provide further guidance on how to identify and verify occasional customers 14 June 2007 5/2007 Risk Based Approach To provide guidance on how to apply the FTR Act and Regulations on a risk based approach 22 June 2007 6/2007 Application of Exemption Provisions for Reporting of Cash Transactions To provide guidance on how to apply the exemption provisions relating to cash transaction reporting requirements 9 July 2007 7/2007 Record Keeping To provide further guidance on the record keeping requirements of the FTR Act 11 July 2007 1/2008 2/2008 1/2010 2/2010 Identification and Verification of Customers of Insurance Providers To provide further guidance to insurance companies, brokers and agents on their obligations to identify and verify their customers’ identity.
23 January 2008 Identification and Verification of Clients and Beneficiaries of Employer Funded Group Life Insurance Policies To provide guidance on how insurance companies and intermediaries can apply the identification requirements to clients of employer funded group life insurance policies.

24 November 2008 Identification and Verification of a Customer's Signature To provide guidance on how to identify and verify a customer’s signature.
This Advisory supersedes and replaces Policy Advisory 3/2007 of 26 April 2007.

11 August 2010 Use of Referee Letter to Verify a Customer's Identity 3/2010 Refugee Identity Card 4/2010 Identification of Customers of Telephone Financial Services Pursuant to Section 4(4)(a )of the FTR Act, to allow financial institutions to rely solely on a letter from a suitable referee to verify a low risk customer who does not have or is unable to provide any formal identification documents.
To advise financial institutions of the identification documents pertaining to customers who have been granted Asylum Seeker and Refugee status by the Fiji Government.

To provide guidance to telephone service providers that provide financial services to customers on the customer identification requirements under the FTR Act and how it relates to the Decree on Compulsory Registration of Customers for Telephone Services (2010).
27 August 2010 17 September 2010 17 September 2010 1/2012 Subsequent Reporting of Suspicious Transactions To provide clarification on the need for continuous reporting of customers who have been previously reported to the FIU as engaging in suspicious transactions 28 March 2012 2/2012 Voter Identification Card 1/2013 FNPF/FRCS Joint Identification Card To advise financial institutions of the inclusion of the Fiji Voter Identification Card for identification and verification of certain customers and clients.
22 August 2012 To advise financial institutions of the inclusion of the FNPF/FRCS Joint Identification card for identification and verification of their customers and clients.

15 November 2013 1/2018 Parenthood Assistance Payment Programme To provide clarification on the application of CDD requirements on bank account opening for recipients of the Parenthood Assistance Payment Programme.
8 August 2018 2/2018 Change in Account Name for Existing Private Companies Source: Fiji FIU To provide clarification on the customer due diligence (CDD) requirements under the Financial Transactions Reporting (FTR) Act and how it aligns to the requirements under the Companies Act on changes to names of existing Private Companies.

23 November 2018 31 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 APPENDIX 3: FIU PRESS RELEASE 2018 PRESS RELEASE Press Release No.
: 10/2018 Date: 14 June 2018 FIU Telephone: (679) 331 3611/322 3333 FIU Facsimile: (679) 330 2094/331 6454 Email: info@rbf.gov.fj or info@fijifiu.gov.fj FRCS Telephone: (679) 324 3000 FRCS Facsimile : (679) 331 5537 AGENCIES STRENGTHEN TAX COMPLIANCE The Chief Executive Officer of Fiji Revenue & Customs Service (FRCS), Mr Visvanath Das and the Director of Fiji Financial Intelligence Unit (FIU) Mr Razim Buksh met this week and discussed opportunities to further strengthen tax and customs compliance and fraud investigations.
They discussed the need for stronger collaboration and networking between the two agencies in relation to profiling of suspected tax evaders, investigation of trade-based money laundering involving incorrect declaration of the value of goods, and related financial crimes.
Mr Buksh said that in 2017, the FIU issued 317 intelligence case dissemination reports involving $220 million to the FRCS for suspected tax crimes (tax evasion, duty evasions, and customs related violations), money laundering activities and other fraudulent and financial crimes.

Mr Buksh further said that FRCS was the largest beneficiary of FIU’s intelligence representing more than 70 percent of its proactive “whistle-blower” reports.
In 2017, FIU information was used by FRCS to investigate an additional 1,279 individuals and businesses involved in tax and customs violation cases.

Mr Visvanath Das said that FIU referral reports play an important role in uncovering fraudulent acts where businesses are not paying its fair share taxes.

The various disseminated reports from FIU are analysed and further referred to the respective teams for a full Audit and Investigation to commence.
In 2017, total tax and penalties assessed as a result of the various FIU referrals amounts to $6.6 million whereby 21 percent of it were assessed to businesses dealing in the wholesale and retail of Motor Vehicles.

Mr Das said that FRCS and the FIU have built a strong partnership on information exchange and capacity building.

Currently two FRCS officers are based with the FIU on a fulltime secondment.
Both agencies have acknowledged that while the overall culture of tax compliance in Fiji is improving, authorities will come down hard on dishonest individuals and businesses that violate their tax obligations.
RESERVE BANK OF FIJI 32 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 8 SELECTED KEY STATISTICS 2014-2018 SELECTED KEY STATISTICS 2014-2018 Year 2014 2015 2016 2017 2018 Suspicious Transaction Reports 383 516 579 650 632 Transaction and Currency Reports Received by FIU Cash Transaction Reports 1,042,074 579,849 591,636 623,213 968,693 Electronic Fund Transfer Transaction Reports 1,308,633 1,029,993 1,148,711 1,220,602 1,357,246 Border Currency Reports 557 491 547 792 969 Year 2014 2015 2016 2017 2018 Case Dissemination Reports Intelligence and Information Reports to Stakeholders Information Dissemination Reports Notices to Financial Institutions Due Diligence Reports Alert Notices Directives 241 123 20 7 5 255 191 27 7 11 195 210 41 14 1 448 205 75 10 1 321 260 118 15 2 Year 2014 2015 2016 2017 2018 Number of employees of Financial Institution Education and Awareness Number of Financial Institutions Employees of Law Enforcement Agencies Source: Fiji FIU 147 6 123 270 320 202 376 3 84 6 67 8 80 5 65 33 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 SELECTED KEY EVENTS 20189 JANUARY 29 31 FEBRUARY 27 MARCH 12-15 15 19 20 22 APRIL 17 20 24 24-27 25 MAY 2 9 11 JUNE 14 18 19 JULY 21-27 AUGUST 22 30 SEPTEMBER 4 18 24-27 OCTOBER 23 DECEMBER 4 10-12 Signed a MOA for information exchange with the Papua New Guinea FIU Fiji’s Follow Up Report to APG Unexplained Wealth Taskforce Meeting Egmont Committee Meeting, Argentina AML Law Enforcement Working Group Meeting AML Compliance Officers Forum (Banks and Finance Companies) AML Compliance Officers Forum (Foreign Exchange Dealers) Unexplained Wealth Taskforce Meeting AML Compliance Officers Forum (Real Estate Agents) Parliament passed the FTR Amendment Act AML Legal Working Group Meeting AFI Global Standards Proportionality Working Group Meeting, Cambodia AML Law Enforcement Working Group Meeting Meeting of the National AML Council Unexplained Wealth Taskforce Meeting Effective date for the FTR Amendment Act 2018 FIU Press Release-Agencies Strengthen Tax Compliance
 Meeting with AML Compliance Officers (Banks) AML Legal Working Group Meeting APG Annual Meeting and Forum on Technical Assistance and Training, Nepal Vika Sadrau convicted of money laundering offence AML Law Enforcement Working Group Meeting Rahul Naidu, Avenai Danford and Rimakshni Ranigal convicted of money laundering offenses Rosheen Raj and Rine Sorby convicted of money laundering offences Egmont Group Plenary Meeting, Australia AML Compliance Officers Forum (Foreign Exchange Dealers) AML Compliance Officers Forum (Insurance Companies and Brokers) FIU IT Attachment to AUSTRAC, Australia 34 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 STRATEGIC ANALYSIS REPORT 2018 35 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 STRATEGIC ANALYSIS REPORT 2018 FIJI FINANCIAL INTELLIGENCE UNIT 1.
STRATEGIC ANALYSIS OVERVIEW 2.

OUTCOMES - SUMMARY 3.

