Fiji -- AML/CFT Compliance Regulatory Overview

**Financial Transactions Reporting Act 2004 (FTRA 2004):** This is the foundational AML/CFT law in Fiji. It establishes the framework for reporting institutions, customer due diligence, suspicious transaction reporting, and the powers of the Financial Intelligence Unit (FIU).

**Financial Transactions Reporting (Amendment) Act 2021:**

**Financial Transactions Reporting Regulations 2000 (and subsequent amendments):** These regulations provide detailed rules and procedures for implementing the FTRA.

**Financial Intelligence Unit (FIU) Guidance Notes:** The FIU frequently issues detailed guidance notes, circulars, and advisories for various sectors, including those that might cover virtual assets or designated non-financial businesses and professions (DNFBPs), to help them comply with their obligations.

**Individual Customers:** Obtain and verify identity using reliable, independent sources (e.g., national ID cards, passports, driver's licenses). This includes full name, date of birth, residential address, and nationality.

**Legal Entities (Companies, Trusts, etc.):** Obtain and verify the entity's name, legal form, proof of existence, registered address, and the names of directors/partners/trustees.

**Beneficial Ownership:** Identify and verify the ultimate natural person(s) who own or control the customer, or on whose behalf a transaction is being conducted. For legal entities, this typically involves identifying individuals with 25% or more ownership/control.

**Purpose and Nature of the Business Relationship:** Understand the purpose and intended nature of the business relationship or transaction to assess potential risks.

**Ongoing Monitoring:** Continuously monitor the business relationship and transactions to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile. This includes monitoring for unusual or suspicious activities.

**Simplified CDD (SDD):** May be applied in low-risk situations, provided sufficient information is available to determine that the customer/transaction presents a low risk of money laundering or terrorism financing.

**Enhanced CDD (EDD):** Must be applied in higher-risk situations, which typically include:

Politically Exposed Persons (PEPs) and their family members/close associates.

Complex, unusually large transactions, or unusual patterns of transactions that have no apparent economic or lawful purpose.

Customers involved in high-risk sectors or using high-risk products/technologies (virtual assets themselves are often considered higher risk).

**Source of Funds/Wealth:** In high-risk situations, VASPs may be required to obtain information on the source of funds or wealth of the customer.

**Reporting Threshold:** There is no monetary threshold for reporting. Any transaction (including attempted transactions), regardless of value, where the VASP suspects or has reasonable grounds to suspect involves money laundering, terrorism financing, or any other criminal activity, must be reported.

**Content of Report:** STRs must contain comprehensive information about the customer, the transaction, the grounds for suspicion, and any other relevant details.

**Timing:** STRs must be submitted promptly to the FIU, typically within a few days of forming the suspicion.

**No Tipping-Off:** VASPs and their employees are strictly prohibited from "tipping off" or informing the customer or any other third party that an STR has been filed or that an investigation is underway.

**Internal Reporting:** VASPs must establish internal procedures for reporting suspicious activities to a designated AML Compliance Officer, who is then responsible for filing the STR with the FIU.

All CDD information (customer identification data, beneficial ownership information).

Transaction records (details of all virtual asset transfers, including origin, destination, value, and timestamp).

Records of internal policies, procedures, and training related to AML/CFT compliance.

Records of any risk assessments performed.

**Retention Period:** Records must be maintained for a period of **seven (7) years** following the completion of the transaction or the termination of the business relationship, whichever is later.

**Accessibility:** Records must be readily accessible to the FIU and other competent authorities upon request.

**Financial Intelligence Unit (FIU) of Fiji**

**Role:** The FIU is the central national agency responsible for receiving, analyzing, and disseminating financial intelligence reports (like STRs) related to suspected money laundering and terrorism financing. It also supervises and monitors compliance with AML/CFT obligations across all reporting institutions, including VASPs. The FIU provides guidance, conducts examinations, and has enforcement powers.

**Role:** The RBF is responsible for monetary policy, financial stability, and prudential regulation of licensed financial institutions. While they have expressed caution regarding cryptocurrencies, their direct role in licensing and prudential supervision of non-bank VASPs for AML purposes is secondary to the FIU.

