Mexico targets money laundering with plan to limit cash transactions

President Felipe Calderon proposed sweeping new measures Thursday to crack down on the cash smuggling and money laundering that allow Mexican cartels to use billions in U.S. drug profits to enrich their criminal organizations.

Legislation introduced by the Calderon administration would make it illegal to buy real estate in cash.

The new laws would also limit the purchase of vehicles, boats, airplanes and luxury goods to 100,000 pesos in cash, or about $7,700. Violators could be sentenced to five to 15 years in prison.

Criminals here are increasingly using cash transactions to launder their vast profits, according to a senior Mexican official who investigates financial crimes but spoke on the condition of anonymity because of security protocols.

The Mexican official and his counterparts in U.S. law enforcement say that billions of dollars in cash are used to buy airplanes, ranches and businesses to circumvent new Mexican laws that require banks to report large cash movements.

"This illicit money is vital for the criminal. That is what they seek, this money. It is also vital to finance their activities," said Calderon, who called the new money-laundering laws "unprecedented."

Mexican drug cartels and their Colombian suppliers generate, launder and remove from the United States $18 billion to $39 billion each year, according to the National Drug Intelligence Center. Most of this money crosses the Southwest border in plastic-wrapped bundles of $20 or $100 U.S. bank notes, stashed in tires and engine compartments of cars and trucks.

"In the criminal world, cash is king, and in Mexico you have to go after the cash if you want to disrupt their operations," said Jerry Robinette, a special agent in charge of the U.S. Immigrations and Customs Enforcement agency in San Antonio.

A recent report by Douglas Farah, a consultant for the Woodrow Wilson International Center for Scholars, concluded that "very little is effectively being done to either impede the movement of drug money into the formal economy or significantly reduce the flow of bulk cash across the U.S.-Mexico border."

U.S. and Mexican agents seize no more than 1 percent of this southbound cash, according to an analysis by The Washington Post, based on figures provided by both governments.

If passed by the legislature, Calderon's new money-laundering laws would upend common practice in Mexico, where many legitimate buyers and sellers prefer cash transactions to skirt tax bills.

As part of the $1.4 billion Merida aid initiative to Mexico, U.S. agents have trained their Mexican counterparts to detect and disrupt money-laundering operations.

The Mexican government in June announced strict restrictions on cash deposits and withdrawals made in U.S. dollars. Mexicans with bank accounts can deposit as much as $4,000 in cash per month, but Mexicans without accounts can exchange only $300 a day up to $1,500 a month Businesses can move larger amounts of U.S. dollars but the new restrictions have faced tough opposition.

Source: The Washington Post

Qatar Central Bank Strengthening Capacities to Fight Money Laundering

HE Sheikh Fahad bin Faisal al-Thani, Qatar Central Bank (QCB) deputy governor and chairman of the National Anti-Money Laundering and Terrorist Financing Committee on Sunday launched the first permanent program entitled "Strengthening Capacities to Fight Money Laundering and Terrorist Financing ".

The five-day event, which is being held at Qatar Credit Bureau, is organized by Qatar's national committee. In his opening remarks, QCB deputy governor stressed the importance of upgrading the staff involved in combating money laundering and the financing of terrorism in the light of the increased challenges posed by using modern methods knowledge in all the various criminal activities, in order to tackle the menace.

The committee's decision to adopt this program aims to train professionals and public officials to analyze and verify financial documents and understand money laundering and terror finance methodologies to counter the dangers posed by these activities, HE al-Thani said. Sincere determination is a key element to assure the effective implementation of the national programs and the measures taken to date by the Qatari authorities in this respect as well as the enforcement of internationally accepted standards against money laundering and terrorism financing , he added.

Concluding, Sheikh Fahad bin Faisal al-Thani expressed hope that the State of Qatar would have a permanent national program on financial analysis, or investigation in transaction monitoring that could develop a practical guide for the regional issues associated with money laundering and terrorist financing .

For his part the Head of Qatar Financial Information Unit (QFIU), HE Sheikh Ahmed Bin Eid Al Thani said this program is part of the National Anti-Money Laundering and Terrorism Financing Committee's strategy to counter money laundering and terrorism financing.

An important part of the program, which is being launched today, is designed to enhance the training capacities of participants from the financial and non-financial sectors, including the security services and the state law enforcement agencies. Qatar’s national anti-money laundering and combating terrorism financing committee was established in 2002 and is made up of a number of senior officials from the QCB, Ministry of Interior and Ministry of Finance among others.

The Financial Action Task Force (FATF), an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing, has hailed the remarkable progress made by the State of Qatar to combat money laundering and terrorist financing.

In October 2010, the FATF publicly welcomed the significant progress in improving the AML/ CFT regimes in Qatar and noted that its jurisdictions met their commitments in their action plans regarding the strategic AML/CFT deficiencies that the FATF had identified in February 2010.(QNA)

Source: Global Arab Network

Fiji's anti money laundering effort commended

Fiji’s initiatives for combating money laundering received regional recognition last month for making “substantial progress” in addressing deficiencies identified by the World Bank in 2006.

A delegation from the Fiji Government presented a detailed progress report on Fiji’s Anti-Money Laundering framework at the Annual Plenary Meeting of the Asia Pacific Group on Money Laundering in India last month.

Financial Intelligence Unit Razim Buksh says pressure is now put on countries to ensure global compliance with Anti Money Laundering standards that protect the domestic as well as international financial systems.

Solicitor General Christopher Pryde says restraining and forfeiture provisions, including civil forfeiture provisions, have been tested in Fiji and have resulted in a number of money laundering convictions and forfeiture of criminal assets.

Fiji’s criminal justice system was further strengthened and modernised with the introduction of a new Crimes Decree and the Criminal Procedure Decree.

Progress reports will be provided annually to the APG.

Report by : Edwin Nand

Source: FBC

Cocaine trade exacerbates money laundering in West Africa – UN Chief

The global cocaine trade, which is estimated at $85 million, is exacerbating money laundering in West Africa, Mr. Ban Ki Moon, United Nations Secretary-General has indicated.

Whiles every $1 billion of pure cocaine trafficked through West Africa earns more than ten times as much when sold on the streets of Europe, the trade is also fuelling political instability threatens the sub-region’s security, Mr Ban said.

In addition, the 61 billion dollars annual markets for Afghan opiates are used in funding insurgency, international terrorism and wider destabilization.

These were contained in a message read on behalf of the UN Chief at a ceremony held on Tuesday at Wa in the Upper West Region to mark this year’s international day against drug abuse and illicit trafficking.

Mr Ban said because the threat was so urgent, the UN had established a task force to develop a system-wide strategy to coordinate and strengthen the responses to illicit drugs and organized crime by building them into all UN peacekeeping, peace building, security development and disarmament activities.