SUSPICIOUS TRANSACTION REPORTS 4.

CASH TRANSACTION REPORTS 5.

ELECTRONIC FUNDS TRANSFER REPORTS 6.

BORDER CURRENCY REPORTS 7.

CONTINUING AND DECLINING MONEY LAUNDERING TRENDS 8.

CASE STUDIES 9.

GLOSSARY 37 39 40 46 48 50 56 57 64 36 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 STRATEGIC ANALYSIS OVERVIEW 1 Overview The Fiji FIU undertakes detailed analysis of financial transaction information and converts it into meaningful outputs.
This is called Strategic Analysis.

This Report provides the key outcomes of Strategic Analysis on the various categories of reports that the FIU receives as well as a summary of the trends and case studies identified in 2018.

FIU analysis should add value to the information received and held by the FIU.
While all the information should be considered, the analysis may focus either on each single disclosure received or on appropriate selected information, depending on the type and volume of the disclosure received, and on the expected use after dissemination.

FIUs should be encouraged to use analytical software to process information more efficiently and assist in establishing relevant links.

However, such tools cannot fully replace the human judgement element of analysis.
FIUs should conduct the following types of analysis: • Operational analysis uses available and obtainable information to identify specific targets (e.g.

persons, assets, criminal networks and associations), to follow the trail of particular activities or transactions, and to determine links between those targets and possible Strategic analysis outcomes enable the FIU and its stakeholders to understand the patterns and trends on money laundering and related issues.
It also enables the FIU to draw conclusions for the strategic prevention of money laundering and the financing of terrorism in Fiji, to provide input for policy formulation and for setting operational priorities.

Strategic Analysis also assists the FIU to develop knowledge (strategic intelligence) relating to money laundering, the financing of terrorism and other threats to the security of Fiji’s financial systems.

proceeds of crime, money laundering, predicate offences or terrorist financing.
• Strategic analysis uses available and obtainable information, including data that may be provided by other competent authorities, to identify money laundering and terrorist financing related trends and patterns.

This information is then also used by the FIU or other state entities in order to determine terrorist money financing and vulnerabilities.

Strategic analysis may also help establish policies and goals for the FIU, or more broadly for other entities within the AML/ CFT regime.
laundering and threats related Source: FATF Recommendation 29, Interpretive Note Paragraph 3 Strategic analysis aims to decipher the underlying patterns and trends that would enable an FIU to draw conclusions for the strategic prevention of money laundering and the financing of terrorism, and to provide input for policy formulation and for setting operational priorities.
In FIU context, this implies developing knowledge (strategic intelligence) as it relates to money laundering, the financing of terrorism and other threats to the security of a country’s financial systems.
Some components of strategic analysis include: • • • • examining data for patterns and similar concepts; developing a working hypothesis that addresses the “who”, “what”, “when”, “where”, “how”, and “why” of the activity; collecting, evaluating information as required; and collating further identifying connections or links between pieces of information, also used to support an inference; 37 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 • • developing inferences (an inference is the best estimate of the truth that can be drawn from facts, opinions or other inferences); and constructing the argument, that is the logical flow of elements leading to the inference.
The sophistication of Strategic Analysis may vary based on the capacity and resources of the FIU.

Product ranges of Strategic Analysis may include: • Typologies and trends - this is a systematic classification of a number of schemes that appear to be constructed in a similar fashion.

These are built on a series of indicators that show how money was laundered, which in turn increases general understanding of an issue or method of money laundering or the financing of terrorism.
When a typology occurs for any given event over a period of time, this can be classed as a trend.

Changes in crime types or the way in which money is moved are examples of trends.

• Patterns - this is a recurring characteristic or trait that helps in the identification of a phenomenon/ problem and that serves as an indicator or model for predicting future behaviour.
• Synthesis - This includes identifying connections that identify break-through ideas and opportunities in the detection of money laundering or the financing of terrorism.

• Geographical/regional analysis - This shows the area of influence or location of the phenomenon.

• Behavioural analysis - This shows the type of operations, institutions and products used by the group.

• Activity analysis - This focuses on identifying weaknesses of an economic sector or activity.
• Advanced intelligence products - These may include vulnerability assessments, risk assessments and significant event assessments.
Source: Egmont Group of Financial Intelligence Units Operational Guidance for FIU Activities and the Exchange of Information 38 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 2 OUTCOMES SUMMARY Suspicious Transaction Reports In 2018, majority of the suspicious transaction reports (STR) continued to be reported by commercial banks followed by the money remittance service providers (MRSPs).

The number of STRs reported by the finance companies increased fourfold in 2018 compared to 2017.
The total value of suspicious transactions that were reported in 2018 increased to $78.8 million from $49.1 million in 2017.

Majority of the STRs were reported on the grounds of advanced fee fraud8 followed by tax evasion.

Approximately 80 percent of the STRs submitted by financial institutions in 2018 were reported on transactions valued below $50,000, out of which 43 percent of STRs were on transactions valued below $5,000.
‘Cash’ continued to be the primary financial instrument type that is reflected in the STRs reported to the FIU.

The majority, 75 percent of the STRs reported in 2018 involved Fijian currency.

There were 529 (84 percent) STRs reported on transactions conducted by individuals/personal customers.

54 percent of STRs on individuals were reported on customers over the age of 40 years.
Majority of the STRs continue to be received from financial institutions based in the Central/ Eastern Division due to concentration of economic and commercial activities in this division.

Cash Transaction Reports The FIU received 968,693 CTRs in 2018 or an average of around 80,724 CTRs per month.

The majority (99 percent) of the CTRs received during 2018 were reported by commercial banks.

The majority (43 percent) of CTRs were for cash transactions between $10,001 and $20,000.
Electronic Funds Transfer Reports The FIU received 1,357,246 EFTRs in 2018 or an average of around 113,104 EFTRs per month.

Majority (71 percent) of EFTRs were received from the money involve remittance service providers.

EFTRs may remittances into Fiji (inward) or remittances out of Fiji (outward).

Majority (78 percent) of EFTRs received during 2018 were inward remittance transactions.

There is no monetary threshold for EFTRs.


Border currency Reports In 2018, 969 BCR were submitted to the FIU compared to 792 BCRs in 2017.

There were more declarations made by outbound travellers compared to inbound travellers in 2018.

The total value of currency declared by travellers in the BCRs in 2018 was $62.7 million compared to $49.9 million in 2017.
8 Advance fee fraud is a type of scam that requires businesses and individuals to pay a fee before receiving the falsely promised money, products, or services.

It includes romance, lottery, employment, and investment scams.

39 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 3 OUTCOMES - SUSPICIOUS TRANSACTION REPORTS Reporting Financial Institutions STRs were reported to the FIU by various financial institutions including members of the public.
The majority of the STRs continue to be reported by commercial banks (2018: 62 percent; 2017: 63 percent) followed by the money remittance service providers (2018: 29 percent; 2017: 23 percent).

Summary of Reporting Financial Institutions 2014-2018 Financial Institutions and Persons Reporting No.

of STRs Received 2014 2015 2016 2017 2018 Commercial Banks 267 397 367 407 391 No.
of STRs 450 400 350 300 250 200 150 100 50 0 166 149 183 2014 2015 Summary of Reporting Financial Institutions Banks Other Financial Institutions Banks to Total Number of STRs Money Remittance Service Providers to Total Number of STRs % Change 90 80 70 60 50 40 30 20 10 0 2016 Years 2017 2018 Source: Fiji FIU Money Remittance Service Providers Finance Companies Members of the Public Regulatory Authorities Law Firms Accounting Firms Insurance Companies and Superannuation Securities, Unit Trusts Real Estate Businesses Others2 TOTAL Source: Fiji FIU Value of Transactions Reported as Suspicious The total value of suspicious transactions that were reported in 2018 increased to $78.8 million from $49.1 million in 2017.
There has been an increase in the number of high value suspicious transactions reported to the FIU in 2018 and a decrease in the number of low value suspicious transactions reported in the same period.

The average value of a transaction reported in 2018 as suspicious was $124,672 compared to $75,503 in 2017.

