Brunei

Brunei has a prosperous economy that depends heavily on revenue from natural resource extraction but encompasses a mixture of foreign and domestic entrepreneurship, government regulation, welfare measures, and village tradition. Crude oil and natural gas production account for 60% of GDP and more than 90% of exports. Per capita GDP is among the highest in Asia, and substantial income from overseas investment supplements income from domestic production. For Bruneian citizens the government provides all medical services and free education through the university level. The government of Brunei has been emphasizing through policy and resource investments it strong desire to diversify its economy both within the oil and gas sector and to new sectors.

Brunei is not a regional financial center and does not have free trade zones. Brunei has a small offshore financial center and its proximity to high crime regions, along with its large foreign worker population and limited anti-money laundering/counter-terrorist financing   (AML/CFT) institutional capacity, make it vulnerable to cross-border criminal activity. Domestically, Brunei is a low threat country for money laundering and terrorist financing. Proceeds of crime generally originate from fraud, gambling, the drug trade, and fuel smuggling. Brunei has experienced an increase in cybercrime and financial fraud such as pyramid schemes and e-mail scams.

Law enforcement officers and prosecutors are hampered by a lack of capacity and gaps in the legal framework. The Government of Brunei  (GOB) committed to strengthening its AML/CFT regime by approving an amendment order in July 2010 that includes stronger KYC rules. Since this order does not address designated non-financial businesses and professions (DNFBPs), the GOB should draft notices to cover DNFBPs as well. Additionally, only money changer and remittance companies are obliged to report cash transactions above B$5,000 (approximately $3,850). New reporting procedures for banks have been proposed but are yet to be adopted. The GOB has developed an action plan to address its deficiencies by adequately criminalizing money laundering and terrorist financing; enhancing measures to confiscate assets and freeze terrorist funds; expanding the suspicious transactions reporting regime; and improving the mutual legal assistance authorities.

The legal and enforcement framework that regulate money laundering still suffer defects. Brunei’s criminalization of money laundering is arguably inefficient and limited to predicate offenses that have an imprisonment term of not less than five years. This high threshold results in the exclusion of many offenses as money laundering predicate offenses. Brunei should expand the scope of the money laundering offense to cover the widest range of predicate offenses in order to meet the international standards.