In that way, the UN could integrate the fight against drug trafficking and other forms of organized crime into the global security and development agenda, he explained.

He said this year’s international day against drug abuse and illicit trafficking was an opportunity to highlight the importance of addressing the threats through the rule of law in the provision of health service.

“Drugs use at its core is a health issue while drug dependence is a disease and not a crime. The real criminals are the drug traffickers.

“But the supply is only half of the equation and unless we reduce the demand for illicit drugs we can never fully tackle cultivation, production or trafficking”, Mr Ban said.

In a speech read on his behalf, Naval Captain Rtd Asase Gyimah, Board Chairman of Narcotics Control Board said the Board was collaborating more with other agencies for drug law enforcement and advocated the reduction of the drug trade by exchanging ideas and sharing intelligence.

Alhaji Issahaque Salia, Upper West Regional Minister said the government was more determined now than ever to put drug traffickers and users out of business, while at the same time reducing drug related crimes.

Government was also committed to resourcing not only the Narcotic Control Board but also all security agencies to fight the drug menace.

Source: GNA

India to quantify black money, exhaustive study underway

Amid mounting pressure to unearth black money, the government on Sunday announced it has commissioned an in-depth study to quantify unaccounted income and wealth stashed within and outside the country in 16 months. The study has been undertaken by the country's three top level institutions which would also profile the activities used for money-laundering and identify the causes of black money and the sectors in which it is generated.

"So far, there are no reliable estimates of black money generated and held within and outside the country," the Finance Ministry, which commissioned the study, said.

The study will also suggest ways to detect and prevent unaccounted money, bringing it into the tax net.

Work on the study, which commenced in March, is being undertaken by the National Council for Applied Economic Research (NCEAR), National Institute of Public Finance and Policy (NIPFP) and National Institute of Financial Management (NIFM).

The first study on unaccounted money was conducted by NIPFP way back in 1985.

The ministry said that the estimates, which are not reliable, vary from USD 462 billion to USD 1.4 trillion.

Even as a joint panel of ministers and social activists, including Anna Hazare is working on the draft Lokpal Bill, yoga guru Ramdev has threatened to go on huger strike here from June 4 on the issue of black money.

The government has also constituted a committee of high-level officials, including the chief of the Central Board of Direct Taxes (CBDT), to suggest a legal framework for confiscating such wealth by declaring it as "national assets".

Last week, senior officials of CBDT met Ramdev to explain measures taken to bring back blackmoney back in the country.

The Government had earlier also constituted a committee, comprising heads of various probe agencies and specialised departments, to monitor the investigation and initiate steps to bring back black money stashed in tax havens.

Besides, the Government is also amending the existing Double Taxation Avoidance Agreements (DTAAs) with different countries and entering into Tax Information Exchange Agreements (TIEA) with tax havens.

Earlier, finance minister Pranab Mukherjee had said that the Government has adopted a five pronged strategy, including legislative reforms, to deal with the menace of black money.

Source: Hindustan Times

NZ firms linked to money laundering

by MICHAEL FIELD

Criminals are using shell companies set up under New Zealand's lax company laws to launder money.

Companies created by an Auckland firm operating out of Queen St have been linked to Russian crime, a Mexican drug cartel and Romanian extortion.

A 16-month Fairfax Media investigation has also tied companies created by Geoffrey Taylor and his sons Ian and Michael, who work out of 363 Queen St, to a company that smuggled arms out of North Korea.

The government admits there is a problem but says it has had other priorities.

The Taylor operation is not illegal, but the companies they create are connected to serious crimes in a number of countries.

They set up a shell company, Bristoll Export Ltd, that helped move part of the proceeds of a $245 million Russian tax fraud out of Moscow and into Swiss bank accounts. London-based Hermitage Capital Management hired a lawyer to find out what happened, but he died in a Moscow jail.

Hermitage chief executive Bill Browder told the Sunday Star-Times he was "highly motivated to make sure all aspects of this story see the light of day", and that he had a "treasure trove of information" about New Zealand companies' ties to the scandal.

The Taylors set up complex webs of companies, and one of them, linked to Russians in Cyprus, is administered out of a home in Albany near Auckland.

A United States Justice Department investigation into the banking giant Wachovia, also tied Taylor-linked companies to the movement of drug money. Wachovia was fined more than $202m for helping disguise the illegal origins of up to $479 billion for Mexican drug lords, predominantly the murderous Sinaloa cartel. Four Taylor companies "filtered" $50m in drug money through banks in Latvia and on to Wachovia. Each of the companies had just one director – Stella Port-Louis, 32, of the Seychelles, until recently a director of around 300 New Zealand companies.

Canada's Financial Transactions and Reports Analysis Centre, which assessed Wachovia, identified the "exploitation of New Zealand's weak company registration laws" as a problem.

International expert Martin Woods said shell companies were "ideal vehicles for money launderers, tax evaders and arms traffickers".

In 2009, a Georgia-registered cargo plane flew from North Korea to Bangkok and was found to have 35 tonnes of arms on it. The plane was chartered by SP Trading Ltd, a company set up by the Taylors.

The company's director was a Burger King cook named Lu Zhang, 29, who was later convicted of 75 breaches of the Companies Act for giving false addresses on registration forms, something she described in court as "one little mistake".

She is also a director of companies linked to Romanian Lorenzo Kiss, who is under arrest over an alleged $14.5m embezzlement.

Ian Taylor told the Sunday Star-Times media reports connected dots that weren't there.

PricewaterhouseCoopers Auckland's forensic services director Alex Tan said using company service providers had become common here.

"The money-laundering and even terrorist financing risks associated with them are high, particularly considering they can be set up over the internet."

Source: Sunday Star Times

US banks fight plan to share details abroad

A US financial crime agency’s plan to let foreign police seek information from American banks is drawing opposition from groups representing US financial institutions.


The proposed rule by the Financial Crimes Enforcement Network, a division of the treasury department, would also permit US state and local law enforcement authorities to make similar information-sharing requests of banks.

Regulations adopted after the 9/11 attacks in 2001 allow only federal law enforcement agencies, through FinCEN, to request such information.

FinCEN can require US financial institutions to search their records to determine whether they have done business with individuals suspected, based on credible evidence, of terrorism or money laundering.

Written comments on the proposed expansion of the rule were due on December 16, and more than half a dozen organisations, including the American Bankers Association and the Credit Union National Association, said the plan is intrusive.

In a 13-page letter, ABA vice-president Robert Rowe called the proposal “premature and unfounded” and said it represented a “dangerous broadening” of the information-sharing process.

“There is absolutely no indication that the extraordinary power available under the 314(a) data-match programme was ever intended by Congress to be put at the service of foreign countries,” he wrote.