383 516 579 650 632 Total Value of Transactions Reported as Suspicious 2014-2018 The STRs reported by the money remittance service providers increased by 23 percent in 2018.
There was also an increase in the number of STRs reported by finance companies.
2014 2015 2016 2017 2018 69.4 82.7 74.7 49.1 78.8 383 516 579 650 632 181,205 160,373 128,968 75,503 124,672 Total Value ($ million) Number of STRs Average Value reported ($ per STR) Source: Fiji FIU 40 2 “Others” include STRs filed by foreign FIU’s FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 “Grounds for Suspicion” in Suspicious Transaction Reports In 2018, majority of the STRs were reported on the grounds of advance fee fraud and other scams.
Suspected tax evasion and fraud were also prevalent contributing to approximately 26.4 percent of the total STRs reported to the FIU in 2018.

Reporting financial institutions also clearly highlighted suspicious behaviour and unusual account activity as common grounds of suspicion detected and reported by financial institutions in 2018.

Total Value of Transactions Reported as Suspicious $m 100 80 60 40 20 0 No.
of STRs Number of STRs Total Value of STR 700 600 500 400 300 200 100 0 2014 2015 2016 Years 2017 2018 Source: Fiji FIU Grounds for Suspicion on STRs Received 2018 Grounds for Suspicion Advanced Fee Fraud & other scams Tax Evasion Fraud or other serious offence Suspicious behaviour Unusual account activity Inconsistent with customer profile Unusually large cash transaction Other (one-off large transaction etc) Avoiding reporting obligations Unusually large transfer Violation of EC requirements Unusual use/exchange of cash Counterfeit financial instruments Possible unexplained wealth Third party transaction Use of minors account Unusually large foreign exchange FIU/Other Watchlist 0 10 20 30 40 50 60 70 80 90 100 Number of STRs Source: Fiji FIU 41 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Suspicious Transactions by Transaction Value There is no monetary threshold under the FTR Act for reporting suspicious transactions.
Thus, any suspicious transaction must be reported to the FIU regardless of the amount involved in the transaction, including the reporting of attempted transactions.

Previous trends indicate that suspicious transactions do not always involve substantial dollar amounts.

The majority (71 percent) of the STRs submitted by financial institutions in 2018 were reported on transactions valued below $20,000, out of which 43 percent of STRs were on transactions valued below $5,000.
STRs involving large value transactions of $0.5 million and more accounted for 5 percent of total STRs reported in 2018 compared to 2 percent in 2017.

Suspicious Transactions by Transaction Value 2018 4% 2% 9% 5% 10% 14% 43% Source: Fiji FIU Suspicious Transactions by Instrument Type ‘Cash’ continued to be the primary financial instrument type that is reflected in the STRs reported to the FIU in 2018.

Out of the 632 transactions reported as suspicious in 2018, 343 (54 percent) involved cash transactions.
The types of financial instruments involved in STRs include: 1.

Cash (local and foreign currency); 2.

Cheque (bank cheques/drafts, personal and company cheques); 3.

Remittances; and 4.

Other instruments (account-to-account transfers, credit cards and travellers cheques).
Suspicious Transactions by Instrument Type 2014-2018 Year 2014 2015 2016 2017 2018 Cash Cheque Remittances Others Total 216 285 398 409 343 31 55 40 67 62 82 125 93 113 186 54 51 48 61 41 383 516 579 650 632 Suspicious Transactions by Instrument Type 2014-2018 Cash Cheque Remittances Others No.
of STRs 450 400 350 300 250 200 150 100 50 0 398 409 343 186 285 216 125 113 82 31 54 55 51 2014 2015 93 40 48 2016 Years 67 61 62 41 2017 2018 Source: Fiji FIU 13% $0-$5,000.00 $5,000.01-$10,000.00 $10,000.01-$20,000.00 $20,000.01-$50,000.00 $50,000.01-$100,000.00 $100,000.01-$500,000.00 $500,000.01-$2,000,000.00 $2,000,000.01 & above Source: Fiji FIU Suspicious Transactions by Transaction Value Transaction Value Number of STRs Percentage of STRs $0 - $5,000.00 $5,000.01 - $10,000.00 $10,000.01 - $20,000.00 $20,000.01 - $50,000.00 $50,000.01 - $100,000.00 $100,000.01 - $500,000.00 $500,000.01 - $2,000,000.00 $2,000,000.01 & above Total Source: Fiji FIU 270 82 88 65 32 59 27 9 632 43 13 14 10 5 9 4 2 100 42 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Suspicious Transactions by Currency Type The majority (75 percent) of the STRs reported in 2018 involved Fijian currency.
The suspicious transactions that involved foreign currency increased to 25 percent of total STRs in 2018 compared to 21 percent in 2017.

Suspicious Transaction Reports by Customer Age 53 percent of STRs on individuals were reported on customers between the age of 26 and 46 years.

Age not stated decreased from 38 in 2017 to 22 in 2018 because of an increase in the quality of reports.
Suspicious Transactions by Currency Type 2014-2018 Fijian Currency Fijian Currency % Change Foreign Currency Foreign Currency % Change No.
of STRs 600 500 400 300 200 100 0 315 68 % Change 100 515 472 384 358 185 132 133 160 80 60 40 20 0 Suspicious Transaction Reports by Customer Age 33yrs Year 2yrs - 39yrs 37 40yrs - 46yrs 41 19yrs - 25yrs 15 55yrs and over 45 26yrs - 32yrs 45 47yrs - 54yrs 42 – 18yrs 5 2014 Not Stated9 TOTAL Source: Fiji FIU 80 11 76 38 20 310 411 496 534 529 Suspicious Transaction Reports by Customer Age 2018 2014 2015 2016 2017 2018 Years Source: Fiji FIU 95, 18% 79, 15% Suspicious Transaction Reports by Customer Type There were 529 (84 percent) STRs reported on transactions conducted by individuals/personal customers and 103 (16 percent) by corporate and business entities in 2018.
The proportion of STRs reported in 2018 on legal entities and individuals remain relatively constant.

It was also noted that some of the transactions reported on individuals were indirectly linked to legal entities such as companies and sole proprietorships.
Suspicious Transaction Reports by Customer Type Individual Legal Entities 105, 20% 81, 15% 2 yrs - 18 yrs 33 yrs - 39 yrs 55 yrs and over 19 yrs - 25 yrs 40 yrs - 46 yrs Not Stated 92, 17% 20, 4% 12, 2% 45, 91% 26 yrs - 32 yrs 47 yrs - 54 yrs Source: Fiji FIU No.

of STRs 600 500 400 300 200 100 0 310 73 2014 447 69 2015 503 542 529 69 2016 Years 108 2017 103 2018 Source: Fiji FIU 9 Date of birth is not usually provided in STRs where the person reported is a beneficiary of advance fee fraud.
43 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Age of Convicted Money Launderers Analysis of money laundering and proceeds of crime conviction cases showed the following in relation to the age bracket of the persons involved.
Age of Convicted Money Launderers Name of Individual Other ML Investigations Age at the time of the offence Sakiusa Vakarewa Josefa Saqanavere Savenaca Batibawa Katarine Gounden Fiu 31 years old 41 years old 47 years old 31 years old Name of Individual Year STR was Reported Age at the time of the offence Year Convicted Name of Individual Other ML Investigations Age at the time of the offence 2016 2016 2016 2016 2018 2018 2018 2018 2018 2018 Vika Sadrau Rahul Rajan Naidu Avenai Danford Rimakshni Ranigal Rosheen Praveena Raj Rine Munivai Sorby Source: Fiji FIU 34 years old 28 years old 29 years old 30 years old 42 years old 54 years old Suspicious Transaction Reports by Geographical Location of Reporting Institutions The FIU receives STRs from various commercial centres in Fiji.
Majority of the STRs continue to be received in the Central/ institutions based from financial Eastern Division due to concentration of economic and commercial activities in this division.

In 2018, STRs from the Northern Division increased to 68 from 41 STRs received in 2017.

