Anti Money Laundering Blog

On December 5, the US House of Representatives passed a bill seeking to enhance the Anti-Money Laundering Act (AMLA). However, the document’s principal author claimed that the measure has been “watered down.”

According to Cagayan de Oro Rep. Rufus Rodriguez, who authored House Bill 4275, amendments to the measure approved by the House of Representatives weakened the proposed legislation.

Rodriguez said that substantial information was removed before the approval. For example, the provision allowing the Anti-Money Laundering Council (AMLC) to look into bank accounts of suspected money launderers without informing the account holder, given there is probable cause to do so was removed from the document.
This provision was dropped because of the proposal from House Minority Leader Edcel Lagman, who wanted to give the AMLC the power to inquire into the bank account of suspected money launderers only “after due notice and hearing.” This means that the Anti-Money Laundering Council will have to secure the approval of the Court of Appeals before it can look into questionable bank accounts, a a result, the depositor will also be informed of such an action.

In the beginning of December, the US insisted that operations aimed to combat money laundering are coordinated fully with Mexico, amid controversy over a report that United States’ agents laundered drug proceeds to see how the system works.

State Department spokesman Mark Toner said that the operations aimed to disrupt money laundering networks are fully vetted and fully coordinated with Mexican authorities. Toner stressed: “The Drug Enforcement Administration (DEA) works with Mexican authorities to gather and use information about these criminal organizations to counter threats that they pose to both our countries”.

According to the Mexican government, bilateral work is done in an existing legal framework that covers activities of international authorities on the territory of Mexico.

However, many Mexican politicians want more information. The Senate security committee chairman in Mexico City, Felipe Gonzalez, said that President Felipe Calderon should report to Congress on the anti-money laundering operations. He suggested that the facts about what has been achieved in terms of arrests, seizures of funds and crime reduction should be revealed. It is worth noting that since 2006, when its government launched a major military crackdown against the powerful drug cartels, some 45 000 people have been killed in Mexico.

A consultation on proposals to amend the Money Laundering Order 2008 and the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CTF) Handbook has been launched by the Jersey Financial Services Commission (JFSC) with a view to revise customer due diligence requirements.

The Consultation Paper has been launched prior a wider review of the basis for, and scope of, customer due diligence concessions in the Money Laundering Order that will take account of international standards set by the Financial Action Task Force (FATF).

According to the Commission, proposals in the Consultation Paper will clarify the additional customer due diligence measures to be taken when a relationship with a customer is established remotely and money laundering and terrorist financing risk is considered to be higher than usually. Also, the JFSC’s reviewed proposals should provide additional guidance on identifying countries with a higher risk of money laundering or terrorist financing. The proposals in the Paper will specify some additional due diligence measures to be applied where a customer has a connection to Iran or North Korea, and where a customer is considered to present a higher risk as a result of a connection to countries like Bolivia, Kenya, Nigeria, Sri Lanka, Syria, Turkey, etc. As the risk of money laundering or terrorist financing occurring is considered to be less for a particular customer, product or service, the proposals are to extend the circumstances in which it may be appropriate to simplify customer due diligence measures.

A consultation has been begun by Hong Kong’s Securities and Futures Commission (SFC) in order to solicit public comments on proposals for a new set of guidelines on anti-money laundering and counter-terrorist financing (AML/CTF). These guidelines will replace the existing Prevention on Money Laundering and Terrorist Financing Guidance Note published by the SFC.

The guidelines seek to provide guidance to the financial industry, relating to the operation of the relevant provisions of the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO), which is to come into effect on April 1, 2012.

On July 8, 2011, the enacted AMLO was gazetted after 2 rounds of consultation that was conducted by the Financial Services and Treasury Bureau. It is aimed at enhancing the AML/CTF regime in Hong Kong financial sector with a view to meet the latest international standards, especially as regards customer due diligence (CDD) and record keeping.

The Hong Kong Monetary Authority (HKMA), SFC, Insurance Authority and the Customs and Excise Department have together drafted a set of guidelines containing generic guidance that is applicable to all financial institutions.

The government of India has concluded talks with 16 countries in order to keep a tab on flow of laundered money. The Cayman Islands, the Channel Islands, the British Virgin Islands, and the Bahamas were among these 16 jurisdictions.

However, the Indian government did not reveal the obtained information on Indians having illegal accounts in foreign banks, citing confidential clause.

The Finance Ministry commented: “The Government of India has completed negotiations of 16 new Tax Information Exchange Agreements (TIEAs) with Bahamas, Bermuda, British Virgin Islands, Isle of Man, Cayman Islands, Jersey, Monaco, Saint Kitts and Nevis, Argentina, Costa Rica, Guernsey, Macau, Liberia, Marshall Islands, Congo and Gibraltar”. The Cabinet approved 9 of these agreements. TIEAs with Bahamas, Bermuda, British Virgin Islands and Isle of Man have been signed and have come into force.

According to the Finance Ministry, “Negotiations/renegotiations of Double Tax Avoidance Agreements (DTAA) with 37 countries were completed. DTAAs with Switzerland (amendment), Norway (revised), Mozambique (new), Columbia (new), Ethiopia (new), Singapore (amended) and Tanzania (revised) have already been signed”. Also, the amendments to tax treaty with Switzerland have been signed and approved by the Swiss Parliament. It will come into force when Switzerland completes its internal process after legislative approval.

