Anti Money Laundering Blog

The Indian Banks’ Association (IBA) has joined efforts with 10 banks in order to improve the customer verification system and monitoring of transactions. This is made to check money laundering activities in India.

A working committee has been set up by IBA. The committee was headed by ICICI Bank Senior General Manager Sanjay Chaugle. Its task was preparing revised guidance notes on know your customer (KYC) and anti-money laundering operations.

Monitoring of transactions and record keeping in a more automated manner was given a particular attention. Record keeping is automated by means of creating a database for names to filter defaults. The focus will be put on a software that detects suspicious transactions.

The recent focus on anti-money laundering operations and know your customer is part of India’s efforts to join the Financial Action Task Force (FATF). India is going to share details of the legislation amendments with FATF by the end of the year 2008 in order to pave its way for the entry into this group by next year.

In June, the Financial Action Task Force (FATF) has issued a report and issued it on its website.

This is the 19th Annual Report of the FATF.

This report summarises advances made by the FATF in combating money laundering and terrorist financing. These are as follows:

- Financial Action Task Force policies on admission of new members and observers.
- Statements regarding the anti-money laundering/counter-terrorist financing risks posed in certain countries and areas.
- Evaluations of the anti-money laundering/ counter-terrorist financing systems of:
Canada;
Finland;
Hong Kong,
the United Arab Emirates
China;
Qatar;
Russia;
Singapore.
- Guidance on implementation of financial prohibitions to combat the threat of proliferation of WMD.
- Best practices for fighting trade-based money laundering.
- Guidance aimed to assist low capacity countries.
- Typologies reports on: TF methods; money laundering and TF vulnerabilities of commercial websites and internet payment systems; and, Proliferation financing.
- Report on national money laundering threat analysis strategies that assists countries with developing threat assessments.
- Closer work with the private sector.

Unity Bank Plc has decided to educate its staff skills in the area of anti-money laundering, anti-terrorist financing and know-your-customer procedures.

A statement from the bank explained that educating the staff is in fulfillment of the bank’s high ethical stance and national economic wellbeing. According to the statement, Officers of the Nigerian Financial Intelligence Unit are collaborating with Unity Bank for the extensive training.

Unity Bank will train 900 staff in these areas of its operations. 300 of them underwent the training in April and June while the remaining 600 were trained in August.

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.

On September 4, 2008, China’s central bank published a report with an announcement that it helped police uncover 89 money-laundering cases last year. These last year’s cases involved USD 4.2 billion.

According to the People’s Bank of China (PBOC), about a half of the cases were related to underground private banks. This was revealed by the bank in its China Anti-Money-Laundering Report 2007. One third of these cases happened in the southern economic powerhouse of Guangdong Province, while approximately 10% of them involved drug-related crimes.

Altogether 328 cases were investigated with the help of the PBOC.

In accordance with the report, “China has established a relatively integrated system against money-laundering in the past 5 years.

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.

On August 26, 2008, Chinese investment company director Yang Shiming was sentenced to 9 years in jail and a fine of USD 728 571 for money laundering.

It should be noted that this case is the first of that kind in the province’s capital city of Chengdu that leads the country in terms of illicit money deals.

Besides Yang Shiming, the Sichuan Province court dealt with 15 defendants that were sentenced to a range of penalties from death with 2-year probation to 4-year imprisonment for their involvement in 8 fraud cases worth 240 million yuan.

A 2-day sensitization workshop organized by the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA) based in Dakar, Senegal, was held in Monrovia. At the workshop, the participants have advanced a number of recommendations.

The sensitization workshop was held under the theme “Enlisting the Support of the Liberian Media, Civil Society Organizations and Professional Groups for GIABA’s Strategic Action Plan to Combat Money Laundering and Terrorist Financing in Liberia.”

Some of the recommendations put forward at the workshop were as follows:

- The participants wanted the Government of Liberia to enact new laws on Money Laundering and Terrorist Financing in order to correspond to international standards and best practices.

- They recommended the Government of Liberia to pass the Anti-Drugs Law in order to help curb predicated offences that lead to Money Laundering and Terrorist Financing.

- The participants called on the Government to establish structures like a Financial Intelligence Unit (FIU) that will deal with fighting against Money Laundering and Terrorist Financing.

- They recommended to increase support (training, logistics and other technical supports) to law enforcement agencies.

- The participants called on the Government to improve the monitoring of the financial sector.

- They touched upon the roles of the media, civil society and professional groups in fighting Money Laundering and Terrorist Financing, recommending to establish stakeholder networks in order to enhance coordination, awareness and sensitization on impact of the problem in Liberia.

On August 7, 2008, the government of the Isle of Man provided an update on the tax and economic cooperation treaties that it has signed with the 7 members of the Nordic Council. These are Denmark, Norway, Sweden, Finland, Greenland, Iceland, and the Faroe Islands.

The authorities of the Isle of Man explained in a statement that the parliament ratified all of the agreements on March 12, 2008, and the Isle of Man Chief Minister, Tony Brown MHK, informed each of the Nordic Council countries about the ratification.

Chief Minister said that the appropriate notifications from Greenland and Finland have been received, and the agreements between the Isle of Man and Greenland came into effect on April 11, 2008 and the agreements between the Isle of Man and Finland came into effect on June 14 2008. Norway has notified the Isle of Man that it has completed its ratification procedures, so the agreements between the Isle of Man and Norway will come into effect on August 23, 2008.

According to the Chief Minister, the Government looks forward to receiving ratification notifications from other Nordic Council countries in due course.

On August 11, 2008, the State Secretary of Finance for the Netherlands Antilles, Alex Rosaria, asked the Tax Directorate of the European Commission to take the jurisdiction off tax haven blacklists in some European states.

He said that the Netherlands Antilles is offering a leading edge financial service industry with supervision that is in line with international standards of protecting the customer.

Mr. Rosaria noted that the Netherlands Antilles is an active and a complying member of various international organizations including the Financial Action Task Force (FATF), the Caribbean Financial Action Task Force (CFATF), the OECD, and the Egmont Group.

The OECD has recognized the Netherlands Antilles as a co-operative jurisdiction. In April 2008, the seal of approval was given to the Netherlands Antilles by the Egmont Group. In its most recent Article IV Consultation, the International Monetary Fund made a conclusion that “the financial sector of the Netherlands Antilles is broadly healthy”.

Also, according to Mr Rosaria, any reference to the Netherlands Antilles being a tax haven is misguided, contradictory and unjust as far as it it were a tax haven Spain would not have signed a Tax Information Exchange Treaty with  it in June 2008.