Most of these STRs were reported on farmers engaged in primary produce and the ground of suspicion identified was possible tax evasion.
Suspicious Transaction Reports by Geographical Location of Reporting Institutions 2014-2018 Western Central/Eastern Northern No.
of STRs 400 350 300 250 200 150 100 50 0 286 273 287 352 349 245 213 223 202 131 29 28 2014 2015 17 2016 Years 41 68 2017 2018 Source: Fiji FIU Manoj Khera Timothy Aaron O’Keefe Monika Arora Salendra Sen Sinha Anand Kumar Prasad Deo Narayan Singh Atisma Kirti Singh Johnny Albert Stephen Doreen Singh Kapil Kushant Samy Nitesh Kumar Nirmala Devi Natasha Nilma Singh Vikash Mehta Tuimoala Raogo Fazeel Razid Ali Manjeet Singh Rajneel Chaudary Preetika Anuwesh Lata Prashil Prakash 2004 2005 2007 2008 2008 2008 2008 2009 2009 2010 2016 2011 2012 2013 2013 2015 2014 2014 2014 2012 31 years old 25 years old 28 years old 30 years old 28 years old 40 years old 23 years old 39 years old 31 years old 24 years old 23 years old 46 years old 20 years old 29 years old 41 years old 27 years old 22 years old 23 years old 27 years old 28 years old Name of Individual Other ML Investigations Age at the time of the offence Deepak Rajneel Kapoor Robin Surya Subha Shyam Faiyaz Khan Savita Singh Chris Ronil Singh Mukeshwar Narayan Singh 25 years old 38 years old 38 years old 32 years old 38 years old 21 years old 2014 2005 2011 2010 2011 2011 2011 2012 2013 2012 2016 2012 2014 2015 2016 2016 2017 2017 2017 2017 2012 2013 2013 2015 2015 2016 44 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 8.
9.

10.

11.

12.

13.

14.

15.

Fraudulent withdrawals conducted by (foreign) nationals from Bank A ATM using cloned cards.

Customer received total of US$153,000.00 from 21 June to 9 July.

Customer profile shows he is unemployed.

Withdrawal of business funds for purchase of vehicle.

Name on the business registration differs from person at the bank.
Facebook scam soliciting funds into account of customer who was advised by her nephew, who resides in Cook Islands to receive funds in her account and then to keep $150 and transfer rest to him.

Transfer of funds to operating account from trust account by a solicitor.

May be in breach of Trust Accounts Act.

Old smelly notes were deposited into an account that normally receives cash deposits.

Customer has been to the branch a couple of times.

Looked nervous while doing transaction.


Customer's occupation is listed as domestic duties and in February 2018, customer made a cash deposit of $18,000.

She advised that source of funds was from her sister in Australia and provided no documentary evidence.

The above are extracts from actual STRs reported to the FIU in 2018.
Source: Fiji FIU Reasons for Suspicious Reporting A financial institution’s decision to report a transaction as suspicious to the FIU is based on a number of factors, such as, the: i. customer’s usual occupation or business activity; ii.

customer’s transaction history; iii.

income level and source of income of the customer; and iv.

the complexity, frequency and size of transactions; customer’s general background and profile (such as age, citizenship, etc).
These factors insignificant individually may seem but when considered together may raise questions on appropriateness and normality of customer’s transaction(s).

The above-mentioned indicators can also be based on known money laundering typologies.

Financial institutions are required under the FTR Act to know their customers in order to identify transactions that may be unusual, suspicious or questionable for an individual customer or a type or category of customer.
Examples of Reasons for Reporting Transactions as Suspicious 1.

2.

3.

4.

5.

6.

7.

Possible non-declaration of BCR as customer refused to deposit US$10,000 into account when questioned on source of funds.

Customer came in with a bundle of $9,000 cash to deposit into her account.

When questioned about the source of funds, she was a bit hesitant and rudely advised she had stolen the money.

Customer sent money to a friend and later found out he was a fake person providing motor vehicle permit .
Customer may be involved in potential fraud, due to multiple international withdrawals conducted through his bank account.

Customer was bought on behalf of her son to send funds to India.

The son deals with importing of traditional clothes from India.

Upon enquiring with employer, he doesn’t want the Proforma Invoices to be stamped by the Fiji Revenue and Customs Service.
Attempt was made to transfer $5,000.00 to mule, however, as per the Bank’s internal processes, a follow-up confirmation with the account holder identified that transaction was not authorised by him.

The transaction was reversed and there was no loss incurred by the account holder.

Individual is facilitating provision of work permits to New Zealand and is also recorded on “Wanted List” published by the Fiji Police Force.
45 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 4 OUTCOMES - CASH TRANSACTION REPORTS Financial institutions are required under section 13(1) of the FTR Act and section 25 of the FTR Regulations to report to the FIU any cash transaction of $10,000 and above or its equivalent in foreign currency.

Cash includes coin or paper money, bank drafts, bank cheques, bearer bonds, travelers cheques, postal notes and money orders.
The FIU received 968,693 CTRs in 2018 or an average of around 81,000 CTRs per month.

This is an increase of 55 percent compared to 623,213 CTRs received in 2017.
Cash Transactions Reported Year 2014 2015 2016 2017 2018 Source: Fiji FIU Total CTRs Monthly Average CTRs 1,042,074 579,849 591,636 623,213 968,693 86,8404 48,321 49,303 51,934 80,7245 Monthly Cash Transaction Reports 2014 2015 2016 2017 2018 CTRs Received by Sector The majority (99 percent) of the CTRs received during 2018 was reported by commercial banks.
Cash Transactions Reported by Sector Sector 2014 2015 2016 2017 2018 Commercial Banks Foreign Exchange Dealers and Money Remitters Finance Companies Insurance and Superannuation Fund Law Firms Securities/ Brokers/ Advisors Accountants Real Estate TOTAL Source: Fiji FIU CTRs by Direction of Cash Payment The CTRs received in 2018 consisted of an equal proportion of inwards (IN) and outward (OUT) CTRs.
Inward CTRs refer to cash transactions received by a financial institution.

Outward CTRs refer to cash transactions paid out by a financial institution.

CTRs by Direction of Cash Payment 2018 90,000 85,000 80,000 75,000 70,000 65,000 60,000 55,000 50,000 45,000 40,000 30,000 30,000 25,000 20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Fiji FIU 486,886 50% 481,807 50% 4 In 2014, two reporting institutions had reported backdated CTRs totalling 567,771 during March to September 2014.
This has not been reflected in the Monthly Cash Transaction Reports graphs for 2014.

5 In 2018 one reporting institution reported backdated CTRs totalling 249,114 in October 2018.

This is also not reflected in the Monthly Cash Transaction Reports graphs for 2018.

46 Out In Source: Fiji FIU FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 CTRs by Value of Transactions The majority (43 percent) of CTRs received by the FIU in 2018 were for cash transactions between $10,001 and $20,000.
Approximately 73 percent of CTRs reported are for cash transactions between $10,001 to $50,000.
CTRs by Value of Transactions 2018 109,354 11% 45,677 5% 105,486 11% 295,073 30% 413,103 43% Exactly $10,000 $10,001 to $20,000 $20,001 to $50,000 $50,001 to $100,000 More than $100,000 Source: Fiji FIU 47 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 5 OUTCOMES - ELECTRONIC FUNDS TRANSFER REPORTS Commercial banks and remittance service providers are required under section 13(2) of the FTR Act and section 26 of the FTR Regulations to report to the FIU all international electronic fund transfer transactions.
There is no monetary threshold for EFTRs.

The FIU received 1,357,246 EFTRs in 2018 or an average of around 113,000 EFTRs per month.

This is an increase of 11 percent compared to 1,220,602 EFTRs received in 2017.

Electronic Funds Transfer Transactions Reported EFTRs Received by Sector Majority (71 percent) of EFTRs were received from the MRSPs.

There was a notable increase of 36 percent in the number of EFTRs received from the mobile phone money remittance sector in 2018.
This reflects the growing use of this channel of remittance.

