1 / 26

Countering Money Laundering and Terrorist Financing : The International Standards

EuroMed Justice Programme Seminar 4: Financial Operations of Money Laundering Amman, 17-20 July 2006. Countering Money Laundering and Terrorist Financing : The International Standards. Rachelle BOYLE Administrator FATF Secretariat. Presentation overview. The FATF.

hoshiko
Download Presentation

Countering Money Laundering and Terrorist Financing : The International Standards

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. EuroMed Justice Programme Seminar 4: Financial Operations of Money Laundering Amman, 17-20 July 2006 Countering Money Launderingand Terrorist Financing :The International Standards Rachelle BOYLE AdministratorFATF Secretariat

  2. Presentation overview • The FATF. • The 40+9 Recommendations. • The role of key institutions. • Criminal justice issues.

  3. The FATF

  4. The FATF • Established by the G-7 Summit in Paris in July 1989 to examine measures to combat money laundering. • Originally comprised the G-7 member States, the European Commission and 8 other countries. • An inter-governmental body whose purpose is to establish international standards and promote national and international policies to combat money laundering (ML) and terrorist financing (TF).

  5. Membership of the FATF • The 33 members of the FATF and the members of the FATF-style regional bodies (FSRBs) have all directly committed to implement the FATF standards. • The Gulf Cooperation Council is a member of the FATF. • The European Commission is a member of the FATF.

  6. Membership of the FATF:The FSRBs • Together the 9 FSRBs comprise more than 150 jurisdictions. • The Middle Eastern and North African FATF (MENAFATF) is an FSRB comprising Algeria, Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates and Yemen. • Traditionally the FSRBs have been Observers. Now they may gain associate membership. 3 FSRBs are Associate Members of the FATF.

  7. The role of theFinancial Action Task Force (FATF) 40+9 Recommendations (the FATF standards) • Establish international standards to combat money laundering and terrorist financing. Mutual evaluation system • Assess compliance with the FATF standards. Typologies work • Study methods and techniques of money laundering (ML) and terrorist financing (TF).

  8. The 40+9 Recommendations

  9. The 40+9 Recommendations:A background 1990 The FATF 40 Recommendations are published. 1996 Revised to reflect evolving money laundering typologies. 2001 Expanded in October 2001 with 8 Special Recommendations on Terrorist Financing. 2003 The FATF conducted a thorough review of the Forty Recommendations. 2004 Added a 9th Special Recommendation. … the 40+9 Recommendations

  10. 40+9 Recommendations:The FATF Standards Objectives of FATF Standards • Provide a comprehensive set of measures to enable all countries to implement effective anti-money laundering (AML) / counter-terrorist financing (CFT) systems that will protect the world-wide financial system from misuse by organised crime and terrorist financiers. • Foster good governance and longer term economic development.

  11. 40+9 Recommendations:The FATF Standards The importance of these objectives • For countries: Good governance, crime reduction, financial market stability, investor confidence, revenue collection, economic growth. • For the private sector: Financial institution soundness and integrity, public confidence, market distortions / competition. • For the international community: Impacts on organised crime and terrorist networks, promotes stability of international financial markets.

  12. The 40+9 Recommendations:Overview of the standards The 40 Recommendations • Legal systems: criminalisation of money laundering, international cooperation. • Comprehensive set of preventative measures to be taken by financial institutions and non-financial businesses and professions (customer due diligence, record keeping). • Institutional framework and other measures (reporting of suspicious transactions, compliance, regulation and supervision, sanctions). • International cooperation: mutual legal assistance, extradition, information sharing.

  13. The 40+9 Recommendations:Overview of the standards (continued) The 9 Special Recommendations on Terrorist Financing • Ratify United Nations instruments. • Criminalise terrorist financing. • Freeze and confiscate assets. • Report suspicious transactions. • International cooperation. • Protect against abuse of alternative remittance systems and abuse of non-profit organisations. • Ensure originator information on wire transfers • Detect cash couriers.

