Archive for the ‘Anti-Terrorist Financing’ Category

HK to introduce new Anti-Money Laundering Guidelines

Wednesday, February 1st, 2012

Following the release of a set of consultation conclusions, Hong Kong’s Securities and Futures Commission (SFC) has announced the gazetting of a new set of anti-money laundering and counter-terrorist financing guidelines. The new guidelines will take effect on April 1, 2012.

The new guidelines will replace the existing Prevention on Money Laundering and Terrorist Financing Guidance Note published by the SFC. They are 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).

On July 8, 2011, the enacted AMLO was gazetted after 2 rounds of consultation conducted by Hong Kong’s Financial Services and Treasury Bureau. Its is aimed at enhancing the anti-money laundering and counter-terrorist financing regime in Hong Kong’s financial sector, whoch is neede in order to meet the latest international standards, especially in respect of customer due diligence (DD) and record keeping.

On September 30, 2011, the SFC launched a consultation and welcomed comments on the then-proposed guidelines, and then received submissions until November 18. In general, respondents found the guidelines helpful.

Jersey to revise Due Diligence requirements

Friday, November 25th, 2011

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.

Hong Kong consults on AML and CTF Guidelines

Thursday, October 6th, 2011

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.

Canada needs better information sharing to fight Money Laundering

Tuesday, March 8th, 2011

According to an evaluation of anti-money laundering and anti-terrorist financing regime of Canada over the past decade, government authorities still do not share enough information among themselves.

A private consulting firm presented to the Finance Department the report suggesting that a lack of proactive disclosures from Canada’s financial intelligence unit hampered efficiency.

The report criticizes Canada as being on high alert for suspicious transactions from countries in North Africa and the Middle East.

According to this report, the inefficiencies in the regime’s efforts related to the Financial Transactions and Reports Analysis Centre of Canada stem from the tight rules under which the agency has to operate. The report says: “The efficiency of the regime has improved, particularly since 2008, but inefficiencies were found related to the full use of FINTRAC proactive disclosures”. It adds that “these stem from organizational mandates and perhaps the allocation of regime funds, and limitations in information sharing attributable to certain legislative and regulatory provisions.”

The current evaluation says that FINTRAC, an independent agency operating in accordance with rules set out in the Process of Crime and Terrorist Financing Act, needs consent from the Office of the Superintendent of Financial Institutions in order to share some particular information with other regime partners. It should be reminded that Canada’s anti-money laundering regime was set up in 2000, and in 2001 the anti-terrorist financing mandate was added.

IMF evaluated Guernsey’s Regulatory Regime in terms of Money Laundering

Tuesday, January 18th, 2011

The International Monetary Fund (IMF) has published 6 reports that were the result of the evaluations held by the Fund in March and May 2010. These were evaluations on Guernsey’s financial supervision and criminal justice frameworks that concerned anti-money laundering and counter-terrorist financing in the jurisdiction.

In accordance with the reports, Guernsey has financial sector regulation and supervision of a high standard across all sectors. These reports take into consideration Guernsey’s well-positioned basis for an effective Anti-Money Laundering/Combating the Financing of Terrorism regime, with preventative measures in line with the Financial Action Task Force (FATF) Recommendations.

As part of the IMF’s global Financial Stability Assessment Program, the evaluations were produced that assessed the jurisdiction as having a high level of compliance with the international standards. The standards were as follows:
–    the 25 Basel Core Principles for Effective Banking Supervision;
–    -the 28 Insurance Core Principles of the International Association of Insurance Supervisors;
–    the FATF 40 Recommendations on money laundering and 9 Special Recommendations on terrorist financing.

The 6 reports have been welcomed by the Guernsey government and the Financial Services Commission.

Guernsey’s Chief Minister Lyndon Trott said: “The regulatory framework and the Bailiwick’s anti-money laundering and combating the financing of terrorism regime that is now in place have been important factors in both sustaining Guernsey’s economy and developing and maintaining Guernsey’s international reputation as an excellent place to do business. This in turn has been an important driver in the continuing development of Guernsey’s international identity.”

It is worth mentioning that the reports also re-assessed the work of the Financial Investigation Unit (GBA/Police), the Law Officers Chambers and all the member organisations of the AML/CFT Advisory Committee, and reported the achievement of high international standards.

FATF publishes Report on New Payment Methods used for Money Laundering

Wednesday, January 5th, 2011

In October 2010, the Financial Action Task Force (FATF) published a report entitled Money Laundering Using New Payment Methods.

This report builds on the 2006 Typologies report on New Payment Methods (NPMs). It should be noted that there has been a significant increase in the number of transactions and the volume of funds moving through new payment methods (NPMs) since 2006. As a result, the number of discovered cases where such payment systems were misused for money laundering (ML) and/or terrorist financing (TF) purposes has gone up.

The report that can be downloaded from the FATF website compares the “potential risks” described in the 2006 report to the “actual risks” based on new case studies and typologies. A number of indicators of suspicious activity are described in the paper to help new payment methods service providers and other financial institutions to detect money laundering/terrorist financing activities. The FATF document describes the challenges faced by national legislators and regulators in these terms.

The Money Laundering Using New Payment Methods report was the result of analysis of questionnaire responses and publications about NPMs. Also, relevant private sector representatives such as NPM service providers (including the Internet payment sector, the mobile payment sector and prepaid card technology providers) made a significant input.

Anti-money Laundering legislation of Bangladesh to be strengthened

Saturday, September 11th, 2010

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.

India became full member of the Financial Action Task Force

Tuesday, August 17th, 2010

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.’

Strong Regimes required to fight Money Laundering & Terrorist Financing

Thursday, July 15th, 2010

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 to sign Anti-Money Laundering Agreement with Mongolia, Thailand and Malaysia

Monday, July 5th, 2010

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.