The Credit Union National Association, a trade organisation that represents thousands of state and federal credit unions, said it was worried about the burden the rule would impose on its members.

FinCEN has estimated that information requests under the rule would require no more than 72 additional hours per year per institution to process. The association said many of its small members cannot afford to automate their processes.

Source: The Financial Express

Center urges Yemen to quickly pass AML legislation

The Studies and Economic Center urged on Saturday Parliament to quickly pass the anti-money laundering and terrorist financing legislation that was sent to it in November 2007.


In a letter to Speaker of Parliament, the center said the legislation delay will expose Yemen to punishable measures and a sever rebuke, after it was given a deadline by the Middle East and North Africa Financial Action Task Force until April 2010 to approve it.

The delay may also have effects on the national economy, triggering a decline in grants, in addition to losing the trust in the financial sector and then further chains would imposed on it, the center said.

The letter also urged to activate the Anti-Money Laundering and Terrorist Financing Unit at the Yemeni Central Bank and other banks and exchange firms as well as continuous training for employees at the unit to introduce them to the newest approaches to combat money laundering and terrorist financing.

A report by the task force earlier noted that Yemen had not met its commitment towards combating money laundering and terrorist financing, pointing to the partly action in this regard amid the inactive Anti-Money Laundering and Terrorist Financing Unit at the YCB.

For its part, the center said the law 35-2003 was vague and short of tackling all developed financial crimes in the globalization time. The law did not also contain criminalizing terrorist financing, it added.

Meanwhile, Yemen has only revealed 11 suspected money laundering cases, one of which was turned over to the judiciary, according to information obtained by the center.

It is worth to mention that Yemen is one of the founding states of the Middle East and North Africa Financial Action Task Force and is in charge of evaluating the commitment of countries towards fighting money laundering and terrorist financing.

Source: Saba

Russia ratifies treaty on AML actions

The Russian president has ratified the CIS treaty on anti-money laundering actions. Russian President Dmitri Medvedev has signed a federal law "On ratification of the treaty of the CIS member-states on prevention of money laundering and financing of terrorism", the news service for the Kremlin told Monday.


The signed law was adopted by the State Duma on 18 December and ratified by the Federation Council on 25 December 2009.

Source: Biz Club

Ukraine could go back on international financial blacklist in February, says financial monitoring committee

Ukraine in February 2010 could be again included on the FATF blacklist (the Financial Action Task Force), if it does not approve a new basic profile law by December 31, according to a statement posted on the Web site of the State Committee for Financial Monitoring of Ukraine.


"In spite of the seven-year active work of the Ukrainian government and the parliament and the long-awaited approval of a new basic law by 393 people's deputies in November 2009, Ukraine has been included in 25 countries, which have a real chance of getting outside the civilized financial world and feel the burden of fines," the statement reads.

According to the committee, the risks grew as the Ukrainian president had vetoed the new edition of a law on opposing money laundering and financing terrorism.

As reported, the Verkhovna Rada, Ukraine's parliament, on November 6 amended the law on money laundering, significantly expanding the list of subjects to be monitored first. The Association of Ukrainian Banks called to veto the law, considering its points to contradict a number of articles of the Constitution of Ukraine.

The Ukrainian president vetoed the law on December 8. According to the head of state, the law empowers the State Committee for Financial Monitoring with too much authority to collect information. According to the president'sestimation, such authority does not meet the realistic needs for fighting economic crime and financing terrorism.

Source: The Kyiv Post

The last two years have not been successful for FinCEN

The Annual Report of Financial Crime Enforcement Network for Fiscal Year 2009 has been released. A first look at the report shows the number of all reports received by FinCEN fell. About 16.7 million reports were filed pursuant to BSA requirement in 2009. It means there were over 1 million fewer reports in 2009 than 2008. From all the reports that FincEN receives, only the Suspicious Activity Reports (SARs) saw a very slight increase from 2008. There were 1.3 million SARs filed in 2009. SARs are reports that are filed in connection with transactions that financial institutions know, suspect, or have reason to believe may be related to illicit activity. On the other hands, the largest decrease was in the Currency Transaction Reports (CTRs). There were only 14.9 million CTRs in 2009, compared to about 16 million in 2008. CTRs are reports are that are filed for currency transactions exceeding $ 10,000.


FinCEN may consider these figures a success. However, the failures of the financial system during 2008 and 2009 tell a different story. Has FinCEN done the job according to its mission? FinCEN is an institution whose job is to enhance U.S national security, deter and detect criminal activity, and safeguard financial systems from abuse by promoting transparency in the U.S and international financial systems. The failures of 2009 and 2008 show that FinCEN has not performed well. It has not lived up to its mission. Is 2010 going to be different?

by Arben KOLA

Source: The Examiner

FATF identifies jurisdictions with strategic deficiencies

In order to protect the international financial system from money laundering and terrorist financing, the FATF has published the following public documents, identifying countries with strategic deficiencies regarding anti-money laundering and combating the financing of terrorism (AML/CFT).

• FATF Public Statement on jurisdictions with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies

The FATF has updated its public statement issued in October 2011 which identifies jurisdictions with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies.

• Improving Global AML/CFT Compliance: on-going process
  
  
  As part of its ongoing review of compliance with the AML/CFT standards, the FATF has identified jurisdictions which have strategic AML/CFT deficiencies for which they have developed an action plan with the FATF.

FATF's response to the public consultation on the revision of the FATF Recommendations

During the review process of the FATF Recommendations, which started in June 2009, the FATF consulted broadly: through two public consultations, meetings of the FATF private sector consultative forums and more focused outreach on specific technical issues. The consultation process generated a large number of responses and a broad range of opinions. While it is impossible to respond to each and every comment, the FATF has prepared a response to the key issues raised during the consultation process.

Download 

New FATF Logo

Since the creation of the current FATF logo, over a decade ago, the FATF has evolved significantly. The FATF has chosen a new logo to reflect this evolution.

The new FATF Recommendations provide authorities with stronger tools to act against criminals and address new threats to the international financial system.  The FATF mutual evaluation process has become a rigorous mechanism to assess how well the FATF Recommendations have been implemented.  Using the peer pressure of its members, the FATF follows up on evaluations to ensure that countries remedy identified deficiencies, and it can take action against countries that fail to implement adequate measures.

The work of the FATF and FATF-style regional bodies (FSRBs) has driven a profound change in global efforts to combat money laundering and terrorist financing.

The shape of the new logo, the shield, represents the tools with which authorities can safeguard their financial system from abuse.  The strength of the FATF's Recommendations and processes is further emphasized by the choice of colour.  The circle within the shield is a reference to the global nature of the FATF's work.  Over 180 countries are part of the FATF global network, including FATF members and the members of the FSRBs.  All have committed to fight money laundering, the financing of terrorism and the proliferation of weapons of mass destruction.