Mobile phone operators can only process inward remittances to Fiji.
EFTRs Received by Sector 2018 42,948 3% Year 2014 2015 2016 2017 2018 Source: Fiji FIU Total EFTRs Monthly Average EFTRs 346,282 26% 1,308,633 1,029,993 1,148,711 1,220,602 1,357,246 109,05310 85,833 95,726 101,717 113,104 968,016 71% Monthly Electronic Funds Transfer Reports 2014 2015 2016 2017 2018 Money Remittance Service Providers Commercial Banks Mobile Phone Money Remitters 140,000 130,000 120,000 110,000 100,000 90,000 80,000 70,000 60,000 50,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Fiji FIU Source: Fiji FIU EFTRs Received by Sector Sector 2014 2015 2016 2017 2018 Money Remittance Service Providers 886,744 697,676 793,837 869,363 968,016 Commercial Banks 419,357 324,604 333,746 319,640 346,282 Mobile Phone Money Remitters 2,532 7,713 21,128 31,599 42,948 Total 1,308,633 1,029,993 1,148,711 1,220,602 1,357,246 Source: Fiji FIU EFTRs by Direction of Remittances EFTRs may involve remittances into Fiji (inward) or remittances out of Fiji (outward).
Majority (78 percent) of EFTRs received during 2018 were for inward remittances.
10 In 2014, four reporting institutions had reported backdated EFTRs totalling 418,425 as part of the FIUs reporting compliance and data quality 48 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 EFTRs by Direction of Remittances 2018 303,980 22% Outward international remittance transactions reported to the FIU involved the following ten major countries: Australia, New Zealand, United States of America, India, Philippines, China, Solomon Islands, Hong Kong, Vanuatu and Indonesia.
EFTRs: Countries Involved in Outward Remittances from Fiji 2018 47,892 16% 1,053,266 78% Out In Source: Fiji FIU 139,729 46% 41,476 13% 17,417 6% 15,367 5% 8,695 3% 12,739 4% 5,700 2% Hong Kong Vanuatu Indonesia 4,085 1% 5,209 2% 5,671 2% Australia India New Zealand Philippines United States of America China Solomon Islands Others Source: Fiji FIU EFTRs by Direction of Remittances 2014 2015 2016 2017 2018 Inwards 1,030,405 773,264 879,644 958,090 1,053,266 Outwards 278,228 256,729 269,067 262,512 303,980 Total 1,308,633 1,029,993 1,148,711 1,220,602 1,357,246 Source: Fiji FIU EFTRs by Sending and Receiving Country Inward international remittance transactions reported to the FIU involved the following ten major countries: Australia, United State of America, New Zealand, United Kingdom, Canada, Solomon Islands, Vanuatu, Papua New Guinea, Tonga and Kiribati.
EFTRs: Countries Involved in Inward Remittances to Fiji 2018 193,518 18% 300,703 29% 8,479 1% 9,010 1% 9,270 1% 12,447 1% 14,429 1% 37,360 7% 69,502 7% 170,160 16% Australia United States of America New Zealand United Kingdom Canada Solomon Islands Vanuatu 228,388 22% Papua New Guinea Tonga Kiribati Others Source: Fiji FIU 49 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 6 OUTCOMES - BORDER CURRENCY REPORTS All travellers coming into Fiji or going out of Fiji are required to declare if they are carrying currency or negotiable bearer instruments of $10,000 or more (or its equivalent in foreign currency).
Travellers are required to make a declaration in the first instance on the arrival or departure cards and then fill out a BCR form which is available at all ports of entry and exit in Fiji.

The completed BCRs are collected by Customs FRCS officials at the ports and submitted to the FIU for central recording, analysis and for its intelligence purpose.

In 2018, 969 BCRs were submitted to the FIU compared to 792 BCRs in 2017.
BCRs by Direction of Travel There were more declarations made by outbound travellers compared to inbound travellers in 2018.

BCR Declarations by Direction of Travel 2014-2018 Sector 2014 2015 2016 2017 2018 Declarations made by inbound travellers Declarations made by outbound travellers Total Source: Fiji FIU 231 187 265 375 434 326 557 304 491 282 547 417 792 535 969 The FIU has noted an increase in declarations made by outbound travellers.
In 2018, 55 percent of declarations were made by outbound travellers while 45 percent of declarations were made by inbound travellers in 2018.
Comparison of Declaration made by Travellers by Month Inbound Outbound 80 60 40 20 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Months Source: Fiji FIU BCR Declarations: Reason for Travel 2018 25% 25% 2% 3% 4% 4% Holiday Business Visiting Friends / Relatives 23% 14% Migration Convention / Conference Medical Education / Training Others Source: Fiji FIU 50 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 BCRs by Transaction Value: Outbound 2018 5.42% 8.60% 26.54% 59.44% $10,000 $100,001 - $500,000 $10,001 - $100,000 $500,001 and above Source: Fiji FIU BCR by Transaction Value: Inbound 2018 7.83% 0.92% 3% 88.25% $10,000 $100,001 - $500,000 $10,001 - $100,000 $500,001 and above Source: Fiji FIU We have observed that 62 percent of travellers who declared BCRs were in Fiji for holiday/business/visiting friends and relatives.
The majority of BCRs declared by inbound and outbound travellers ranged in the value of $10,001.00-$100,000.00.

BCRs by Value of Currency Declared The total value of currency declared by travellers in the BCRs in 2018 was $62.7 million compared to $49.9 million in 2017.
Value of Border Currency Reports Received 2014-2018 Persons Declaring Travellers Arriving in Fiji Travelers Departing Fiji Total Source: FRCS & Fiji FIU Value of Currency Declared ($million) 2014 2015 2016 2017 2018 10.3 11.0 13.1 21.4 22.6 19.6 29.9 20.9 31.9 17.1 30.2 28.5 49.9 40.1 62.7 Failure to Declare Currency Failure to declare currency at the border is an offence under the FTR Act.

If convicted, a person is liable to a fine of up to $60,000 or imprisonment of a maximum of 10 years or both.
In 2018, there were 50 reported cases of BCR non- declaration compared to 46 cases of persons brought before the court for failing to declare currency in 2017.

Most of the cases were detected at Nadi International Airport and the remainder were detected at the Nausori Airport and various sea ports.
51 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Failure to Declare Currency Cases in 2018 - Inbound Travellers DATE OF TRAVEL DETAILS AMOUNT FAILED TO DECLARE FJD EQUIVALENT DATE OF CONVICTION JUDGMENT IN COURT 1.

25 January Passenger arrived from Hong Kong 2.


25 January Passenger arrived from Hong Kong HKD 17,920 RMB 1,457 USD 4,562 MYR 6,400 THB 5,600 SGD 237 MYS 7,101 THAI 2,360 EURO 230 GBP 110 HKD 10 PHL 1,100 TWN 5,400 SGD 14,000 USD 1 VATU 500 TRY 100 $17,018.62 29 March Cash released back to accused Fined FJ$1,500 $20,543.00 29 March Cash released back to accused Fined FJ$2,000 3.

5 February Passenger arrived from Hong Kong USD 40,380 $76, 106.85 19 February Fined FJ$2,000 Cash released back to accused 4.
7 February Passenger arrived from Hong Kong 5.

13 February Passenger arrived from Sydney, Australia AUD 5,300 USD 6,422 RMB 2,325 HKD 180 FJD 150 AUD 6,490 FJD 430 Yen 135,000 Dong 590,300 USD 1,100 $20,807.53 20 February Fined FJ$1,500 Cash released back to Accused $15,253.00 21 February Fined FJ$1,000 Cash released back to Accused 6.

7.

8.

9.
7.

8.

9.

16 February Passenger arrived from Hong Kong FJD 21,019.41 $21,019.41 21 February 16 February Passenger arrived from Hong Kong FJD 54,228.91 $54,228.91 21 February 16 February Passenger arrived from Hong Kong FJD 35,967.00 $35,967.00 21 February 16 February Passenger arrived from Hong Kong FJD 34,239.92 $34,239.92 21 February 10.

21 February Passenger arrived from Hong Kong USD 5,326 RMB 2,710 USD 10,000 $10,735.09 22 February 11.
21 February Passenger arrived from Hong Kong RMB 1,630 $19,317.21 22 February 12.

21 February Passenger arrived from Port Vila, Vanuatu 13.

26 February Passenger arrived from Hong Kong 14.
20 March Passenger arrived from Hong Kong Kyat 20 USD 5,316 HKD 30 TNG 18 USD 9,800 FJD 700 FJD 17,000 RMB 10,098 $14,641.34 23 February $21,387.48 27 February $17.477.66 28 March Fined FJ$3,000 Cash released back to Accused Fined FJ$3,000 Cash released back to Accused Fined FJ$3,000 Cash released back to Accused Fined FJ$3,000 Cash released back to Accused Fined FJ$10,000 Cash released back to accused Fined FJ$500 Cash released back to accused Fined FJ$500 Cash released back to Accused Fined FJ$8,000 Cash released back to Accused Fined FJ$5,000 Cash released back to Accused 52 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 DATE OF TRAVEL DETAILS AMOUNT FAILED TO DECLARE FJD EQUIVALENT DATE OF CONVICTION JUDGMENT IN COURT 15.
20 March Passenger arrived from Hong Kong FJD 17,000 RNB 1,488 $17,474.00 20 March Fined FJ$5000.00 File Closed.