In the end of September, the Association of Certified Anti-Money Laundering Specialists (ACAMS) hosts its 10th Annual Conference at the ARIA Resort & Casino in Las Vegas. It should be noted that this is its largest gathering of anti-money laundering professionals in both the private and government sector since the association’s inception.

John Byrne, CAMS, ACAMS’ executive vice president, said: “Going into our 10th year, it’s amazing that not only has our association grown to well over 11,000 members worldwide, but that the membership has expanded so well into other industries. This conference highlights our mission that we are comprised of diverse representation from law enforcement, government regulators, bankers, securities broker dealers and money services businesses. The immense turnout only solidifies our mission of providing the best forum to bring together AML professionals for top-notch education, training and networking.”

“Additionally, the audience will hear from and have access to representatives from all of the regulatory bodies including FinCEN, the Federal Reserve, the OCC, FBI and FINRA. Meeting these speakers is essential to better understand your day-to-day challenges.”

On October 1-3, 2012, ACAMS will host its 11th Annual Conference once again at the ARIA Resort & Casino.

The Western Union Company will host the 6th annual Anti-Money Laundering & Anti-Fraud & Compliance Conference in Denver. The event will be held on September 19-22, 2011.

The event that will include more than 200 attendees is held each year for compliance and fraud professionals from across the US and Canada to provide an interactive experience in preventing fraud and money laundering.

More than 40 experts from a variety of government organizations will speak, including the Federal Trade Commission, the Financial Crimes Enforcement Network (FinCEN) of the US Treasury Department, the Financial Transactions and Reports Analysis Centre (FINTRAC) of Canada’s Ministry of Finance, the Internal Revenue Service (IRS) and law enforcement from across the US.

Joe Cachey, Western Union’s Acting General Counsel and Chief Compliance Officer said:. “This event is a unique learning experience, allowing professionals from a wide variety of financial services firms to better identify and protect their organizations against fraud.”

The conference was introduced in 2006 with a view to provide continuing education to Western Union Agents on anti-money laundering best practices, regulations and law-enforcement trends. Since then, the event has grown into one of North America’s largest anti-money laundering/anti-fraud conferences for professionals from various industries.

The German Federal Financial Supervisory Authority (BaFin), the supervisory authority for financial institutions in respect of money laundering legislation, is investigating Deutsche Bank’s business relations with the family of Malaysian potentate Abdul Taib Mahmud.

BaFin has launched investigations into the Deutsche Bank as regards its business relations with the Malaysian Taib family, which has been confirmed by the German Federal Ministry of Finance.

Finance Minister Wolfgang Schäuble, the Federal Ministry of Finance representative, stated that the Ministry requested BaFin to explain and check the situation and, if the Financial Supervisory Authority considers it appropriate, to instigate supervisory measures. The Authority has already started clarifying the situation.

The Bruno Manser Fonds, the Hamburg “Rettet den Regenwald”(Rainforest-Rescue) Association and the Society for Threatened Peoples drew the attention of the government of Germany to the Deutsche Bank’s close business ties with Abdul Taib Mahmud and demanded to freeze all Taib assets in Germany.

Since 2004, Deutsche Bank has processed transactions worth hundreds million EUR for the Sarawak government and is engaged in a joint venture in Malaysia with the Cahya Mata Sarawak company (CMS). CMS is controlled by the Taib family. CMS and Deutsche Bank are the principal shareholders of the finance company K & N Kenanga Holdings, domiciled in Kuala Lumpur, with its subsidiary Kenanga Deutsche Futures, an accredited broker at the Malaysian stock exchange.

On August 18, Philippines’ Anti-Money Laundering Council Chief Vicente Aquino asked senators to amend the law so that terrorist financing was classified as a distinct crime.

Appearing before a hearing of the Senate Finance Committee, Aquino stated that there was a need to amend the existing Anti-Money Laundering Act (Amla) in order to enable the Philippines to comply with international standards. Currently, the Philippines is classified in the group of countries whose laws and institutions are vulnerable to money laundering.

The proposed Amla amendment would make the Philippines fully compliant with the OECD, which sets the rules in international monetary system.

Under the provisions of the existing anti-money laundering legislation, the India’s Enforcement Directorate is pursuing 1 269 cases. The government is mulling amendment and strengthening of the Act aimed to combat terrorist financing and other suspect transactions.

According to Indian Minister of State for Finance S S Palanimanickam, of the 1 269 cases registered as on March 31, 2011, 11 cases fall under the Unlawful Activities (Prevention) Act, on account of their suspected connection with terrorist financing. He said: “The number of money laundering cases registered by the Directorate of Enforcement under the PMLA has increased from 1 014 cases as on March 31, 2010, to 1 269 cases as on March 31, 2011, based on Scheduled Offences registered and reported by the concerned agencies”.

Palanimanickam said: “The government is proposing amendments to the Prevention of Money Laundering Act. The proposed amendments are at a draft stage and are yet to be finalised”.

He added that India is a member of the Financial Action Task Force (FATF), the Asia/Pacific Group on Money Laundering (APG), the Eurasian group on combating money laundering and financing of terrorism and the Egmont Group of Financial Intelligence Units.