Henceforth, this will be the new official FATF logo.  The logo exists in an English, French and bilingual version. 

Source: FATF

FATF steps up the fight against money laundering and terrorist financing

The Financial Action Task Force, the global standard-setter in the fight against money laundering and  terrorist financing, has revised the Recommendations after more than two years of efforts by member countries. The Recommendations are used by more than 180 governments to combat these crimes. The revisions, made with inputs from governments, the private sector, and civil society, provide authorities with a stronger framework to act against criminals and address new threats to the international financial system.

The cost of money laundering and underlying serious crime is very large, estimated between 2 and 5% of global GDP.  The revision will enable national authorities to take more effective action against money laundering and terrorist financing at all levels - from the identification of bank customers opening an account through to investigation, prosecution and forfeiture of assets. At the global level, the FATF will also monitor and take action to promote implementation of the standards.

The revised FATF Recommendations now fully integrate counter-terrorist financing measures with anti-money laundering controls, introduce new measures to counter the financing of the proliferation of weapons of mass destruction, and they will better address the laundering of the proceeds of corruption and tax crimes. They also strengthen the requirements for higher risk situations and allow countries to take a more targeted risk-based  approach.

Giancarlo Del Bufalo, the President of the FATF, said:

“Adoption of the revised Recommendations demonstrates countries’ shared commitment to fight money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction.”

“The revised Recommendations include requirements for stronger safeguards in the financial sector, strengthened law enforcement tools  and improved international cooperation.” 

The main changes are:

• Combating the financing of the proliferation of weapons of mass destruction through the consistent implementation of targeted financial sanctions when these are called for by the UN Security Council. 
• Improved transparency to make it harder for criminals and terrorists to conceal their identities or hide their assets behind legal persons and arrangements. 
• Stronger requirements when dealing with politically exposed persons (PEPs).
• Expanding the scope of money laundering predicate offences by including tax crimes.
• An enhanced risk-based approach which enables countries and the private sector to apply their resources more efficiently by focusing on higherrisk areas.
• More effective international cooperation including exchange of information between relevant authorities, conduct of joint investigations, and tracing, freezing and confiscation of illegal assets. 
• Better operational tools and a wider range of techniques and powers, both for the financial intelligence units, and for law enforcement to investigate and prosecute money laundering and terrorist financing.
  
  
  Source: FATF

Outcomes of the Plenary meeting of the FATF, Paris, 15-17 February 2012

Under the Italian Presidency, the third FATF Plenary meeting of FATF-XXIII was held in Paris on 15-17 February 2012.

FATF Decisions

Adopting the revised FATF Recommendations: the International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation.

The FATF published the revised FATF Recommendations on 16 February.  The revisions, made with input from governments, the private sector, and civil society, provide authorities with a stronger framework to act against criminals and address new threats to the international financial system. 

• Press Release, 16 February 2012
• FATF Recommendations: The International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation (pdf, 1,7Mb)

The FATF took important new steps to protect the international financial system from abuse by:

• Producing two public documents as part of its ongoing work to identify jurisdictions that may pose a risk to the international financial system:
  • FATF Public Statement on jurisdictions with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies. 
  • Improving Global AML/CFT Compliance: on-going process - Jurisdictions with strategic AML/CFT deficiencies for which they have developed an action plan with the FATF  
• Publishing the FATF response to the public consultations on the revision of the FATF Recommendations
• Publishing the follow-up report to the mutual evaluation report of China    
• Publishing the Best Practices Paper on sharing among domestic competent authorities information related to the financing of proliferation. 
• Welcoming the Groupe d'Action Contre le Blanchiment d'Argent en Afrique Centrale (GABAC) as an observer. 
• Providing an update on progress made by Argentina
• Providing an update on AML/CFT Improvements in Honduras and Paraguay 

FATF Response to the public consultations on the revisions of the FATF Recommendation

During the review process of the FATF Recommendations, which started in June 2009, the FATF consulted broadly through:  two open public consultations on the proposed changes; meetings of the FATF private sector consultative forums, including civil society; and outreach to relevant experts outside the FATF on specific technical issues.  The consultation process generated a large number of responses and a broad range of opinions.  The FATF has prepared a response to the key issues raised during the consultation process.

• FATF Response to the public consultations on the revision of the FATF Recommendations (pdf, 700Kb)

Follow-up Report China

The FATF has approved and published the follow-up report for China.  The first mutual evaluation report of China was adopted in June 2007 when China became a full member of the FATF. 

China was placed on an enhanced follow-up process as a result of partially compliant and non-compliant ratings in certain of the Core and Key Recommendations in its mutual evaluation report.  China reported back at each FATF Plenary on the progress it had made in addressing the deficiencies identified in the mutual evaluation report.  China made significant progress and in October 2008, the Plenary agreed to place China on the regular follow-up process, whereby it would provide the FATF Plenary with annual progress reports.

China has now taken additional action to address the deficiencies in its AML/CFT regime and has therefore been taken off the regular follow-up process.  Henceforth, China will report back to the Plenary on any further improvements to its AML/CFT regime on a biennial basis.  The report will be made available on the FATF website shortly.

Best Practices Paper on sharing among domestic competent authorities information related to the financing of proliferation.

The FATF has adopted its first Best Practices Paper for the revised FATF Recommendations.  This Best Practices Paper focuses specifically on information sharing and exchange related to the financing of the proliferation of weapons of mass destruction.  The paper provides guidance on the implementation of Recommendation 2 ("National cooperation and coordination") and assists jurisdictions in engaging appropriate authorities in order to best exploit financial information and apply financial measures to combat proliferation. The report will be made available on the FATF website shortly.

GABAC becomes an FATF Observer

The FATF welcomed the Groupe d'Action Contre le Blanchiment d'Argent en Afrique Centrale (GABAC) as a new FATF observer organisation.  GABAC is a body of the Economic and Monetary Community of Central Africa and is made up of the six members of this community: Cameroon, Central African Republic, Chad, Congo Equatorial Guinea and Gabon.  It was established in 2000 with the mandate to combat money laundering and terrorist financing, assess the compliance of its members against the FATF Standards, provide technical assistance to its member States and facilitate international co-operation.
The co-operation between the FATF and GABAC will help to extend the FATF global network on money laundering and terrorist financing into this region of the world.

Update on progress made by Argentina

The FATF heard Argentina’s report on the progress it has made since its third follow-up report presented in October 2011.  The FATF welcomes Argentina’s enactment of a new law significantly improving Argentina’s criminalisation of terrorist financing and congratulates Argentina for its efforts.  The FATF also welcomed Argentina’s initial action plan on measures and milestones to assess Argentina’s effective implementation of its money laundering offence, and urges Argentina’s continued progress in this area for June 2012.  Argentina should also continue working to address the range of other important AML/CFT deficiencies that remain.