**E-money/Payment Tokens:** Stablecoins that are designed to maintain a stable value relative to a fiat currency (like FJD or USD) and are intended for use as a medium of exchange could fall under the purview of the **National Payment System Act 2021**. This Act provides the legal framework for the regulation, supervision, and oversight of payment systems and payment service providers in Fiji. If a stablecoin functions like a stored-value facility and is widely accepted for payments, the RBF would likely classify it as "electronic money" or a similar payment instrument, subjecting its issuer to licensing and prudential requirements.

**National Payment System Act 2021:** This Act empowers the RBF to license and regulate payment service providers, including those issuing electronic money.

Parliament of Fiji (Search for "National Payment System Act 2021")

PacLII - Fiji Legislation (Search for "National Payment System Act 2021")

**Securities:** If a stablecoin offers an expectation of profit, represents ownership in an underlying asset or entity beyond simple fiat backing, or is marketed as an investment, it *could* potentially be classified as a security under the **Companies Act 2015** or other relevant financial markets legislation. However, this is less likely for typical fiat-backed stablecoins.

**Virtual Assets (General):** All cryptocurrencies, including stablecoins, are considered "virtual assets" under Fiji's AML/CFT framework. The **Financial Transactions Reporting Act 2004 (FTRA)** and subsequent amendments (e.g., Financial Transactions Reporting (Amendment) Act 2021) and guidelines from the Financial Intelligence Unit (FIU) apply to all Virtual Asset Service Providers (VASPs).

**Financial Transactions Reporting Act 2004:**

PacLII - Financial Transactions Reporting (Amendment) Act 2021

If a stablecoin is classified as **e-money or a similar payment instrument** under the National Payment System Act 2021, the RBF would almost certainly impose **strict reserve requirements**. This would typically include:

**Full backing:** 1:1 backing with highly liquid, low-risk assets (e.g., fiat currency in a segregated bank account, short-term government securities).

**Segregation:** Reserves must be held separately from the issuer's operational funds.

**Prudential oversight:** Regular reporting and audits to ensure compliance with reserve and other prudential standards.

These specific requirements would be detailed in subsidiary regulations issued by the RBF under the NPS Act.

**E-money/Payment Service Provider License:** If a stablecoin issuer is deemed to be providing a payment service or issuing electronic money, it would require a license from the **Reserve Bank of Fiji** under the National Payment System Act 2021. This licensing process involves rigorous checks on capital, governance, risk management, and AML/CFT compliance.

**VASP Registration/Licensing (AML/CFT):** Any entity providing services related to stablecoins (e.g., exchange services, custody, transfer) would be classified as a Virtual Asset Service Provider (VASP) and would be subject to registration and ongoing compliance obligations under the **Financial Transactions Reporting Act 2004** and the guidance issued by the **Financial Intelligence Unit (FIU) of Fiji**. This includes customer due diligence (CDD), transaction monitoring, and reporting suspicious activities.

If a stablecoin is regulated as **e-money or a payment instrument**, strong **redemption rights** would be a mandatory requirement. The issuer would be legally obligated to redeem the stablecoin for its equivalent fiat value (e.g., FJD) at par, upon request by the holder, without undue delay, and typically without excessive fees. This is a fundamental consumer protection principle for e-money. The National Payment System Act 2021 and its subsidiary regulations would stipulate these rights.

Given Fiji's general cautious approach and the absence of specific stablecoin legislation, there are **no specific rules or frameworks for algorithmic stablecoins**. It is highly probable that algorithmic stablecoins, due to their inherent volatility and lack of full fiat backing, would not qualify as "electronic money" or a permissible payment instrument under current or future RBF regulations. The RBF would likely view them with extreme skepticism and strong warnings would be issued against their use or issuance within Fiji. They would likely be considered high-risk virtual assets for AML/CFT purposes.

The **Reserve Bank of Fiji has publicly stated its interest in exploring a Central Bank Digital Currency (CBDC)**. The RBF is in the research and consultation phase regarding the potential benefits and risks of issuing a digital Fijian dollar.

Should Fiji decide to issue a CBDC, it would be a direct liability of the RBF and would operate as a sovereign digital currency. A CBDC would likely interact with private stablecoins by either:

**Coexisting:** Private stablecoins could operate alongside a CBDC, potentially filling niches or offering specific functionalities not provided by the CBDC.

