Anti Money Laundering Blog

Bangladesh Finance Minister has said that the country will enact two amendments to the existing anti-money laundering legislation to strengthen it and to prevent the flow of funds used for terrorism. The amendments will be brought in Anti Money Laundering Act 2009 and Terrorist Financing Act, 2009, including the issues of anti-money laundering and terrorist financing in the existing Extradition Act, enacting Mutual Legal Assistance Act and ratifying the UN Convention against Transnational Organised Crime (Palermo Convention) and ratifying the UN Security Council Resolutions 1267 and 1373. Last week, the Minister chaired a meting of the national coordination council to review the overall progress in drafting the amendments.

According to the press, this initiative of Bangladesh government followed warnings of international anti-money laundering organizations which consider that country’s laws to fight the increasing money laundering and terrorism financing are ‘unsatisfactory’. By this issue, the country could even be included in the group of ‘ill-prepared countries’. The Asia Pacific Group (APG), the delegation from which visited Bangladesh last month, and the Financial Action Task Force (FATF) organization have expressed their concerns over country’s non-compliance with international standards. The new legislation is necessary to let the global organizations know that Bangladesh is right on track to fight money laundering and terrorism financing. 

The government of Bangladesh has asked for the U.S. government cooperation to update its anti-money laundering and terrorist financing acts. The officials of the U.S. Department of Justice will also extend their cooperation to finalise the amendments in keeping them with the international standard. The issue between the U.S. and Bangladesh governments will be coordinated by the Asia-Pacific Group on Money Laundering (APG).

In October, the APG group will work to review Bangladesh’s progress in strengthening its positions in anti-money laundering and terrorism financing. Along with Bangladesh, APG will follow preparations of Thailand, Sri Lanka, Myanmar, Indonesia, the Philippines and Vietnam. India and Pakistan have already enacted the necessary laws and their review was completed.

The Department of Home Affairs of the Isle of Man informed all designated non-financial businesses and professionals operating in the island about the Proceeds of Crime (Money Laundering) Code 2010 that will enter into force on September 1, 2010. 

Speaking about the letter informing on the new anti-money laundering legislation, Home Affairs Minister of the British Crown Dependency said that one of the purposes of writing it was ‘to remind people of their responsibilities under anti-money laundering legislation, which was first introduced in September 2007′. Another purpose was to inform the persons and businesses required to comply with the legislation where they can access details of the new Code. He added that ‘compliance with AML laws is essential in ensuring the island is protected from people who would use it for laundering of funds for criminal or terrorist related purposes’, and for maintaining the international reputation of the island.

The Financial Supervision Commission of the Isle of Man also provided information about the update of the
Anti-Money Laundering and Countering the Financing of Terrorism Handbook, in which new guidance on the new anti-money laundering code was included. Additional amendments have been made to suit the recommendations of the International Monetary Fund.

India has been welcomed as full member of the Financial Action Task Force (FATF), and became the 34th country member of organization. Since February 2007, India has participated as an observer at FATF, having made its first steps in obtaining full membership. Since 2009, the country took important steps to meet FATF guidelines. The laws amended or passed by the Parliament of India to follow the requirements of FATF (among them the Prevention of Money Laundering (Amendment) Bill, 2009 aimed to combat money laundering, terrorist financing as well as cross-border economic offences) are now in line with FATF 40+9 recommendations, having enabled India’s entering into the organization.

US Charge d’Affaires in India Steven J White said in his comments on India’s membership in FATF that the country ‘has made significant progress over the last several years in moving toward an anti-money laundering and terrorist financing (AML/CFT) regime that meets international standards, and has committed itself to continue to improve its AML/CFT system.’

On July 13, it was discussed at an Asia/Pacific Group (APG) meeting that every country needs to have in place robust anti-money laundering and counter terrorist-financing regimes in order to effectively stem global criminal and terrorist activities.

When opening the 13th Annual Meeting of the Asia-Pacific Group on Money Laundering held in Singapore, Singapore Law Minister K Shanmugam said that no country could act alone in fighting this global problem. He said that it is not enough to have a national-level response to defeat a transnational enemy. To be successful, the regimes should be effective on all fronts from enforcement, detection and deterrence to prevention.

Shanmugam stated that the region would be much safer from criminal and terrorist elements only if jurisdictions had in place regimes capable of not only catching and penalising launderers and terrorist financiers, but also deterring them from action. However, without funding, money launderers and terrorists would not carry out their activities for long, therefore it is important to control flows of money through financial systems. Advances in technology (e.g. pre-paid cards, mobile payments, Internet payment services) had made the task of enforcement agencies and regulatory authorities more difficult because criminals had learnt to use them to their advantage.

According to Shanmugam, the Financial Action Task Force (FATF) needed to develop new ways for measuring a regime’s effectiveness in deterring financial crimes, so that they would measure the actual level of deterrence and disruption on the group.

Nepal is to sign a deal with Mongolia, Thailand and Malaysia in order to facilitate financial information exchange aimed at preventing money laundering and terrorist financing.

The Memorandum of Understanding will be signed at the 13th annual general meeting of the Asia-Pacific Group on Money Laundering (APG). The meeting will be held in Singapore from July 12-16.

In accordance with the Memorandum of Understanding, it will be mandatory for the 2 sides to provide each other financial information on bank balance, investment in real estate, shares and about persons suspected in money laundering and terrorist financing.