AML/CFT improvements in Honduras and Paraguay

Honduras

The FATF welcomes Honduras’ significant progress in improving its AML/CFT regime and notes that Honduras has largely met its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified in February 2010. Honduras is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Honduras will work with CFATF as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report, and further strengthen its AML/CFT regime.

Paraguay

The FATF welcomes Paraguay’s significant progress in improving its AML/CFT regime and notes that Paraguay has largely met its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified in February 2010. Paraguay is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Paraguay will work with GAFISUD as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report, particularly regarding further implementation of Special Recommendation VI and Special Recommendation IX.

FATF President
Paris, 17 February 2012

Source: FATF

Two Lebanese currency traders deny U.S. charges of criminal links

Two firms designated by the U.S. Treasury for their alleged roles in an international drug trafficking and money laundering ring denied Thursday involvement in illegal activities.

The U.S. government took the decision Wednesday to label Ayman Joumaa, as well as nine people and 19 companies connected with him as Specially Designated Narcotics Traffickers in a racket which reportedly netted as much as $200 million a month.

Two Lebanese currency traders, Hassan Ayash Exchange and Elissa Exchange, which were both named in the Treasury’s designation, denied knowledge of Joumaa’s activities.

“We are terribly shocked by this news. I don’t know how our company’s name got involved in this work and the reports,” Iman Kharoubi, of Elissa Exchange, told The Daily Star.

“We work in Lebanon [and The Democratic Republic of] Congo and Benin in Africa. But we do not know who Ayman Joumaa is; we don’t have anything to do with him.”

Hassan Ayash, the owner of the exchange firm, denied any wrongdoing, but did admit to knowing Joumaa, who the U.S. designated under the Kingpin Act and will now struggle to access international financial transactions.

“For us it was a surprise today to hear about this story,” Ayash told The Daily Star. “We have no knowledge of where Ayman Joumaa is currently and we have no contact with him. But we know him in person.”

Beirut’s Caesar’s Park Hotel was also designated by the Treasury after it was alleged Joumaa, the manager and CEO, “uses [the hotel] as a location to broker drug trafficking and money laundering activities.” The hotel declined to comment on the accusation.

Both exchange companies have contacted Lebanon’s Central Bank for advice following financial sanctions, but Ayash was not unduly worried about the potential negative effect U.S. punitive measures could have on business.

“Actually there would be no consequences whatsoever on our work, since our work is transparent and we work with several banks in the U.S.,” he said.

Kharoubi was less optimistic. “Our transactions are clear and transparent, but our work would be terribly affected,” he said. “Our transactions go through several U.S. banks and car companies all over the United States. Under U.S. government supervision, our products and cargos are monitored within the United States.”

Washington has said it would reconsider its financial support for Lebanese institutions if a cabinet blessed by Hezbollah is formed by Prime Minister-designate Najib Mikati.

Both firms said the financial measures taken against them were unlikely to be linked to cabinet uncertainty.

“We are not affiliated with any party in the country. I do not think that this is related to regional politics,” Kharoubi said.

“It is too early yet, since the news just came in, to actually know if there are any political and economic indications in the American reports,” Ayash added. “We cannot say whether this action is related to the recent developments in Lebanon.”

The United States has already blacklisted several Lebanese companies for their suspected links to Hezbollah. – Additional reporting by Van Megeurditchian

Source: The Daily Star

FATF Paper: The Review of the Standards – Preparation for the 4th Round of Mutual Evaluation

The Review of the Standards – Preparation for the 4th Round of Mutual Evaluation


Second public consultation
June 2011

Foreword


The FATF has now completed its third round of evaluations, and is currently conducting a review of the 40+9 Recommendations to ensure they remain up-to-date and relevant, and to learn any lessons from implementing and evaluating the current Standards. This is a limited and focused review, seeking to address any deficiencies and emerging threats but to maintain the necessary stability in the Standards as a whole.

Work on this review has been underway for two years, and between October 2010 and January 2011, the FATF undertook a public consultation on the first phase of its review of the FATF Standards. The FATF would like to thank all those who submitted comments. The response to the consultation was very significant, both in terms of the number of submissions received and their content; and the FATF greatly values this input from the private sector and civil society.

Detailed work has continued since then on a second phase of the review of the Standards, and the results of that work are set out in this paper for consultation. The FATF is committed to maintaining a close and constructive dialogue with the private sector, civil society and other interested parties, as important partners in ensuring the integrity of the financial system. Following this consultation we will take the opportunity to have further discussions on the proposed revision of the Standards with the FATF’s Consultative Forum later this year. I look forward to seeing our dialogue lead to stronger, clearer, and more effective FATF Standards.

Luis Urrutia, FATF President

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Improving Global AML/CFT Compliance: on-going process

As part of its on-going review of compliance with the AML/CFT standards, the FATF has to date identified the following jurisdictions which have strategic AML/CFT deficiencies for which they have developed an action plan with the FATF. While the situations differ among each jurisdiction, each jurisdiction has provided a written high-level political commitment to address the identified deficiencies. The FATF welcomes these commitments.

A large number of jurisdictions have not yet been reviewed by the FATF. The FATF continues to identify additional jurisdictions, on an on-going basis, that pose a risk to the international financial system. The FATF has additionally begun initial reviews of a number of other jurisdictions as part of this process and will present its findings later this year.

The FATF and the FSRBs will continue to work with the jurisdictions noted below and to report on the progress made in addressing the identified deficiencies. The FATF calls on these jurisdictions to complete the implementation of action plans expeditiously and within the proposed timeframes. The FATF will closely monitor the implementation of these action plans and encourages its members to consider the information presented below.

Angola

In February 2010, Angola made a high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies. Since then, Angola has taken steps towards improving its AML/CFT regime, including by establishing a legal framework for the FIU. However, the FATF has determined that certain strategic AML/CFT deficiencies remain. Angola should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); and (3) establishing and implementing an adequate legal framework for identifying, tracing and freezing terrorist assets (Special Recommendation III). The FATF encourages Angola to address its remaining deficiencies and continue the process of implementing its action plan.

Antigua and Barbuda

In February 2010, Antigua and Barbuda made a high-level political commitment to work with the FATF and CFATF to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic AML/CFT deficiencies remain. Antigua and Barbuda should continue to work on implementing its action plan to address these deficiencies, including by: (1) implementing an adequate legal framework for identifying and freezing terrorist assets (Special Recommendation III); and (2) continuing to improve the overall supervisory framework (Recommendation 23). The FATF encourages Antigua and Barbuda to address its remaining deficiencies and continue the process of implementing its action plan.

