Anti Money Laundering Blog

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.

Fiji’s Financial Intelligence Unit (FIU) has signed a Memorandum of Understanding with Indonesian Financial Transaction Reports and Analysis Centre for closer networking over anti-money laundering and counter terrorism financing; now Fiji’s FIU is expected to enter into more anti-money laundering agreements with foreign counterparts in its fight against financial crimes.

It became clear from the words of the Director of the FIU Razim Buksh, who said in his comments after signing the document that the organisation plans to sign similar MOUs with other financial intelligence units and foreign law enforcement authorities.

The signed MOU with Indonesia’s Financial Center, by comments of the Director of the FIU, will facilitate the partners in exchange of information relevant to the investigation and prosecution of money laundering, terrorism financing and other serious criminal offences. He added that the MOU itself provides a basis for stronger networking and co-operation with foreign counterparts concerning persons or entities Fiji may investigate for suspected involvement in any financial crimes.

Fiji’s FIU is a member of the Egmont Group, an international organisation comprising many financial intelligence units and anti money laundering institutions.

The Anti-Money Laundering Council of Philippines is preparing legal framework which seeks to fully comply with international standards and affirm country’s commitment against money-laundering and terrorist financing. Amando M. Tetangco, Jr., AMLC head and the Governor of Bangko Sentral ng Pilipinas (BSP), in the statement said that the inter-agency body has moved to address deficiencies in the Anti-Money Laundering Act of 2001, and the Human Security Act of 2007, as identified in a report co-written by the World Bank. By his words, they need to continually enhance their systems to meet new challenges.

The head of the Central Bank of Philippines also noted that Philippine authorities, especially the financial regulators, are aware of the risks, including new ones that might arise as a result of the global financial crisis.

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.

Millions of dollars are being spent each year by organizations on their compliance programs. Nevertheless, many senior executives have become frustrated because, despite the high costs of implementing compliance programs, little business value is seen. The only business value probably is being able to pass an annual audit.

In May 2009, TONBELLER, a company that provides financial crime and compliance solutions to enable banks, insurance companies and other financial service providers to control the defense and to evolve strategies against money laundering, terrorism financing and internal/external fraud , conducted their survey. This was the survey on anti-money laundering and fraud entitled “Mind the Gaps”. The survey captures the points of view of 152 leading compliance professionals from 41 countries around the world.

These are some of the key findings of the report:

Only 36% of respondents said their organizations had integrated their anti-fraud and anti-money laundering efforts enterprise wide.

With 31% internal fraud has emerged as the top priority among fraud crimes; this may be a consequence of the current economic climate.

91% of the participants see a business value in adopting the risk-based approach irrespective of the regulation in their country.

According to the Financial Action Task Force (FATF), football is being used as a vehicle for money laundering.

The report issued by the FATF warns the public that football is at risk from criminals who buy clubs, transfer players and bet on the sport.

Also, the agency’s report provides an insight into tax evasion in football in UK.

It should be noted that concerns over human trafficking, corruption, drug trafficking and tax crime in the sport were raised in the report. Two previously unpublished examples of tax evasion from footballers in the UK are provided in the report, and it is indicated that in both cases the clubs were complicit in the scam.

Alltogether, more than 20 cases of football-related money laundering were detected by the FATF. The report used the information based on responses to a questionnaire received in October 2008 from government and football authorities in 25 countries.

It is important that the report provides recommendations for how football can cope with risks of money laundering as well as highlights a risk that is associated with Internet gambling.