**Replacing/Competing:** A successful CBDC could reduce the demand for private stablecoins, especially those pegged to FJD, by offering a superior, risk-free digital form of the national currency.

The regulatory approach to private stablecoins might become even more stringent or clearer once the RBF solidifies its CBDC strategy.

**Approach:** **Cautious and restrictive by default.** There is no dedicated legal framework for the licensing or regulation of Virtual Asset Service Providers (VASPs). The Reserve Bank of Fiji (RBF) views virtual assets with skepticism, primarily focusing on the associated risks (consumer protection, financial stability, illicit financing). While holding or personal trading of crypto is not explicitly illegal, operating a crypto-related business without fitting into existing, traditional financial licenses (which is challenging) is effectively restricted. Cryptocurrencies are **not considered legal tender** in Fiji.

**Reserve Bank of Fiji (RBF):**

**Role:** The central bank and primary regulator of financial services and payment systems in Fiji. The RBF monitors developments in virtual assets and has issued public warnings regarding their risks. Any new financial product or service, including those related to virtual assets, would typically require prior approval from the RBF.

**Website:** Reserve Bank of Fiji

**Role:** Responsible for receiving, analyzing, and disseminating financial intelligence related to money laundering and terrorist financing. The FIU's mandate would extend to virtual asset activities if they fall under the scope of "financial transactions" as defined by AML/CTF legislation.

**Website:** Fiji Financial Intelligence Unit

**Date:** 1983 (with subsequent amendments)

**Role:** Establishes the Reserve Bank of Fiji and outlines its powers and responsibilities regarding monetary policy, financial system stability, and regulation of financial institutions. It provides the RBF with the authority to oversee and potentially restrict new financial products or services that could pose risks.

**Reference:** While a direct URL to the Act itself might require searching the Fiji Parliament website for current consolidated laws, the RBF operates under this mandate.

**Financial Transactions Reporting Act 2004 (FTRA):**

**Date:** 2004 (with subsequent amendments, e.g., 2012, 2023)

**Role:** This is Fiji's primary AML/CTF legislation. It requires reporting entities (which typically include banks, financial institutions, money remitters, etc.) to report suspicious transactions to the FIU. While it doesn't explicitly mention "virtual assets," if a VASP or crypto-related business were deemed a "financial institution" or conducted "financial transactions" under this Act's definitions, they would fall under its reporting obligations.

**Reference:** The latest consolidated version can often be found on the Fiji Parliament website or through legal databases. A general search for "Fiji Financial Transactions Reporting Act" will yield relevant information.

**Proceeds of Crime Act 1997:**

**Date:** 1997 (with subsequent amendments)

**Role:** Provides for the confiscation of proceeds of crime and related matters. This Act would apply to any criminal activity involving virtual assets, just as it would for traditional assets.

**Reference:** Similar to the FTRA, consolidated versions are usually available via government legal portals.

**Crypto Trading (Personal):** There is no explicit ban on individuals buying, selling, or holding cryptocurrencies for personal use. However, users operate at their own risk, with no regulatory protections or recourse within Fiji's legal framework.

**Crypto Exchanges and VASPs:** This is where the "restrictive by default" approach becomes apparent.

**No Dedicated Licensing:** Fiji does not have a specific licensing regime for cryptocurrency exchanges or other Virtual Asset Service Providers (VASPs).

**RBF Approval Required:** The Reserve Bank of Fiji's stance is that any entity offering new financial products or services must obtain **prior approval** from the RBF. Given the RBF's cautious approach and the lack of a clear regulatory framework for virtual assets, obtaining such approval for a dedicated crypto exchange is highly unlikely under existing traditional financial licenses.

**AML/CTF Obligations:** Even if a crypto-related business were to operate, it would be subject to the AML/CTF obligations under the Financial Transactions Reporting Act (FTRA) and oversight by the FIU, depending on how its activities are classified.

**Warnings:** The RBF has consistently issued warnings to the public about the risks associated with investing in or using virtual assets, including price volatility, lack of consumer protection, cybersecurity risks, and potential for fraud and illicit activities.