Argentina

In June 2011, Argentina made a high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies. Argentina has taken steps towards improving its AML/CFT regime, including by enacting amendments to its AML legislation on 17 June. Based on the initial analysis of the recent legal amendments, the FATF expressed some specific concerns that there are still shortcomings in the criminalisation of money laundering and further clarification is required. The FATF has determined that strategic AML/CFT deficiencies remain. Argentina will work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate procedures for the confiscation of funds related to money laundering and identifying and freezing terrorist assets (Recommendation 3 and Special Recommendation III); (3) enhancing financial transparency (Recommendation 4); (4) ensuring a fully operational and effectively functioning Financial Intelligence Unit and improving suspicious transaction reporting requirements (Recommendation 13, Special Recommendation IV, and Recommendation 26); (5) implementing an adequate AML/CFT supervisory programme for all financial sectors (Recommendations 17, 23 and 29); (6) improving and broadening CDD measures (Recommendation 5); and (7) establishing appropriate channels for international cooperation and ensuring effective implementation (Recommendation 36, Recommendation 40 and Special Recommendation V). The FATF encourages Argentina to address its remaining deficiencies without delay and continue the process of implementing its action plan.

Bangladesh

In October 2010, Bangladesh made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. However, the FATF has determined that certain strategic AML/CFT deficiencies remain. Bangladesh should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) implementing adequate procedures for the confiscation of funds related to money laundering (Recommendation 3); (4) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (5) improving suspicious transaction reporting requirements (Recommendation 13 and Special Recommendation IV); and (6) improving international cooperation (Recommendations 36 and 39 and Special Recommendation V). The FATF encourages Bangladesh to address its remaining deficiencies and continue the process of implementing its action plan.

Brunei Darussalam

In June 2011, Brunei Darussalam made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. Brunei Darussalam has taken steps towards improving its AML/CFT regime. However, the FATF has determined that strategic AML/CFT deficiencies remain. Brunei Darussalam will work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) establishing and implementing adequate procedures for the confiscation of funds related to money laundering (Recommendation 3); (4) improving suspicious transaction reporting requirements (Recommendation 13 and Special Recommendation IV); (5) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); and (6) enacting and implementing appropriate mutual legal assistance legislation (Recommendation 36 and Special Recommendation V). The FATF encourages Brunei Darussalam to address its remaining deficiencies and continue the process of implementing its action plan.

Cambodia

In June 2011, Cambodia made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. Cambodia has taken steps towards improving its AML/CFT regime. However, the FATF has determined that strategic AML/CFT deficiencies remain. Cambodia will work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) establishing and implementing adequate procedures for the confiscation of funds related to money laundering (Recommendation 3); (4) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); and (5) establishing and implementing effective controls for cross-border cash transactions (Special Recommendation IX). The FATF encourages Cambodia to address its remaining deficiencies and continue the process of implementing its action plan.

Ecuador

In June 2010, Ecuador made a high-level political commitment to work with the FATF and GAFISUD to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic AML/CFT deficiencies remain. Ecuador should continue to work on implementing its action plan to address these deficiencies, including by: (1) ensuring adequate criminalisation of terrorist financing (Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) implementing adequate procedures for the confiscation of funds related to money laundering (Recommendation 3); and (4) reinforcing and improving coordination of financial sector supervision (Recommendation 23). The FATF encourages Ecuador to address its remaining deficiencies and continue the process of implementing its action plan.

Ghana

In October 2010, Ghana made a high-level political commitment to work with the FATF and GIABA to address its strategic AML/CFT deficiencies. However, the FATF has determined that strategic AML/CFT deficiencies remain. Ghana should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate measures for the confiscation of funds related to money laundering (Recommendation 3); (3) establishing effective CDD measures (Recommendation 5); (4) establishing a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); and (5) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III). The FATF encourages Ghana to address its remaining deficiencies and continue the process of implementing its action plan.

Honduras

In October 2010, Honduras made a high-level political commitment to work with the FATF and CFATF to address its strategic AML/CFT deficiencies. The FATF has determined that strategic AML/CFT deficiencies remain. Honduras should continue to work on implementing its action plan to address these deficiencies, including by: (1) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (2) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); and (3) improving and broadening CDD measures (Recommendation 5). The FATF encourages Honduras to address its remaining deficiencies and continue the process of implementing its action plan.

Indonesia

In February 2010, Indonesia made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. Since February, Indonesia has taken steps towards improving its AML/CFT regime, including by issuing circulars to financial institutions in accordance with its AML law. However, the FATF has determined that certain strategic AML/CFT deficiencies remain. Indonesia should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); and (3) amending and implementing laws or other instruments to fully implement the 1999 International Convention for the Suppression of Financing of Terrorism (Special Recommendation I). The FATF encourages Indonesia to address its remaining deficiencies and continue the process of implementing its action plan.

Mongolia

In June 2011, Mongolia made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. Mongolia has taken steps towards improving its AML/CFT regime. However, the FATF has determined that strategic AML/CFT deficiencies remain. Mongolia will work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) establishing adequate procedures for the confiscation of funds related to money laundering (Recommendation 3); (4) establishing suspicious transaction reporting requirements (Recommendation 13 and Special Recommendation IV); (5) establishing a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (6) demonstrating effective regulation of money service providers. The FATF encourages Mongolia to address its remaining deficiencies and continue the process of implementing its action plan.

Morocco

In February 2010, Morocco made a high-level political commitment to work with the FATF and MENAFATF to address its strategic AML/CFT deficiencies. Since February, Morocco has demonstrated progress in improving its AML/CFT regime, including by adopting amendments to extend the scope of the money laundering and terrorist financing offences; to broaden customer due diligence requirements and taking steps to operationalise the FIU. However, the FATF has determined that certain strategic AML/CFT deficiencies remain. Morocco should continue to work on implementing its action plan to address these deficiencies, including by adequately criminalising terrorist financing (Special Recommendation II).

Namibia

In June 2011, Namibia made a high-level political commitment to work with the FATF and ESAAMLG to address its strategic AML/CFT deficiencies. Namibia has taken steps towards improving its AML/CFT regime. However, the FATF has determined that strategic AML/CFT deficiencies remain. Namibia will work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) implementing an adequate AML/CFT supervisory programme with sufficient powers (Recommendation 23 and 29); (4) ensuring a fully operational and effectively functioning Financial Intelligence Unit, in particular addressing the operational autonomy of the FIU (Recommendation 26); (5) implementing effective, proportionate and dissuasive sanctions in order to deal with non-compliance with the national AML/CFT requirements (Recommendation 17); and (6) implementing the 1999 International Convention for the Suppression of Financing of Terrorism (Special Recommendation I). The FATF encourages Namibia to address its remaining deficiencies and continue the process of implementing its action plan.

