Anti Money Laundering Blog

On February 24, 2010, Pakistan’s Senate standing committee on finance unanimously approved the Anti-Money Laundering and Combating Terrorism Financing Bill 2009. The approved legislation is aimed at effectively checking suspicious business transactions used for terrorist financing.

The committee which, under the chairmanship of Ahmed Ali, gave formal approval of the bill linked the approval of the Bill with a condition that the Ministry of Finance and committee would together prepare proposed amendments in the Anti-Money Laundering and Combating Terrorism Financing Act within a year.

The Anti-Money Laundering and Combating Terrorism Financing Ordinance is to expire on March 26, 2010, therefore, due to the urgency of the issue, the proposed bill should have been passed by the Senate as soon as possible. As the Bill has been approved by the Senate, it will be sent to Prime Minister to obtain necessary approval to have a status of a law.

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”

On February 19, the US Treasury Department said in a statement that a global anti-corruption body has blacklisted 8 countries for alleged money laundering and terrorism financing as well as stepped up calls for sanctions against Iran.

The Treasury Department welcomed the FATF statements noting: “We also welcome FATF’s renewed call today for its members and all jurisdictions to apply effective counter-measures to protect their financial sectors from the money laundering and terrorist financing risks emanating from Iran.”

The Financial Action Task Force (FATF) has identified 8 countries that have strategic deficiencies in alleged money laundering and terrorism financing. This inter-governmental body named Iran, Pakistan, Angola, Ecuador, Ethiopia, North Korea, Turkmenistan, and Sao Tome and Principe as they may be posing a risk to the international financial system.

A review mechanism will be set up by the Middle East and North Africa Financial Action Task Force (MENAFATF) in order to help the banking system and private sector to identify indicators, trends and threats of both money laundering and terrorist financing.

On January 10, when speaking at a workshop in Doha, Sheikh Ahmed bin Eid al-Thani, chairman of Qatar Finance Intelligence Unit, said that the event aimed to share experiences of the participants so that a mechanism could be finalized.

Many suspected cases that have not reached the level of money laundering have been received by the Qatar Finance Intelligence Unit in Qatar. However, he noted that the final decision will be for the prosecution and the courts.

Adek al-Kulaish, executive secretary of MENAFATF, said that the risk of money laundering and financing terrorism exists and threatens all countries. He noted that it was difficult to estimate the volume of money laundering and terrorism financing as precise figures are absent. He stated, “There are no figures on the global-level, with the exception of a study by the International Monetary Fund in 2003, but that has not been updated”.

Saudi Arabia has a number of measures underway aimed at rooting out terrorism, particularly financing of terrorist organisations and money laundering. This was announced by Dr Ahmed bin Mohammed Al Salem, Undersecretary of the Ministry of Interior.

On November 14, Al Salem addressed the closing session of the 10th Conference on Transnational Crime that was organised by the Crans Montana Forum and held in Paris. Al Salem said Saudi Arabia is opposed to all forms of terrorism and that it will continue its crackdown on criminals intending to disrupt the peace and stability of the country.

Also, he said that Saudi Arabia abides by all international resolutions connected with combating terrorism. The government of Saudi Arabia has signed bilateral agreements with other countries on combating terror funding and money laundering.

Recently the European Union Committee of the House of Lords, UK Parliament, published the Report on “Money laundering and the financing of terrorism”, where asked the UK Government to investigate how piracy and laundering the proceeds of crime are used for the financing of terrorism.

In the opinion of the UK Government, there is no link between piracy and terrorism financing, but the Committee has another point of view. They suggest that paying of a ransom to pirates should not be a criminal offence, but shipowners must seek consent for the payment, as the authorities must know in advance the amount that is being paid, to whom and where.

It is noted in the report that the success of fight against money laundering depends on the institutions providing reports of suspicious activities to the Serious Organised Crime Agency (SOCA). The EU Committee considered the influence on private sector organisations of making all the Suspicious Activity Reports (SARs) to SOCA, having pointed out that banks and other private sector institutions give large sums and resources to make these reports. The Committee expressed its concern that private sector organisations do not receive enough information about how and where the reports’ data is used. The conclusion made by the Committee was that only increased feedback will help to persuade the regulated sector of economy of the value of efforts to comply with the SARs regime.

Another factor to have an impact on money laundering is sharing information about the movement of money and about suspicious bank accounts. The Committee pointed out that the first comprehensive international treaty covering the prevention of money laundering and the financing of terrorism is the Warsaw Convention on Money Laundering and Terrorist Financing, which is not yet signed by the UK. The members of the Committee call on the UK Government to sign and ratify it as soon as possible.

Another reason for Government’s critics in the report is failing to implement the EU Framework Decision on mutual recognition fo confiscation orders, while confiscation is one of the best methods of combating money laundering.

The United Arab Emirates and Montenegro signed a Memorandum of Understanding providing for joint co-operation in combating money laundering and terrorist financing. The document was signed as a result of the meeting held by Sultan Nasser Al Suweidi, Governor of the UAE Central Bank and Chairman of the National Anti-money Laundering Committee, with a delegation from Montenegro led by Predrag Mitrovic, the Director of the Administration for the Prevention of Money Laundering.

Memorandum of Understanding signed by two countries implies the exchange of financial information between them regarding money laundering and financing of terrorism, and consolidation of their strategies in fighting money laundering. According to the UAE Central Bank, the conclusion of the MOU means “the UAE’s sincere desire to pursue cooperation with the international community in the fight against these two crimes.”

The document was signed by Predrag Mitrovic and Abdulrahim Mohamed Al Awadi., the Assistant Executive Director and Head of Anti-Money Laundering and Suspicious Cases Unit (AMLSCU), UAE Central Bank.

On the 12th Annual Meeting of Asia/Pacific Group (APG) on Money Laundering, special attention is paid to the measures needed to be done to stop the flow of money through charities and non-profit organizations to terrorists.

During the opening ceremony of the week-long conference, the Home Affairs Minister of Australia Brendan O’Connor addressed the delegates saying that terrorism has become a transnational problem over the past decade, posing risks to international financial systems and global security, and that terrorist groups are funded not only through the drug trade and fraud, but also through legitimate sources such as charitable organizations and business profits. In his speech the Minister said that “The Asia/Pacific Group on Money Laundering plays a vital role in the fight against money laundering and terrorism financing.” 

Opposition spokesman James Wood talked on the importance of the mechanisms to prevent Australia allowing terrorist groups to launder money in the country. In his turn, Mr. O’Connor informed that new legislation has been introduced to strengthen the criminal asset confiscation regime with unexplained wealth provisions.

The 12th AGP Conference was opened on July 7, 2009 in the Brisbane Convention Centre, and the same day the federal government of Australia released a publication for non-profit organizations to help them safeguard against terrorism financing.

The conference consists of 40 delegations, including China and, for the first time, Papua New Guinea. Among the observers on the conference, there are the Australian Crime Commission, the World Bank and the International Monetary Fund.

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.