16.

31 March Passenger arrived from Nukualofa, Tonga.

USD 15,000 $30,599.00 17 May Charged letter issued, however no response from passenger.

17/05/2018 – Notice of Seizure issued.

Currency forfeited.

17.

9 April Passenger arrived from Apia, Samoa.

18.

20 April Passenger arrived from Apia, Samoa.

29 April Passenger arrived from Vanuatu.


USD 7,160.00 CNY 194.00 HKD 10.00 USD 8,865 AUD 25 NZD 70 HKD 70 FJD 100 CNY 33 AUD 120 USD 6,440 $14,672.00 20 April Fined FJ$1,000 $17,043.40 3 May Fined FJ$1,000 $13,422.00 2 May Fined FJ$1,000.00 29 April Passenger arrived from Singapore USD 8,500 $17,468.00 29 April Fined FJ$1,000.00 27 April Passenger arrived from Singapore USD 42,366 $87,068.00 30 April Fined FJ$1,000.00 30 April Passenger arrived from Brisbane, Australia.

23.
23.

11 May Passenger arrived from Hong Kong AUD 10,290 RMB 849 USD 6,900 RMB 4,000 HKD 70 USD 8,620 $16,308.00 1 May Fined FJ$1,000.00 $14,185.59 11 May Fined FJ$1,000.00 19.

20.

21.

22.

24.

15 May Passenger departed for Tonga Pa’anga 75 $17,199.00 18 May Fined FJ$1,000.00 25.

23 May Passenger arrived from Sydney, Australia.

26.

23 May Passenger arrived from Hong Kong 27.

7 June Passenger arrived from Tarawa, Kiribati.


FJD 25 AUD 12,610 USD 2 RMB 3,600 INR 7,000 USD 14,258 INR 4,800 HKD 40 AED 45 USD 8,902 HKD 2,300 AUD 465 SGD 100 FJD 390 GBP 250 THB 150,410 RMB 64 MOP 50 RIEL 23,900 $19,428.35 24 May Fined FJ$1,000.00 $27,508.43 28 May Fined FJ$1,000.00 $21,642.56 28 September Awaiting interview from the offender.

28.

29.

30.

6 June Passenger arrived from Port Vila, Vanuatu USD 8,700 $16,724.23 28 May Fined FJ$1,000.00 22 June Passenger arrived from Panama.
USD 15,000 $30,000.00 Case still opened.

Currency is still under Customs for DEU Investigation.

Awaiting court judgement.

6 July Passenger arrived from Sydney, Australia, AUD 6,000 $12,752.85 9 July Fined FJ$1,000.00 53 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 DATE OF TRAVEL 13 July 10 August 31.

32.

DETAILS AMOUNT FAILED TO DECLARE FJD EQUIVALENT DATE OF CONVICTION JUDGMENT IN COURT Wang Pang arrived from Port Vila, Vanuatu Passenger arrived from Incheon, Korea.
USD 6,000 $12,500.00 27 July Fined FJ$1,000.00 RMB 51,300 $13,588.49 14 August Fined FJ$1,000.00 33.

10 August Passenger arrived from Kiribati FJD 46,240 $46,240.00 6 November Customs offence could not be proven hence case handed over to Fraud and Evasion team, Tax Division.

28 August Passenger arrived from Los Angeles USD 8,803 $17,870.48 27 August Fined FJ$1,000.00 34.

35.

15 September Passenger arrived from Singapore 36.


20 October Passenger arrived from Apia, Samoa EUR 1,900 USD 4,916 USD 7,143 RMB 5,176 Tala 120 USD 1,023 $15,546.00 17 September Fined FJ$1,000.00 $16,152.63 20 October Fined FJ$1,000.00 37.

23 October Passenger arrived from Hong Kong.

RMB 1,400 $28,357.00 24 October Fined FJ$1,000.00 38.

23 October Passenger arrived from Hong Kong.

39.

23 October Passenger arrived from Hong Kong, China.

40.

28 October Passenger arrived from Majuro, Marshall Island.
41.

7 November Passenger arrived from Korea 42.

7 November Passenger arrived from Korea 43.

12 November Passenger arrived from Hong Kong 44.

18 November Passenger arrived from Port Moresby 45.

20 November Passenger arrived from Hong Kong 46.
24 November Passenger arrived from Port Vila, Vanuatu via Apia, Samoa HKD 105,603 USD 10,155 HKD 10,635 CNY 2,035 SGD 3 AUD 12,000 HKD 650 RMB 496 USD 9,246 CNY 500 USD 11,000 CNY 821 USD 10,000 CNY 45 USD 21,700 EUR 82,000 USD 9,300 AUD 9,900 CNY 8,400 AUD 6,160 NZD 440 SGD 62 FJD 165 USD 6,700 WST 220 VUV 6,500 $23,593.00 25 October Fined FJ$1,000.00 $17,673.00 25 October Fined FJ$1,000.00 $21,015.83 28 October Fined FJ$1,000.00 $23,710.49 8 November Fined FJ$1,000.00 $20,357.72 8 November Fined FJ$1,000.00 $240,310.00 28 November Notice of Seizure issued.
$37,331.34 18 November Fined FJ$1,000.00 $10,351.22 20 November Fined FJ$1,000.00 $13,438.00 24 November Fined FJ$1,000.00 54 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 DATE OF TRAVEL DETAILS AMOUNT FAILED TO DECLARE FJD EQUIVALENT DATE OF CONVICTION JUDGMENT IN COURT 47.

5 November Person C & Person D departed for New Zealand NZD 22,200 FJD 728 $31,407.31 Still under Investigation.

Still Under Investigation 48.


5 November Nausori Airport Person E departed Suva for New Zealand Korovou, Nausori 49.

7 December Passenger departed for New Zealand 50.

24 December Passenger departed for Australia Source: FRCS and Border Police and FIU NZD 7,615 $10,547.65 Still under Investigation.
Warning letter to be issued FJD 6,150 NZD 9,385 AUD 660 AUD 6,500 USD 3,100 $19,989.76 Still under investigation Still under investigation $16,200.00 Still under investigation Still under investigation BCR Case Study 1 Mr John Smith was reported to Customs officials upon disembarking a flight and acting suspicious during the flight from Hong Kong to Nadi.

Mr Smith is said to have travelled with another young female companion.

Customs officials profiled Mr John Smith with the information provided.
Mr Smith had marked ‘No’ on his arrival card, when required to declare currency in his possession which is equivalent to FJD10,000.00.

Additionally, Mr Smith had nothing to declare when questioned by Customs prior to physical examination of his luggage.

However, USD10,094.00, AUD600.00, LKR29,340.00, HKD540.00, MOP10.00, and SGD100.00 were found in his luggage when searched.

These currencies, when converted to Fijian dollars were equivalent to $20,576.00.
BCR Case Study 2 Mr Ying Yang was profiled by Customs officials for his suspicious travel route.

Mr Yang arrived in Nadi, from Nukualofa, Tonga on 31 March 2018.

The purpose of his travel was for transit to Hong Kong on 1 April 2018.

The passenger was marked for questioning and his luggage examined.

Prior to examination, Mr Yang had nothing to declare to Customs, both written as made on his arrival card and verbal.
Upon examination it was found that he had concealed USD15,000.00 in the bottom compartment of his suitcase, using chocolate bar wrappers to hide the currency.

Additionally, his wallet had USD400.00 and YUAN2,070.

The concealment method illustrated that Mr Yang had no intention of declaring the currency and possibly moving currency across borders in a questionable manner.