Nepal

In February 2010, Nepal made a high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies. Since then, Nepal has taken steps towards improving its AML/CFT regime, including by passing legislation aimed at addressing deficiencies with regard to criminalisation of money laundering and terrorist financing, and confiscation and provisional measures and by ratifying the TF and Palermo Conventions. However, the FATF has determined that certain strategic AML/CFT deficiencies remain. Nepal should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) implementing adequate procedures for the confiscation of funds related to money laundering (Recommendation 3); and (4) enacting and implementing appropriate mutual legal assistance legislation (Recommendation 36). The FATF encourages Nepal to address its remaining deficiencies and continue the process of implementing its action plan.

Nicaragua

In June 2011, Nicaragua made a high-level political commitment to work with the FATF and CFATF to address its strategic AML/CFT deficiencies. Nicaragua has taken steps towards improving its AML/CFT regime. However, the FATF has determined that strategic AML/CFT deficiencies remain. Nicaragua will work on implementing its action plan to address these deficiencies, including by: (1) establishing effective CDD measures and record-keeping requirements, in particular entities not currently regulated by the supervisory authority (Recommendation 5 and Recommendation 10); (2) establishing adequate STR reporting obligations for ML and FT (Recommendation 13 and Special Recommendation IV); (3) implementing an adequate AML/CFT supervisory programme for all financial sectors (Recommendation 23); (4) establishing a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); and (5) establishing adequate procedures for identifying and freezing terrorist assets (Special Recommendation III); The FATF encourages Nicaragua to address its remaining deficiencies and continue the process of implementing its action plan.

Nigeria

In February 2010, Nigeria made a high-level political commitment to work with the FATF and GIABA to address its strategic AML/CFT deficiencies. Since then, Nigeria has taken steps towards improving its AML/CFT regime, including by enacting legislation to criminalise TF and ML. The FATF has not yet assessed this law due to its very recent nature. The FATF will assess this legislation, and, in any case, Nigeria should work on addressing its deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) ensuring that relevant laws or regulations address deficiencies in customer due diligence requirements and that they apply to all financial institutions (Recommendation 5); and (4) demonstrating that AML/CFT supervision is undertaken effectively across the financial sector (Recommendation 23). The FATF encourages Nigeria to address its remaining deficiencies and continue the process of implementing its action plan.

Pakistan

In June 2010, Pakistan made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic AML/CFT deficiencies remain. The FATF is particularly concerned with the lack of implementation regarding Pakistan’s terrorist financing offence and calls upon Pakistan to demonstrate specific action. Pakistan should continue to work on implementing its action plan to address these deficiencies, including by (1) demonstrating adequate criminalisation of money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) demonstrating adequate procedures to identify, freeze and confiscate terrorist assets (Special Recommendation III); (3) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (4) demonstrating effective regulation of money service providers, including an appropriate sanctions regime, and increasing the range of ML/FT preventive measures for these services (Special Recommendation VI); and (5) improving and implementing effective controls for cross-border cash transactions (Special Recommendation IX). The FATF encourages Pakistan to address its remaining deficiencies and continue the process of implementing its action plan.

Paraguay

In February 2010, Paraguay made a high-level political commitment to work with the FATF and GAFISUD to address its strategic AML/CFT deficiencies. Since February, Paraguay has taken steps towards improving its AML/CFT regime, including issuing regulations prohibiting anonymous accounts. However, the FATF has determined that certain strategic AML/CFT deficiencies remain. Paraguay should continue to work on implementing its action plan to address these deficiencies, including by: (1) establishing and implementing adequate procedures to identify, freeze and confiscate terrorist assets (Special Recommendation III). The FATF encourages Paraguay to address this remaining deficiency and continue the process of implementing its action plan.

Philippines

In October 2010, the Philippines made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. Since February, Philippines has taken steps towards improving its AML/CFT regime, including by conducting outreach with regard to the AML regulations. However, the FATF has determined that certain strategic AML/CFT deficiencies remain. The Philippines should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) implementing adequate procedures to identify and freeze terrorist assets and confiscate funds related to money laundering (Special Recommendation III and Recommendation 3); (3) enhancing financial transparency (Recommendation 4); (4) extending coverage of reporting entities (Recommendations 12 and 16). The FATF encourages the Philippines to address its remaining deficiencies and continue the process of implementing its action plan.

Sudan

In February 2010, Sudan made a high-level political commitment to work with the FATF and MENAFATF to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic AML/CFT deficiencies remain. Sudan should continue to work on implementing its action plan to address these deficiencies, including by: (1) implementing adequate procedures for identifying and freezing terrorist assets (Special Recommendation III); (2) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (3) ensuring financial institutions are aware of and comply with their obligations to file suspicious transaction reports in relation to ML and FT (Recommendation 13 and Special Recommendation IV); and (4) implementing a supervisory programme for the regulators to ensure compliance with the provisions of the new law and regulations (Recommendation 23). The FATF encourages Sudan to address its remaining deficiencies and continue the process of implementing its action plan.

Tajikistan

In June 2011, Tajikistan made a high-level political commitment to work with the FATF and EAG to address its strategic AML/CFT deficiencies. Tajikistan has taken steps towards improving its AML/CFT regime. However, the FATF has determined that strategic AML/CFT deficiencies remain. Tajikistan will work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate procedures for the confiscation of funds related to money laundering and identifying and freezing terrorist assets (Recommendation 3 and Special Recommendation III); (3) enhancing financial transparency (Recommendation 4); (4) ensuring afully operational, and effectively functioning Financial Intelligence Unit and improving suspicious transaction reporting requirements (Recommendation 13, Special Recommendation IV, and Recommendation 26); and (5) improving and broadening CDD measures (Recommendation 5). The FATF encourages Tajikistan to address its remaining deficiencies and continue the process of implementing its action plan.

Tanzania

In October 2010, Tanzania made a high-level political commitment to work with the FATF and ESAAMLG to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic AML/CFT deficiencies remain. Tanzania should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets as well as implementing the UNSCR 1267 and 1373 through law, regulations or other enforceable means (Special Recommendation III); (3) establishing effective CDD measures (Recommendation 5); (4) establishing adequate record-keeping requirements (Recommendation 10); (5) establishing a fully operational and effectively functioning national Financial Intelligence Unit (Recommendation 26); and (6) designating competent authorities to ensure compliance with AML/CFT requirements (Recommendation 23). The FATF encourages Tanzania to address its remaining deficiencies and continue the process of implementing its action plan.

Thailand

In February 2010, Thailand made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. Since February, Thailand has taken steps towards improving its AML/CFT regime, including by issuing ministerial regulations on cash threshold transactions. However, the FATF has determined that certain strategic AML/CFT deficiencies remain. Thailand should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); and (3) further strengthening AML/CFT supervision (Recommendation 23). The FATF encourages Thailand to address its remaining deficiencies and continue the process of implementing its action plan.