  14. The roles of key institutions

  15. The 40+9 Recommendations: Coordinated action by key institutions Key institutions • Law enforcement / prosecutorial authorities. • Financial institutions and other businesses / professions. • Financial intelligence unit (FIU). • Financial sector supervisors / regulators. The importance of coordination • Effective AML/CFT systems require coordinated action by the government agencies as well as with the private sector. • International cooperation is key to effectively counter transnational money laundering and terrorist financing.

  16. The 40+9 Recommendations: The role of law enforcement and prosecutors Obligations in the 40+9 Recommendations • Criminalise ML/TF. • Freeze, seize and confiscate. • International cooperation (mutual legal assistance and extradition). The importance of fulfilling these obligations • Authorises investigation / prosecution of ML/TF offences. • Weakens criminal / terrorist organisations by taking their profits and assets. • Prevents criminals from escaping by crossing borders.

  17. The 40+9 Recommendations: The role of the private sector Obligations in the 40+9 Recommendations • Customer due diligence. • Record keeping. • Suspicious transaction reporting. • Internal controls. The importance of fulfilling these obligations • Ensures that useful information is available to law enforcement / prosecutorial authorities. • Increases transparency in the financial sector. • Deters criminals.

  18. The 40+9 Recommendations:The role of the Financial Intelligence Unit Obligations in the 40+9 Recommendations • Establish an FIU … a national centre for receiving, analysing and disseminating disclosures of suspicious transactions other relevant information concerning ML/TF. The importance of this obligation • Centralises information received from private sector entities. • Focal point for financial intelligence. • Facilitates international cooperation. • Produces value-added analysis for investigation/ prosecution. • Provides guidance to the private sector.

  19. The 40+9 Recommendations:The role of supervisors and regulators Obligations in the 40+9 Recommendations • Ensure that financial institutions are complying with the AML/CFT obligations. • Ensure that proportionate and dissuasive sanctions are available for those financial institutions that are not complying with their AML/CFT obligations. The importance of fulfilling these obligations • Facilitates detection of criminals who have infiltrated or gained control over financial institutions. • Identifies areas where more guidance is needed.

  20. Criminal justice issues

  21. Criminal justice issues • Criminalise money laundering and terrorist financing. • Freeze and confiscate criminal and terrorist assets. • International cooperation. • Government institutional framework (FIU, regulation and supervision).

  22. Criminal justice issues:Criminalise money laundering and terrorist financing Criminalise ML & TF (Recommendations 1& 2, Special Recommendation II) • At minimum, must cover 20 categories of offences and, where applicable, minimum threshold. Must also cover equivalent foreign offences. • Need effective, proportionate and dissuasive sanctions. • Must be sanctions for companies. • TF – must cover providing and collecting funds for terrorists, terrorist organisations and terrorist acts.

  23. Criminal justice issues:Freeze and confiscate criminal and terrorist assets Confiscation and freezing (Recommendation 3, SR III) • Complex but vital. • Need to go below the criminal standard of proof. • Meet the obligations set in both UNSCR 1267 & 1373. • Important to have capacity to act immediately to freeze.

  24. Criminal justice issues:International cooperation International Co-operation (Recommendations 36, 27, 38, 39 & 40, SR V) • Sign, ratify, implement 3 International Conventions. • Mutual legal assistance. • Freeze & confiscate proceeds. • Extradition - money laundering. • Other forms of cooperation between competent authorities - FIUs, law enforcement, supervisors. • Cooperation on TF.

  25. Criminal justice issues:Institutional framework Authorities powers and other issues (Recommendations 26, 27, 28, 29, 30, 31, 32, 33 & 34. SR VIII) • Powers - FIUs, law enforcement, supervisors. • Adequate structuring & resources. • Domestic cooperation / coordination. • Comprehensive statistics. • Companies / trusts – beneficial owners. • NPOs, ARS.

  26. For further information FATF website: www.fatf-gafi.org Ms. Rachelle BOYLE Administrator FATF Secretariat rachelle.boyle@fatf-gafi.org Thank you

More Related