Also, such an agreement is to be signed between Nepal and India within a few months.

Nepal has recently asked Hong Kong to sign a Memorandum of Understanding in the light of alleged capital flight to Hong Kong in the name of importing wool.

At the APG event, Nepal will forward its opinion on compliance on anti-money laundering and combating financing on terrorism measures. The country has already enforced anti-money laundering legislation and enforced some rules regarding banks and financial institutions, insurance companies, money transfer agencies, money changers, government agencies, cooperatives and casinos.

The latest Ireland’s legislation aimed to fight money laundering has come into effect as signed by the President. The Bill was published in July 2009 and progressed quickly through the Oireachtas.

The Criminal Justice (Money Laundering and Terrorist Financing) Bill 2009 transposes the 3rd EU money laundering directive into Irish law. It enforces certain recommendations of the international anti-money laundering and anti-terrorist financing body, the Financial Action Task Force (FATF).

The Act consolidates the existing anti-money laundering and terrorist financing laws that previously have been contained mainly in the Criminal Justice Act 1994. Also, the new legislation increases the obligations of individuals and organisations as related to disclosure regarding suspected money laundering and terrorist financing.

According to Ireland’s Minister for Justice Dermot Ahern: “This new law increases the obligations on credit and financial institutions and on lawyers, accountants, estate agents and others with regard to money-laundering and terrorist financing.” He also said that similar legislation will apply throughout the EU.

On May 10, the United Arab Emirates signed new anti-money laundering agreements with 5 Arab countries

According to a UAE Central Bank’s statement, the memoranda of understanding were signed by Mohamed al-Awadi, executive director and head of Anti-Money Laundering and Suspicious Cases Unit at the UAE Central Bank, with Morocco, Jordan, Libya, Mauritania and Sudan.

The agreements were signed at a recent meeting of the Middle East and North Africa Financial Action Task Force (MENAFATF) that took place in Tunisia. They reveal the commitment of the United Arab Emirates to enhance cooperation with its global and regional partners in order to coordinate the efforts against money laundering, terrorist financing and related crimes.

It should be noted that the country has already finalized such agreements with 36 nations and organizations, which is part of its plan to conclude deals with at least 90 nations on cooperation to fight laundered money. It is also worth mentioning that the UAE is among the first jurisdictions in the region to enact anti-money laundering laws and publicly report such cases.

In 2009, a total of 1 729 suspected money laundering cases were uncovered in the UAE. The UAE Central Bank received more than 11 800 reports on cash declaration.

The International Monetary Fund (IMF) is providing held to 16 African countries to step up their fight against money-laundering and against using their lucrative gold and diamond industries for funding terrorism.

To reach this goal, the IMF offers technical assistance programs and seminars that are aimed to help African countries address institutional weaknesses. It should be noted that, in the last few years, a number of reports have raised concerns about the links between the trade in precious minerals and illicit financial flows, corruption, drug trafficking, arms smuggling and terrorist financing.

The work of the Monetary Fund is financed in large part through a multi-donor topical trust fund on Anti-Money Laundering and Combating the Financing of Terrorism (the AML/CFT TTF) launched in May 2009 contributions from the United Kingdom, Switzerland, France, Luxembourg, the Netherlands, Norway, Qatar, Saudi Arabia, South Korea, and Kuwait.

As the 1st stage of the technical assistance, representatives from 6 French-speaking African countries are taking part in a 5-day workshop held in Tunis. The workshop is jointly organized by the African Development Bank and the IMF’s Legal Department. Another workshop will be held in Tunis in June for representatives of a group of English-speaking African countries.

As the 2nd phase of the assistance, participating countries will draw up national AML/CFT strategies with support from Fund-backed experts. Continued efforts to curb money laundering and terrorist financing will be supported by IMF staff through long-term technical assistance programs.

According to the IMF’s data, Africa produces an estimated USD 19 billion in gold per year and USD 6 billion in diamonds. But an unknown amount is laundered or siphoned each year for criminal purposes. All countries that participate in the project either produce or trade in precious metals or stones, mainly gold and diamonds.

The Organisation for Economic Cooperation and Development (OECD) is planning to list tax offences as a form of money laundering.

This move could influence the position of Switzerland. If tax offences were classified as money laundering, lawyers, tax advisors, accountants and bankers engaged in such offences would get up to 3 years in prison. Also, banking secrecy law would not be acting as currently.

It should be noted that Switzerland came under pressure from the OECD in 2009, when it placed Switzerland on its “grey list” of tax havens for not being cooperative enough. To go off this list, a series of accords on sharing tax information had to be negotiated.

It was discussed that FATF blacklisted 8 countries for for alleged money laundering and terrorism. The list included Ecuador, Iran, Pakistan, Angola, Ethiopia, North Korea, Turkmenistan, and Sao Tome and Principe.

In a news conference, Ecuador protested its inclusion on this blacklist. The country does not think of itself as failing to comply with standards against money-laundering and terrorism financing.

Foreign Minister Ricardo Patino said: “We completely reject this perverse insinuation”. He noted that the country had received international praise for measures to regulate its financial system. He also added that rich countries who are judging poorer jurisdictions on their record should first of all put their own house in order. He said: “We honestly do not think the nations of the North have the moral authority to put us on that list. Let’s see in the future who should be on that list”