Turkmenistan

In June 2010, Turkmenistan made a high-level political commitment to work with the FATF and EAG to address its strategic AML/CFT deficiencies. Since February, Turkmenistan has taken steps towards improving its AML/CFT regime, including by adequately criminalising money laundering and terrorist financing. However, the FATF has determined that certain strategic AML/CFT deficiencies remain. Turkmenistan should continue to work on implementing its action plan to address these deficiencies, including by: (1) implementing adequate procedures to identify and freeze terrorist assets without delay (Special Recommendation III); (2) ensuring a fully operational and effectively functioning FIU (Recommendation 26); (3) developing collaboration between the FIU and domestic counterparts, including supervisory authorities; and (4) strengthening international cooperation. The FATF encourages Turkmenistan to address its remaining deficiencies and continue the process of implementing its action plan.

Trinidad and Tobago

In February 2010, Trinidad and Tobago made a high-level political commitment to work with the FATF and CFATF to address its strategic AML/CFT deficiencies. Since February, Trinidad and Tobago has taken steps towards improving its AML/CFT regime, including by enacting FIU regulations and amendments to the Anti-Terrorism Act regarding freezing of terrorist assets. The FATF has not yet assessed this law due to its recent nature. However, the FATF has determined that certain strategic AML/CFT deficiencies remain. Trinidad and Tobago should continue to work on implementing its action plan to address these deficiencies, including by (1) implementing adequate procedures to identify and freeze terrorist assets without delay (Special Recommendation III); (2) implementing adequate procedures for the confiscation of funds related to money laundering (Recommendation 3); and (3) establishing a fully operational and effectively functioning FIU, including supervisory powers (Recommendation 26). The FATF encourages Trinidad and Tobago to address its remaining deficiencies and continue the process of implementing its action plan.

Ukraine

In February 2010, Ukraine made a high-level political commitment to work with the FATF and MONEYVAL to address its strategic AML/CFT deficiencies. Since that time, Ukraine has demonstrated progress in improving its AML/CFT regime, including by adopting legislation that aims to address issues relating to criminalisation of money laundering and terrorist financing and freezing of terrorist assets under UNSCR 1373. The FATF will conduct an on-site visit to confirm that the process of implementing the required reforms and actions is underway to address deficiencies previously identified by the FATF.

Venezuela

In October 2010, Venezuela made a high-level political commitment to work with the FATF and CFATF to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic deficiencies remain. Venezuela should continue to work with the FATF and CFATF on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising terrorist financing (Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendations I and III); (3) ensuring a fully operational and effectively functioning Financial Intelligence Unit, in particular addressing the operational autonomy of the FIU (Recommendation 26); (4) implementing adequate CDD guidelines for all sectors (Recommendation 5); and (5) establishing adequate STR reporting obligations for ML and FT (Recommendation 13 and Special Recommendation IV). The FATF encourages Venezuela to address its remaining deficiencies and continue the process of implementing its action plan.

Vietnam

In October 2010, Vietnam made a high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic AML/CFT deficiencies remain. Vietnam should continue to work with the FATF and APG on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) making legal persons subject to criminal liability in line with FATF Recommendation 2 or demonstrating that there is a constitutional prohibition to prevent this (4) improving the overall supervisory framework (Recommendation 23); (5) improving and broadening customer due diligence measures and reporting requirements (Recommendation 5, 13, and Special Recommendation IV); and (6) strengthening international cooperation (Recommendations 36, 40). The FATF encourages Vietnam to address its remaining deficiencies and continue the process of implementing its action plan.

Yemen

In February 2010, Yemen made a high-level political commitment to work with the FATF and MENAFATF to address its strategic AML/CFT deficiencies. The FATF has determined that certain strategic deficiencies remain. Yemen should continue to work on implementing its action plan to address these deficiencies, including by: (1) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (2) issuing substantive guidance/instructions to reporting institutions with respect to their ML/FT obligations (Recommendation 25); (3) developing the monitoring and supervisory capacity of the financial sector supervisory authorities and the FIU, to ensure compliance by financial institutions with their STR obligations, especially in relation to FT (Recommendation 23); and (4) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26). The FATF encourages Yemen to address its remaining deficiencies and continue the process of implementing its action plan.

Zimbabwe

In June 2011, Zimbabwe made a high-level political commitment to work with the FATF and ESAAMLG to address its strategic AML/CFT deficiencies. Zimbabwe has taken steps towards improving its AML/CFT regime. However, the FATF has determined that strategic AML/CFT deficiencies remain. Zimbabwe will work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation I and Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist assets (Special Recommendation III); (3) ensuring a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (4) ensuring financial institutions are aware of and comply with their obligations to file suspicious transaction reports in relation to ML and FT (Recommendation 13 and Special Recommendation IV); (5) enacting and implementing appropriate mutual legal assistance legislation (Special Recommendation V); and (6) implementing the 1999 International Convention for the Suppression of Financing of Terrorism (Special Recommendation I). The FATF encourages Zimbabwe to address its remaining deficiencies and continue the process of implementing its action plan.

Greece

The FATF welcomes Greece’s significant progress in improving its AML/CFT regime and notes that Greece has met its commitments in its Action Plan regarding the strategic AML/CFT deficiencies that the FATF had identified in February 2010. Greece is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Greece will work with the FATF in further strengthening its AML/CFT regime.

Jurisdiction not making sufficient progress

The FATF is not yet satisfied that the following jurisdiction has made sufficient progress on its action plan agreed upon with the FATF. The most significant action plan items and/or the majority of the action plan items have not been addressed. If this jurisdiction does not take sufficient action to implement significant components of its action plan by October 2011, then the FATF will identify this jurisdiction as being out of compliance with its agreed action plans and will take the additional step of calling upon its members to consider the risks arising from the deficiencies associated with the jurisdiction.

São Tomé and Príncipe

Despite São Tomé and Príncipe’s high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies, the FATF is not yet satisfied that São Tomé and Príncipe has made sufficient progress in implementing its action plan, and certain strategic deficiencies remain. São Tomé and Príncipe should work on addressing these deficiencies, including by: (1) adequately criminalising money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing a fully operational and effectively functioning Financial Intelligence Unit (Recommendation 26); (3) ensuring that financial institutions and DNFBPs are subject to adequate AML/CFT regulation and supervision, and that a competent authority or competent authorities have been designated to ensure compliance with AML/CFT requirements (Recommendations 23, 24 and 29); (4) implementing effective, proportionate and dissuasive sanctions in order to deal with natural or legal persons that do not comply with the national AML/CFT requirements (Recommendation 17); and (5) taking the necessary action to gain membership of GIABA. The FATF encourages São Tomé and Príncipe to address its remaining deficiencies and continue the process of implementing its action plan.

Source: FATF