ANTI-MONEY LAUNDERING LAW, 2014 AN ACT THAT DEFINES THE CRIME OF MONEY LAUNDERING, PRESCRIBES PENALTIES, AND PROVIDES FOR OTHER RELATED MATTERS Effective Date – [March 8, 2014] PART 1. Short Title This Act shall be cited as the “Anti-Money Laundering Act of 2014.” PART 2. Statement of Policy It is hereby declared that it is the policy of the State to uphold and protect the integrity and confidentiality of bank accounts, and to ensure that the territory of Rotuma is not used as a hub for laundering money derived from unlawful activities. In line with its foreign policy, the State commits to cooperating in cross-border investigations and prosecutions of individuals engaged in money laundering, regardless of where such offenses occur. PART 3. Definitions For the purposes of this Act, the following terms shall have the meanings stated below: (a) “Covered institution” refers to: (1) banks, non-bank financial institutions, quasi-banks, trust entities, and all other institutions—including their subsidiaries and affiliates—that are supervised or regulated by the Rotuma International Services Authority (RISA); (2) insurance companies and all similar institutions under the supervision or regulation of RISA; (3) the following types of financial entities: (i) securities dealers, brokers, sales agents, investment houses, and similar institutions that manage securities or offer services as investment agents, advisors, or consultants; (ii) mutual funds, closed-end investment companies, common trust funds, pre-need companies, and other comparable entities; (iii) foreign exchange businesses, money changers, remittance services, money transfer operators, and similar firms; (iv) any other entities that administer or deal in currency, commodities or financial derivatives, valuable items, cash equivalents, and other comparable financial instruments or assets that fall under the regulatory authority of RISA. (b) “Covered transaction” refers to a single transaction or a set of related transactions exceeding USD 10,000 (or its equivalent in another currency, based on the current exchange rate), carried out within five (5) consecutive banking days. However, this does not include transactions between a covered institution and a client who, at the time, was properly identified and whose transaction amount aligns with their financial profile or business activities. Also excluded are transactions that have a clear legal, commercial, or economic basis. 1.The term also includes individual or multiple unusually large and complex transactions — particularly cash deposits or investments exceeding USD 10,000 — that lack a credible origin, economic purpose, legal obligation, or contract to justify them. (c) “Monetary instrument” includes: 1.Coins or currency that are legal tender in Rotuma or any other country; 2.Drafts, checks, and promissory notes; 3.Financial instruments such as securities, negotiable instruments, bonds, commercial papers, certificates of deposit, trust certificates, custodial receipts, deposit substitutes, trading instructions, transaction records, sale or investment confirmations, and money market instruments; Any other similar instruments that can be transferred by endorsement, assignment, or delivery. (d) “Offender” refers to any individual who engages in money laundering activities. (e) “Person” means any individual or legal entity. (f) “Proceeds” refer to any amount of money obtained from illegal activities. (g) “Supervising Authority” is the designated regulatory body, department, or agency that oversees the operations of covered institutions as identified in Part 3(a). (h) “Transaction” covers any action that establishes rights or obligations, or creates a legal or contractual relationship between parties. It also includes any transfer of funds through any method involving a covered institution. (i) “Unlawful activity” refers to any act or omission, whether standalone or part of a series, that involves or is connected to: 1.Kidnapping, terrorism, or hijacking; 2.Drug trafficking, sale, or distribution; 3.Corruption or corrupt practices; 4.Plunder, robbery, or extortion; 5.Illegal gambling. 6.Acts Considered Unlawful Activities: 7.Acts of piracy committed on roads, at sea, or in the ocean; 8.Qualified theft (theft under specific aggravating circumstances); 9.Fraud, financial scams, and deceptive business practices; 10.Smuggling; 11.Any other form of criminal conduct. PART 4. Money Laundering Offense Money laundering is a criminal act in which funds obtained through illegal means are processed or transacted in a way that makes them appear as though they originate from lawful sources. A person commits money laundering when: 1.They knowingly engage in or attempt to engage in any transaction involving a monetary instrument or property that represents, involves, or is connected to proceeds from unlawful activities. 2.They knowingly take actions — or fail to take necessary actions — that result in facilitating the laundering of assets as described above. 