Anti Money Laundering Blog

It happened so that there was no law on anti money laundering and terrorism financing in Burundi and Rwanda. However, the law was long awaited.

At last, anti-money laundering and counter-terrorist financing law has been passed by both the Lower and Upper Chambers of Parliament in Rwanda. It will come into effect and become law soon if assented by the President.

This was caused by financial experts who have expressed fears that financial stability and economic prosperity can be threatened money laundering and terrorist financing.

As the law is going to be implemented, a Financial Intelligence Unit (FIU) is also to be formed in order to deal with receiving, keeping, processing, analyzing and disseminating information regarding suspicious financial transactions.

Governor Central Bank, Francois Kanimba, said that anti-money laundering and counter-terrorist financing face serious challenges in Rwanda. These challenges include the advanced science and technology, rapid economic development, and financial business innovation.

Last week, the deputy minister of finance and economic affairs Hamid Pour-Mohammadi of Iran announced that high council for fighting money laundering will be established. Hamid Pour-Mohammadi also said that the secretariat of the anti-money laundering council has been commissioned.

According to the deputy minister, several groups are planning to visit other countries in order to get acquainted with the latest achievements in anti-money laundering sphere.

The deputy minister added that as soon as the anti-money laundering council establishes the acts and laws on money laundering, the legislation in Iran will be enforced.

Pour-Mohammadi pointed out that Iran has always been pioneer in fighting money laundering, and its related laws are transparent. He noted that, unlike other countries, there is no such thing as a nameless banking account in Iran.

The legislation of the Isle of Man has been updated to ensure that it complies with international standards. The offshore jurisdiction has been distributing manuals that provide businesses advice and information on preventing money laundering to firms in the Isle of Man. The instruction guides that have been distributed offer amendments on the Criminal Justice (Money Laundering) Code 2007.

The new legislation affects firms that dealing in goods which accept cash payments of EUR 15 000 or more (or the equivalent in any currency). Accordingly, manuals have been sent to car dealerships, jewellers, estate agents, auction houses and similar businesses. The anti-money laundering manuals outline the responsibilities of these businesses and provide guidance. They also include registration/questionnaire forms which must be filled out and returned to the Department of Home Affairs by September 26, 2008. The materials included into the manuals are aimed at identifying to what extent businesses registered in the Isle of Man are required to comply with the anti-money laundering legislation.

On August 26, 2008, the Philippines House Banks and financial intermediaries committee approved a bill that would add valuable information to the country’s already existing anti-money laundering legislation.

Co-authored by Manila Rep.Jaime C. Lopez, committee chairman, and House Speaker Prospero C. Nograles, House Bill (HB) 4784 was approved and would be supplemented by provisions in HB 3053 made by Cagayan de Oro Rep. Rufus B. Rodriguez.

The new anti-money laundering bill will expand the list of institutions and persons monitored for suspicious transactions to casinos, lawyers, accountants, real estate agents and dealers of precious metals and stones.

It is worth indicating that the Philippines’ Anti-Money Laundering Council (AMLC) is now a member of the Egmont Group and it was removed from FATF’s list of non-cooperative countries and territories in February 2005.

In July, the Financial Supervision Commission of the Isle of Man announced that its Anti-Money Laundering and Countering the Financing of Terrorism Handbook has been published with the exception of Section 9.

As regards Section 9, it will be included into of the Anti-Money Laundering and Countering the Financing of Terrorism Handbook after it is drafted following with further industry consultation.

The Financial Supervision Commission announced that the new Handbook will come into effect on August 1, 2008 so that it corresponds with the coming into effect of Part 9 of the Financial Services Rule Book. According to the Commission, the Handbook will replace the Money Laundering and Prevention of Terrorism Guidance Notes (April 2003).

The European Commission has recently announced that it is stepping up legal proceedings against 15 member states as they have failed to implement the 3rd money-laundering directive into their national legislation.

According to the commission, the member states that failed to implement the rules into their national laws by December 2007 are as follows:

• Belgium,

• Czech Republic,

• Germany,

• Greece,

• Spain,

• Finland,

• France,

• Ireland,

• Luxembourg,

• Malta,

• the Netherlands,

• Poland,

• Portugal,

• Sweden,

• Slovakia.

The 3rd money-laundering directive involves the financial sector as well as lawyers, accountants, notaries, real estate agents, trusts, casinos and company service providers. The directive states that they must verify customer identity and report suspicious transactions.

The request is a reasoned opinion, however, if there is no satisfactory reply within 2 months, the European Commission may refer this matter to the European Court of Justice.

Working on fighting money laundering, on June 5, the Indian Government decided to bring casinos, credit card payment gateways run by Visa and Mastercard, money changers and transfer service providers like Western Union under the Indian law that aims at predicting money laundering.

The Indian Government is going to make the amendments to the Prevention of Money Laudering Act (PMLA). It will become mandatory for the above-mentioned financial intermediaries to report all suspected transactions that involve international transfers. This decision was taken by the Union Cabinet that is presided over by Prime Minister Manmohan Singh.

Also, a new category of offences of cross border implication will be added in order to prevent the fund transfer linked to an international crime.

Currently, only the banks and other financial institutions are obliged to report suspicious transactions  on regular basis to the financial intelligent unit (FIU) working under Finance Ministry.

The Bank Secrecy Act (1970) has previously been described as one of the basic tools of anti-money laundering enlisted US Securities and Exchange Commission. However, this important document deserves much more attention than being just mentioned on the list.

When talking about the US addressing the crime of money laundering in countless legislative acts, the Bank Secrecy Act (1970) is the document that is the first one to be discussed as the Bank Secrecy Act basically eliminates all anonymous banking in the United States of America. It establishes the basic framework aimed to prevent and fight money laundering for financial institutions.

The Act gives the Treasury Department the ability to make banks keep records. Keeping records by the banks  makes it easier to notice a laundering operation. The requirements of the Act include reporting all single transactions above USD 10 000 and multiple transactions totaling more than USD 10 000 to or from a single account in one day. It case a banker consistently violates this requirement, he can be sentenced to serve up to 10 years in prison.

So, the Bank Secrecy Act is vital in stopping the flow of laundered cash in the US.

On February 29, 2008, the Financial Action Task Force (FATF) issued Terrorist Financing Report.

This document is the study that examines the means terrorists use to raise funds and the wide range of methods they use to move money within a criminal organisation or between organisations. According to the FATF, “the adaptability and opportunism shown by terrorist organisations suggests that all the methods that exist to move money around the globe are to some extent at risk”.

The study covers and describes such problems as the terrorist requirement for funds, raising terrorist funds, moving terrorist funds, international response to terrorist financing, and policy implications.

The study identifies 4 areas to focus efforts on in order to strengthen counter-terrorist financing activities. These are addressing jurisdictional issues, outreaching to the private sector, building a better understanding across bith public and private sectors, as well as enhancing financial intelligence to use financial investigations for fighting terrorist financing.

The document was published on the FATF website on March 14, 2008.

Jersey’s new anti-money laundering rules are planned to be tightened up. Some occupations, for example, experienced financial advisors, which did not fall within current regulations, will be included into the new measures to fight money laundering.

An International Monetary Fund (IMF) inspection will assess Jersey against its standards to combat money laundering and fight terrorist financing.

The changes mean that the new categories would be checked by the Jersey Financial Services Commission (JFSC), the offshore jurisdiction’s regulator.