**Adoption:** Fiji has adopted the framework for regulating VASPs and applying AML/CFT obligations to them, which includes the principles of the FATF Travel Rule. This is primarily done through amendments and interpretations of its existing AML/CFT legislation and supplementary guidance issued by the RBF.

**Financial Transactions Reporting Regulations 2010 (FTRR):** Provides detailed rules and procedures under the FTRA.

**RBF AML/CFT Guidelines:** The Reserve Bank of Fiji issues various guidelines to financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs), which now extend to VASPs.

**Effective Date:** While there isn't a single "Travel Rule effective date," VASPs were brought under the AML/CFT regulatory scope as Fiji updated its framework in response to FATF recommendations. The RBF issued specific guidance on Virtual Assets and VASPs to clarify their obligations.

The FATF's 2022 Follow-Up Report for Fiji noted improvements in Recommendation 15 (New Technologies), upgrading its rating to "Largely Compliant," indicating progress in bringing VAs and VASPs into the AML/CFT framework.

Fiji's AML/CFT framework generally aligns with FATF standards. For the Travel Rule, the threshold for collecting and transmitting originator and beneficiary information typically mirrors the FATF's guidance:

**USD/EUR 1,000 (or equivalent in Fijian Dollars - FJD):** This is the usual threshold for transactions where VASPs must obtain and transmit required originator and beneficiary information.

Transactions below this threshold are still subject to suspicious transaction reporting obligations.

**Exchanges:** Virtual-to-virtual and fiat-to-virtual asset exchanges.

**Transfer services:** Providers that facilitate the transfer of virtual assets.

**Custodians:** Entities holding or administering virtual assets or instruments enabling control over virtual assets on behalf of others.

**Issuers:** Providers involved in issuing new virtual assets (e.g., Initial Coin Offerings - ICOs).

Any other entity that engages in or operates a business of exchanging, transferring, holding, or underwriting virtual assets.

**Information Collection:** For transactions exceeding the threshold, VASPs must obtain and hold:

Originator's wallet address (if not directly linked to the VASP account)

Originator's physical address OR national identity number OR customer identification number OR date and place of birth

Beneficiary's wallet address (if not directly linked to the VASP account)

**Information Transmission:** The originating VASP must transmit the required originator and beneficiary information to the beneficiary VASP during or before the virtual asset transfer.

**Information Holding:** VASPs must securely store all collected information for at least **five (5) years**, in line with general AML/CFT record-keeping requirements.

**Interoperable Solutions:** While Fiji's legislation or guidance may not prescribe a specific technical solution (e.g., TRISA, Sygna, VerifyVASP, etc.), VASPs are expected to adopt reliable and secure methods to meet these data collection and transmission requirements.

**Risk-Based Approach:** VASPs are expected to implement a risk-based approach to identify and mitigate ML/TF risks, including those associated with transfers to/from unhosted wallets.

**Monetary Penalties:** Substantial fines for individuals and corporate entities.

**Imprisonment:** For individuals involved in serious breaches or deliberate non-compliance.

**Loss of License/Registration:** VASPs failing to comply may face revocation of their operating license or registration.

**Reputational Damage:** Significant harm to the business's reputation and trust.

**Suspension or Prohibition:** Regulatory authorities can suspend operations or prohibit individuals from holding positions in VASPs.

**Reserve Bank of Fiji (RBF) AML/CFT Page:**

The RBF website is the primary source for official AML/CFT guidelines and legislation. You will find publications under their "Publications" or "Supervision" sections.

URL: https://www.rbf.gov.fj/ (Navigate to "Publications" -> "AML/CFT" or "Laws and Regulations")

Often available on the Fiji government legislative website or via the RBF.

*Direct link might vary, search for "Financial Transactions Reporting Act 2004 Fiji" on the RBF site or Fiji's Attorney-General's Chambers website.*

**FATF Mutual Evaluation Reports for Fiji:**

These reports provide detailed assessments of Fiji's AML/CFT regime, including progress on Recommendation 15.

**Fiji's 2nd Follow-Up Report & Technical Compliance Re-Rating (2022):**

(Look for the specific assessment of Recommendation 15 and Immediate Outcome 7 within the full report document.)