3.They are aware that a monetary instrument or property must be reported and disclosed under this Act to the Department of Anti-Money Laundering (DAML) and fail to comply with that obligation. PART 5. Jurisdiction Over Money Laundering Cases Regional trial courts shall have the authority and jurisdiction to hear and decide all legal proceedings related to money laundering offenses. PART 6. Prosecution of Money Laundering A person can be charged with and found guilty of both the predicate unlawful activity and the crime of money laundering, as defined in this Act. Legal proceedings for the underlying unlawful activity will take precedence over the prosecution for money laundering offenses. This is without prejudice to the enforcement of provisional remedies such as asset freezing and forfeiture, as provided by law. PART 7. Establishment of the Department of Anti-Money Laundering (DAML) A dedicated agency called the Department of Anti-Money Laundering (DAML) is hereby established. It will consist of members from the Rotuma International Services Authority (RISA) and the Governor of the Banque Nationale de Rotuma. DAML will function through unanimous decisions and will carry out the following duties: 1.Require and collect covered transaction reports from relevant financial institutions; 2.Issue directives to Supervising Authorities or covered institutions to determine the actual owner of any monetary instrument or asset reported in a covered transaction, or when assistance is requested by a foreign government, or when the Council believes — based on substantial evidence — that such assets, in whole or in part and regardless of location, are connected in any way to the proceeds of criminal activities; 3.Initiate civil forfeiture actions and other appropriate legal remedies through the Office of the Solicitor General. 4.The Department of Anti-Money Laundering (DAML) shall also have the following powers and responsibilities: 5.Legal Action: Initiate the filing of complaints with the Department of Justice to prosecute individuals or entities involved in money laundering offenses. 6.Investigative Authority: Launch investigations into covered transactions, suspected money laundering operations, and other violations of this Act. 7.Asset Freezing: Order the freezing of any monetary instrument or property suspected to be proceeds of criminal activity. 8.Implementation of Countermeasures: Enforce any lawful and necessary measures to effectively combat money laundering, in accordance with this Act. 9.International Cooperation: Act upon requests for assistance from foreign governments in their own anti-money laundering efforts as provided under this Act. 10.Public Awareness and Training: Design and deliver educational programs that inform the public and financial sector about: 11.The harmful impact of money laundering; 12.Common methods and techniques used in laundering money; 13.Effective prevention strategies; 14.Proper procedures for prosecution and punishment of offend ers. 15.Governmental Coordina tion: Enlist the cooperation of any government department, agency, bureau, office, or government-owned or controlled corporation in support of anti-money laundering activities. This may include access to personnel, facilities, and other resources to ensure effective prevention, detection, investigation, and prosecution of money laundering c a ses. PART 8. Establishment of the Secretariat DAML is authorized to create a Secretariat, to be led by an Executive Director appointed by the Council for a term of five (5) years. The Executive Director must: a.Be a current member of the Rotuma International Services Authority or the Banque Nationale de Rotuma; b.Be at least thirty-five (35) years old; c.Demonstrate good moral character, unquestionable integrity, and proven honesty. PART 9. Prevention of Money Laundering: Customer Identification and Record-Keeping Requirements (a) Customer Identification: Covered institutions are required to verify and record the true identity of their clients using official documentation. For corporate clients, institutions must also verify the company’s legal existence, structure, and the identity and authority of individuals acting on its behalf. Notwithstanding any conflicting aws, anonymous accounts, accounts under fictitious names, or similar accounts are strictly prohibited. (b) Record Keeping: All transaction reords must be preserved securely by covered institutions for a minimum of five (5) years from the date of each transaction. In the case of closed accounts, client identification details, account files, and business correspondence must also be retained for at least five (5) years from the closure date (c) Reporting Covered Transactions: Covered institutions must report all coveed transactions to DAML within five (5) working days from the date of the transaction, unless the relevant Supervising Authority allows a longer period, which may not exceed ten (10) working days.When submitting these reports, the institutions — along with their officers, employees, agents, representatives, advisors, consultants, or associates — shall not be considered in violation of the International Banking Act (2015), the International Insurance Act (2015), the International Companies Act (2015), or other similar laws. However, they are strictly prohibited from disclosing or communicating such information to unauthorized parties. Confidentiality of Covered Transaction Reports Covered institutions and their officers, employees, representatives, agents, advisors, consultants, or associates are strictly prohibited from disclosing — directly or indirectly, by any method or means — the fact that a covered transaction report has been filed, its content, or any related information to any person. Any individual who violates this confidentiality requirement shall be criminally liable. However, no administrative, criminal, or civil liability shall arise against any person who, in good faith and in the regular course of duty, files a covered transaction report — regardless of whether or not the report leads to prosecution under this Act or any other law in Rotuma. Additionally, these individuals are prohibited from communicating with any person, organization, or the media regarding such reports. Under no circumstance shall the existence or content of a covered transaction report be published or broadcast in any form, whether through mass media, electronic mail, or other similar channels. If breached, criminal liability may extend not only to the individuals in the covered institution but also to members of the media involved in the disclosure. PART 10. Authority to Freeze Accounts If the Department of Anti-Money Laundering (DAML) determines that