Mr Yang made an unsuccessful attempt to smuggle currency through Fiji’s border.
The currency in Mr Yang’s wallet was released for welfare purposes; however, the USD15,000.00 was seized and forfeited as a result of Mr Yang’s failure to respond within the required timeframe.
55 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 7 OUTCOMES - CONTINUING AND DECLINING MONEY LAUNDERING TRENDS Continuing Trend Email Compromise and Email Spoofing Commercial banks, financial institutions, businesses and members of the public were continuously advised by the Fiji FIU to exercise caution when handling email payment instructions for import trade transactions and large value personal outbound foreign remittance transactions.
The Fiji FIU noted a continuous increase in cases of individuals and businesses falling victim to email compromise and spoofing scams in 2018.

Case examples reported to the Fiji FIU in 2018 on email compromise and email spoofing cases include: • • In March 2018, an email account of a local bank customer was compromised and a fraudulent payment instruction was sent to the local bank.

Approximately FJ$575,000 was transferred to a foreign bank account belonging to a cybercriminal syndicate.
In September 2018, in a case involving cyber money laundering, FJ$556,000 was fraudulently transferred from a local business bank account to an offshore “incorrect” bank account number.

In this case the foreign supplier’s business email was compromised.

• In October 2018, proceeds of approximately FJ$27,000 from the sale of investment shares of a local investor who is residing abroad, was remitted to a cybercriminal’s bank account in another country as a result of email compromise of the investor.
• totalling In October 2018, an estate property settlement proceeds approximately FJ$845,000 was remitted to the foreign bank account of a cybercriminal who pretended to be the beneficiary of the estate.

It appears that email accounts of the beneficiary and local party were compromised.

Any suspicious overseas trade transaction or large personal remittance that could be linked to email compromise and spoofing scams should immediately be reported as a suspicious transaction report to the Fiji FIU.
Commercial banks and remittance service providers were reminded to conduct enhanced due diligence for suspicious payment instructions.

Declining Trends The FIU has noted a decline in the following trends: a) the use of fraudulent documentation to conduct financial transactions; and b) number of impersonation cases reported to the FIU.
56 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 8 CASE STUDIES Money Laundering Cases: Success Stories in Fiji Manipulation of Internal Systems and Processes Ms Vika Sadrau was employed with Post Fiji Limited as a Customer Service Officer responsible for processing Electronic Money Orders (EMO).

From March to May 2015, Ms Sadrau dishonestly obtained $55,779.32 by manipulating the EMO system.
Ms Sadrau processed an EMO transaction for a customer and used the same EMO key ID to create multiple payments for the same transaction.

Ms Sadrau then altered the payment amounts and payee details and obtained approval from her supervisor to make payments to herself.

Ms Sadrau processed payments to herself totaling $55,779.32.

She then deposited $21,000.00 into her bank account.

Ms Sadrau pleaded guilty to one count of theft and one count of money laundering.
On 22 August 2018, Ms Sadrau was sentenced to 18 months imprisonment for theft and four years imprisonment for money laundering.

The case study demonstrates breach of internal control procedures.

Breach of Employer Trust and Manipulation of Internal Systems and Processes Ms Rosheen Praveena Raj and Ms Munivai Sorby were employed as finance officers at the Pacific Theological College.

They were responsible for processing cheques for wages and bills.
From 2006 to 2011, Ms Raj and Ms Sorby manipulated this system to fraudulently obtain proceeds totaling $582,244.42.

Ms Raj was responsible for all Accounts Payable including payroll.

She tampered with the weekly payroll spreadsheet, payment vouchers, and cheques to process excess wage payments of $96,576.86 and $73,099.93 to herself and Ms Sorby respectively.

The fraud was detected when Mr Nilesh Avinesh Sharma was appointed the Director of Finance and Administration in 2012.
He discovered major anomalies in the financial records and conducted an internal investigation and audit to identify the causes of these anomalies.

Ms Raj and Ms Sorby also tampered with bill payment cheques to make payments totaling $412,567.61 to themselves.

On 18 September 2018, Ms Raj and Ms Sorby were found guilty of two count of money laundering each.

On 19 September 2018, Ms Raj and Ms Sorby were sentenced to 11 and 10 years imprisonment respectively.
Colluding to facilitate illicit gains Mr Rahul Rajan Naidu received a job offer from a “Jasmin Olich of Global Link Money Services” to conduct a confidential evaluation on Western Union services by sending and receiving money through Western Union.

Mr Naidu was advised that the funds would only be transferred to a Westpac bank account which he would then withdraw, deduct his commission and remit the remainder to various individuals in parts of Nigeria.
Since Mr Naidu did not hold an account at Westpac Bank he approached his friend, Mr Shoeb Nur Ali, a pay master at a local company to assist him find Westpac Bank account holders who were not using their bank accounts.

Mr Ali asked his friend, Mr Avenai Danford, if he was willing to allow Mr Naidu to use his account to receive funds.

Mr Danford agreed and received $12,000.00 into his Westpac bank account from unauthorised internet banking transfers from three victims.
Mr Danford withdrew and gave these funds to Mr Naidu.

Mr Naidu then asked Mr. Shoeb Nur Ali for copies of his ID and copies of ID of three of Mr Ali’s colleagues.

Ms. Rimakshni Ranigal, Front Line Officer at an exchange dealer outlet, used these documents as well as copies of other ID that Mr Naidu obtained to send 12 remittances to Nigeria.
None of the 12 individuals who were recorded as the senders of these remittances were present when the funds were sent and were not aware that funds were sent using their names and ID.

On 4 September 2018, Mr Naidu was found guilty of four counts of money laundering and Mr 57 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Danford and Ms Rimakshni Ranigal were found guilty of one count of money laundering each.
On 18 September 2018, Mr Naidu, Mr Danford and Ms Ranigal were given imprisonement sentences of six years nine months, three years and five years respectively.
Hacked Internet Banking Accounts COUNTRY B Fraudster Fraudulent Job Offer Convicted Convicted Colluded to send funds illegally Rahul Rajan Naidu Rimakshni Ranigal $12,000 Convicted $6,500 $12,000 Avenai Danford Fiji Nigeria 58 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Case Study 1: Use of a Gatekeeper to allegedly facilitate unusual EFTPOS transactions The FIU received a suspicious transaction report from a local bank on significant transactions conducted on a single EFTPOS terminal over a weekend.
It was deemed suspicious since the EFTPOS terminal was a newly installed facility at a small local law firm.

The FIU established that a Fijian national, Person A, residing in Country B approached Person X, principal of the local law firm, to acquire an EFTPOS machine to receive investment funds on behalf of his entity, Company A.

The local law firm acquired the EFTPOS facility despite no apparent economic viability for an EFTPOS machine.
A week later, two foreign credit cards were fraudulently used to conduct seven transactions within a span of three weeks totaling approximately FJ$2 million through the EFTPOS terminal at the local law firm.

The funds were transferred to the law firm’s trust account.

It was established that Person X was supposedly involved in the elaborate scam with Person A and Company A to fraudulently obtain funds using the EFTPOS machine.
Person X received approximately FJ$221,000.00 from the fraudulent transfers while Company A received approximately FJ$650,000.00 into its local bank account.

Case Study 2: Business Email Compromise resulting in significant loss The FIU received a suspicious transaction report from Bank D that Company C was a victim of a business email compromise.
The FIU established that Company C’s business email correspondences with their foreign supplier was compromised by a hacker in Country F. The hacker intercepted the email correspondences and instructed Company C to transfer approximately US$266,000.00 to a foreign bank account number.

The hacker emailed Company C with an email address similar to Company C’s foreign supplier.

The remaining FJ$1,129,000.00 was retained in the law firm’s trust account.
Funds were swiftly withdrawn from Company A’s local bank account to pay individuals and invest in assets.

It was also established that expensive Rolex wrist watches were purchased from the proceeds of crime.

There was good coordination and communication between local border law enforcement agencies and the FIU in this matter.
The FIU issued an enforceable instruction notice to the local bank to restrict all bank accounts involved in the elaborate scheme including beneficiaries of the funds to secure and minimise the loss of the proceeds of crime.

The FIU provided a case dissemination report to the FPF and the case is still under investigation.
Possible offence: • Fraud • Possession of property suspected of being proceeds of crime • Money laundering Indicators: • Use of lawyer as a gatekeeper to facilitate fraud • Use of unfamiliar business transacting methods which were not commensurate with nature of business • Purchase of valuable assets and luxury items The FIU provided a case dissemination report to the respective foreign FIU for their investigation.
It was established that the funds were subsequently dissipated to different entities on the same day.

