James Kennedy
By Elilai Rengiil
In a ruling filed on October 20, the Trial Division granted part of the ROP’s request to decide the case without trial and denied Kennedy’s competing request.
The ROP sued in June 2025 to collect fines that totaled $13,000 as of April 2, 2025, and seek orders stopping Kennedy’s practice and requiring compliance. The regulations require lawyers conducting specified transactions to establish internal policies to help prevent money laundering and terrorist financing.
Kennedy failed to submit compliance policies, seek an exemption, or request an extension by December 1, 2023, the court said.
The Financial Intelligence Unit (FIU) imposed a $1,000 fine in January 2024, followed by monthly $1,000 fines beginning May 1, 2024.
Kennedy challenged the FIU’s enforcement authority, the regulations’ constitutionality, and the adequacy of notice about continuing fines.
The court rejected those arguments, finding that the Olbiil Era Kelulau lawfully delegated enforcement powers to the FIU and that its director’s appointment was constitutional.
Although a sanctions letter named another recipient, the court found Kennedy received adequate notice through his court mailbox and repeated warnings. It also rejected his claim that personal animosity drove the lawsuit, finding insufficient evidence.
However, the court declined to stop Kennedy’s law practice under the statute cited because the government had not shown his business license was first revoked, a required step.
The court did not decide the ROP’s separate request for an injunction on equitable grounds, which was not presented for consideration at this stage. A status conference is scheduled for November 6, 2026, at 1 p.m. in Courtroom 104 in Koror.