probable cause exists to believe that any deposit or similar account is linked to an unlawful activity, it may issue an immediate freeze order for a period of up to fifteen (15) days. A notice of account freezing must be issued at the same time the freeze order is executed. The affected depositor has seventy-two (72) hours from receipt of the notice to submit a written explanation requesting the lifting of the freeze. DAML then has seventy-two (72) hours to respond to the depositor’s explanation. If DAML fails to act within that time, the freeze order will be automatically lifted. The initial 15-day freeze may be extended by a court order, and the countdown shall be paused until the court issues a ruling. PART 11. Authority to Examine Bank Deposits Despite existing provisions under the International Banking Act (2015), the International Insurance Act (2015), the International Companies Act (2015), and similar laws, DAML may investigate or examine any specific bank deposit or investment held by a bank or non-bank financial institution. This authority requires a court order and may only be exercised in connection with violations of this Act where there is probable cause to believe the assets are connected to money laundering offenses. This provision does not apply to deposits or investments made before this Act came into effect. PART 12. Asset Forfeiture Provisions (a) Civil Forfeiture: If a covered transaction report has been filed and the court grants a petition for seizure of a monetary instrument or property (either wholly or partially) believed to be connected to the reported transaction, the process will follow the Rules of Court on civil forfeiture. (b) Claims on Forfeited Property: If a criminal court orders the forfeiture of a monetary instrument or property under a money laundering case (as defined in Part 4 of this Act), the convicted person — or any individual claiming legal interest in the assets — may file a verified petition requesting: A declaration that the forfeited property rightfully belongs to them, and The exclusion or separation of the said property from the forfeiture order. This petition must be filed within fifteen (15) days from the date of the court’s forfeiture order. Failure to do so will render the order final and irrevocable. This rule applies to both civil and criminal forfeiture proceedings. (c) Payment in Lieu of Forfeiture In cases where the court has issued a forfeiture order for a monetary instrument or property related to a money laundering offense (as defined in Part 4), and the order cannot be enforced due to the inability to locate the item despite due diligence, or if the item has been significantly altered, destroyed, reduced in value, or rendered worthless due to any actions or omissions—directly or indirectly—attributable to the offender, or if it has been concealed, removed, converted, or transferred to prevent its discovery or to avoid its forfeiture, or if the item is located outside the jurisdiction of Rotuma or has been placed beyond the jurisdiction of the court, or if it has been mixed with other assets belonging to the offender or a third party, making it difficult to identify or separate the item for forfeiture purposes, the court may, instead of enforcing the forfeiture order on the monetary instrument or property or any part of it, order the convicted offender to pay an amount equal to the value of said monetary instrument or property. This provision applies to both civil and criminal forfeiture cases. PART 13. Mutual Assistance Among States (a) Request for Assistance from a Foreign State If a foreign state requests assistance in investigating or prosecuting a money laundering offense, DAML may choose to execute or deny the request. If DAML decides not to execute the request, it must inform the foreign state of the reasons for the refusal or delay. The principles of mutuality and reciprocity will always be recognized in this context. (b)Powers of the DAML to Act on a Request for Assistance from a Foreign State DAML may fulfill a request for assistance from a foreign state by: Tracking, freezing, restraining, or seizing assets believed to be proceeds of unlawful activity, in accordance with the procedures outlined in this Act. Providing the necessary information to the foreign state within the framework established by this Act. Filing for a forfeiture order of any monetary instrument or property in court, provided that the request is accompanied by: An authenticated copy of the foreign court's order for the forfeiture of the monetary instrument or property belonging to a person convicted of money laundering in the requesting state. A certification or affidavit from a competent officer of the requesting state confirming that the conviction and forfeiture order are final, and no further appeal is possible. (c) Obtaining Assistance from Foreign States DAML may request assistance from foreign states for: Tracking, freezing, restraining, or seizing assets believed to be the proceeds of unlawful activity. Obtaining information related to any covered transaction, money laundering offense, or related matters. To the extent permitted by the foreign state's laws, applying to the foreign court for an order to access any premises belonging to or controlled by the individuals named in the request, to search those individuals, and/or to seize documents, materials, or objects as described in the request. The accompanying documents must be properly authenticated according to the foreign state's applicable laws or regulations. Applying for a forfeiture order for any monetary instrument or property in the foreign state's court, provided that the request is accompanied by: An authenticated copy of the forfeiture order issued by the regional trial court in Rotuma for the forfeited property of the convicted offender. An affidavit from the clerk of court