However, the ultimate destination of the funds could not be ascertained.
Possible offence: • Obtaining financial advantage through deception • General dishonesty Indicators: • Use of similar email addresses in order to convince the local firms to transfer the funds • Changing payment details and beneficiary details at the last minute 59 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Case Study 3: Undeclared Currency Exchange funds out of the country.

A case dissemination report was provided to the FRCS for their profiling and investigations.
The FIU received a suspicious transaction report from a foreign exchange dealer on Person M, a naturalised Fiji citizen who is a frequent traveller to Country Z.

Person M conducted three foreign exchange transactions totalling approximately FJ$30,000.00 on behalf of Person X and Person Y, who were minors.

The Fiji FIU conducted financial profiling and established that the FJ$30,000.00 was not sourced from Person M, X and Y’s bank accounts.
It was suspected that the individuals were keeping cash at home and laundering Possible offence: • Non-declaration of BCR • Money laundering • Possible tax related offence/tax evasion Indicators: • BCR form not filled by individual • Individual exchanged funds under the name of other persons, who were minors Case Study 4: Cheque Washing The FIU received a suspicious transaction report from a local bank in relation to a to suspected high level fraud attempt on a publicly listed entity, Company E. The FIU established that Person F altered or “washed” 14 cheques that were issued by Company E to pay Person F. The local bank’s verification process identified that the payee on the cheques were altered and had not cashed the cheques.
Case Study 5: Laundering business proceeds via cash intensive business Company A was reported for conducting significant cash deposits and subsequently purchasing bank cheques with cash.

The FIU established that Company A had not lodged its tax returns in 2016 and 2017.

However, it received approximately FJ$6.4 million dollars in deposits.
Further analysis established that the shareholder, Person O and The FIU further established that that Person F was related to one of the high ranking officials of Company E. A case dissemination report was provided to the FPF, Cybercrime Unit for their investigations.

The matter is now before the Suva Magistrates Court.
Possible offence: • Obtaining financial advantage through deception • Fraud Indicators: • Stains or discolorations on the cheque possibly caused by erasures or alterations his wife Person P received approximately $740,000.00 as deposits into their bank accounts and had also not lodged their tax returns.

A case dissemination report was provided to FRCS on Company A, Person O and Person P for investigation.
Possible offence: • Tax related offences Indicators: • Large cash deposits • Use of family member to facilitate tax evasion • Use of cash intensive business to launder funds 60 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Case Study 6: Law Firm falls victim of a Business Email Compromise Scam The FIU received a suspicious transaction report in relation to a bank account held at Bank Z in Country A which was used to fraudulently obtain funds from a local law firm.
The law firm was engaged to facilitate the sale of a property on behalf of four individuals who were the beneficiaries of the estate.

The email address of one of the individuals, Person V was compromised and a fraudulent email was sent to the local law firm advising them that the funds should be sent to the bank account held at Bank Z.
The local law firm sent approximately FJ$845,000.00 to the bank account held at Bank Z in two separate transactions in October 2018 The local law firm did not realize they were victims of a “business email compromise scam” until Person V followed up on the payment.

Case Study 7: Alleged tax evasion by diversification of business operations and use of family members The FIU received a STR on Person A who is alleged to have been diverting business funds into his personal bank account.
Person A is the director of a Company X and also operates a fuel pump station on the same premises.

The FIU conducted financial checks and established that Person A had used his personal bank account to make payments to Company Y for fuel supplied for the pump station.

The FIU conducted further checks and established that Person A received significant cash and cheque deposits into his personal bank account.
It was established that The financial institution in Fiji that sent the funds attempted to recall the funds but was unsuccessful.

We believe that the account signatory of the bank account held at Bank Z in Country X may be involved in computer related offences and a party to business email compromise scam.

The FIU liaised with its overseas counterparts to recover the funds.

The case is still under investigation.


Possible offence: • Business email compromise/email account compromise Indicators: • Sudden change in account details for remittance payment • The use full names instead of nicknames and a language structure may not match how the supposed sender normally communicates most of the cash and cheques were drawn on the business account belonging to Company X.
The FIU had previous intelligence holding on the son of Person A who was also reported for possible tax related offences.

The FIU conducted further checks and noted outstanding tax lodgements for Person A and his son.

A report was disseminated to FRCS for alleged tax offences.
Possible offence: • Tax evasion Indicators: • No tax returns lodged with the tax authority • Depositing of business funds into personal account • Use of family member to evade taxes • Diversification of business operations to evade taxes 61 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Case Study 8: Undeclared Currency Exchange The Fiji FIU received a suspicious transaction report in relation to Person M receiving significant amounts of funds from Company D. It was established that Person M was also a director and shareholder of Company D. Company D had received approximately $510,138.00 in remittances from Company E located in Country B.
These remittances were allegedly for bill payments, purchase of goods and trade payments.

Fiji FIU discovered that Person M was also a director and shareholder of Company E in Country B and that there were no exports from Company D to Company E to match the remittance payments.

The funds were then transferred to Person M’s local bank account and used to purchase property.

The FIU further established that Person M had received approximately $897,913.00 from Person N located in Country B.
These funds were then used by Person M to purchase another property.

A case dissemination report was provided to the FIU of Country B and FRCS for further profiling and investigation.
Possible offence: • Trade based money laundering • Tax related offences Indicators: • Significant inward remittances • Rapid movement of funds from business to personal accounts • Numerous related entities utilized to move funds • Property investment Flow of Funds and Assets Purchased COUNTRY B Company E Fiji Purchased $510,138.00 Company D Direct Shareholder Direct Shareholder Person N $897,913.00 Purchased Person M 62 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 Case Study 9: Significant funds movement among unrelated individuals between jurisdictions The FIU received a STR on Person Y for receiving remittances totaling approximately $167,000.00 from an unrelated individual, Person X in Country D. Person Y claimed that the funds for the construction of Person Y’s property.
Fiji FIU established that Person Y bought land in 2018 valued at $100,000.00.

Person Y had not declared any income in the last two years and did not seem to be employed.

The FIU also discovered that Person X was potentially a person of interest to law enforcement authorities in Country D and maybe using Person Y to launder funds in Fiji.

A report was disseminated to the FPF Intelligence Bureau and the FIU in Country D for further profiling.
Possible Offence: • Money laundering offences • Tax evasion Indicators: • local Significant remittance of funds between and overseas individuals without any apparent established relationship COUNTRY D Fiji $167,000.00 Purchased Person X Person Y Unemployed No other assets 63 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 GLOSSARY Alliance for Financial Inclusion FICAC Fiji Independent Commission Against Corruption FIU FRCS FUR FPF FTR Financial Intelligence Unit Fiji Revenue and Customs Services Follow-Up Report Fiji Police Force Financial Transactions Reporting GSPWG Global Standards Proportionality Working Group ID IMF MER ML MOA Identification Document International Monetary Fund Mutual Evaluation Report Money Laundering Memorandum of Agreement PF RBF STR TF Proliferation Financing Reserve Bank of Fiji Suspicious Transaction Report Terrorist Financing Data Mining System NCLASA National Combined Law and Security Agencies Electronic Funds Transfer Report ODPP Office of the Director of Public Prosecutions 8 AFI AML AMS APG Anti-Money Laundering Alert and Monitoring System Asia Pacific Group on Money Laundering APIFIU Association of Pacific Islands FIUs AUSTRAC Australian Transaction Reports and Analysis Centre BCR CDR CFT Border Currency Report Case Dissemination Report Combating the Financing of Terrorism CTOG Counter Terrorism Officials Working Group CTR Cash Transaction Report DNFBP Designated Non-Financial Businesses and Professions DMS EFTR EMO ESW FATF Electronic Money Order Egmont Secure Web Financial Action Task Force FFIMSO Fiji FIU Information Management System Online 64 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018 CONTACT INFORMATION Financial Intelligence Unit Level 5, Reserve Bank Building Reserve Bank of Fiji Private Mail Bag Pratt Street, Suva, Fiji Telephone: (679) 322 3333 Facsimile: (679) 331 6454 Email: info@fijifiu.gov.fj Website: www.fijifiu.gov.fj www.fijifiu.gov.fiji 66 FIJI FINANCIAL INTELLIGENCE UNIT ANNUAL REPORT 2018