confirming that the conviction and forfeiture order are final, and no further appeal is available. (d) Limitations on Requests for Mutual Assistance The DAML may refuse to comply with a request for assistance if the action sought violates any provision of the Constitution or if fulfilling the request is likely to harm the national interest of the State of Rotuma, unless there is a treaty between Rotuma and the requesting state that specifically addresses assistance in money laundering cases. (e) Requirements for Requests for Mutual Assistance from Foreign States A request for mutual assistance from a foreign state must: Confirm that an investigation or prosecution is ongoing regarding a named money launderer, or that the individual has already been convicted of a money laundering offense; Provide the reasons for the investigation or prosecution of the person for money laundering, or details about their conviction; Offer enough information to identify the individual involved; Provide sufficient details to identify any covered institution believed to have relevant information, documents, materials, or objects useful to the investigation or prosecution; Request any necessary information, documents, materials, or objects from the covered institution concerned to aid the investigation or prosecution; Specify the method and recipients for the production of the obtained information, documents, materials, or objects; Include all necessary details for the issuing of writs, orders, or other legal processes by the court in the requested state; and Contain any additional information that might facilitate the execution of the request. (f) Authentication of Documents A document is considered authenticated if it is signed or certified by a judge, magistrate, or equivalent officer from the requesting state and validated by the oath or affirmation of a witness or sealed with an official seal from a government officer in the requesting state. The certificate of authentication may also be made by an embassy or consular officer, such as a consul general or consular agent, and authenticated by the official seal of their office. (g) Extradition The State of Rotuma will negotiate to include money laundering offenses, as defined in this Act, among the extraditable offenses in all future treaties. PART 14. Penal Provisions (a) Penalties for Money Laundering The penalty for a person convicted under Part 4(a) of this Act shall be imprisonment for a period ranging from one (1) month to ten (10) years, along with a fine not less than seventy thousand USD (USD 70,000.00) but not more than twice the value of the monetary instrument or property involved in the offense. The penalty for a person convicted under Part 4(b) of this Act shall be imprisonment for a period ranging from one (1) month to five (5) years, along with a fine not less than twenty-five thousand USD (USD 25,000.00) but not more than four hundred thousand USD (USD 400,000.00). The penalty for a person convicted under Part 4(c) of this Act shall be imprisonment for a period ranging from one (1) month to two (2) years, along with a fine not less than one thousand USD (USD 1,000.00) but not more than one hundred thousand USD (USD 100,000.00), or both. (b) Penalties for Failing to Keep Records. A person convicted under Part 9(b) of this Act will face imprisonment ranging from one (1) month to one (1) year, and a fine of no less than one thousand USD (USD 1,000.00), but not exceeding one hundred thousand USD (USD 100,000.00), or both. (c) Malicious Reporting. Anyone who maliciously or in bad faith reports or files completely unjustified or false information related to money laundering transactions against another individual will be subjected to a penalty of imprisonment for one (1) month to five (5) years, along with a fine no less than five thousand USD (USD 5,000.00) but not exceeding one hundred thousand USD (USD 100,000.00). If the offender is a corporation, association, partnership, or any legal entity, the penalty will be imposed on the responsible officers, as appropriate, who participated in the offense or who knowingly permitted or failed to prevent its commission. If the offender is a legal entity, the RISA may suspend or revoke its international license. Additionally, any public official or employee who is required to testify but refuses to do so or intentionally fails to testify will face the same penalties as outlined above. (d) Breach of Confidentiality. Anyone convicted under Part 9(c) of this Act will face imprisonment ranging from one (1) month to one (1) year, and a fine of no less than one thousand USD (USD 1,000.00), but not exceeding one hundred thousand USD (USD 100,000.00), or both. Part 15. Incentive and Reward System. An incentive and reward system is hereby established, which will be granted to the relevant government agency and its personnel who led and initiated investigations, prosecutions, and convictions of individuals involved in offenses punishable under Part 4 of this Act. Part 16. Prohibition Against Political Harassment. This Act shall not be used for political persecution or harassment, nor as a tool to hinder competition in trade and commerce. Covered institutions must establish their own anti-money laundering programs in line with this Act, including but not limited to raising awareness about money laundering activities and their prevention, detection, and reporting, as well as training responsible officers and personnel of the covered institutions. Part 17. Severability Clause. If any provision or section of this Act or its application to any person or circumstance is found to be invalid, the other provisions or sections of this Act, and their application to other persons or circumstances, will remain unaffected. The provisions of this Act will not apply to deposits and investments made before the Act came into effect.