Transcript State Bank of Pakistan National Seminar on Anti-Money Laundering and Counter Terrorist Financing

State Bank of Pakistan
National Seminar on Anti-Money
Laundering and Counter Terrorist
Financing
Anti-Money Laundering and Terrorist
Financing Activities in the Asia/Pacific
Region
Rick McDonell
Head, Asia/Pacific Group on Money
Laundering (APG) Secretariat
Islamabad
29 March 2005
The Asia/Pacific Group on Money
Laundering (APG)
Introduction
• The APG
• Regional challenges in combating money
laundering and terrorism financing
• Regional vulnerabilities – typologies
• Risks of not responding
• Meeting the challenges
The Asia/Pacific Group on Money
Laundering (APG)
The APG
• The APG is the FATF-style regional body for
the Asia/Pacific region.
• The APG does not set the standards against
money laundering and terrorist financing.
• Those standards are global and are set by the
FATF in their 40 + 9 Recommendations.
• The APG’s main roles are the implementation
of the AML/CFT global standards and the
regional assessment of compliance.
The Asia/Pacific Group on Money
Laundering (APG)
The APG
• As an essential part of its role, the APG
coordinates AML/CFT technical assistance
and training across the Asia/Pacific region.
• The APG also works closely with other
international and bodies involved in various
legal, financial regulatory and law
enforcement aspects of AML/CFT.
• The APG undertakes typologies work to study
methods and trends of money laundering.
The Asia/Pacific Group on Money
Laundering (APG)
APG Members
The APG presently consists of 28 members:
Australia
Bangladesh
Brunei Darussalam
Cambodia
Chinese Taipei
Cook Islands
Fiji Islands
Hong Kong,China
India
Indonesia
Japan
Korea, Republic of
Macau,China
Marshall Islands, Republic of the
Mongolia
Nepal
New Zealand
Niue
Pakistan
Palau
Philippines
Samoa
Singapore
Sri Lanka
Thailand
United States of America
Malaysia
Vanuatu
The Asia/Pacific Group on Money
Laundering (APG)
New members expected in 2005:
Canada
Lao PDR
Myanmar
Vietnam
The Asia/Pacific Group on Money
Laundering (APG)
APG RELATIONSHIPS WITH INTERNATIONAL
AND REGIONAL ORGANISATIONS
ADB
APEC
ASEAN
ARF
Asia/Pacific Economic
Cooperation
Association of
South East Asian Nations
ASEAN Regional
Forum
Asian
Development Bank
ASEM
Asia Europe
Meetings
IMF
International
Monetary Fund
EGMONT
GROUP
OF FIU’s
Asia/Pacific Group on
Money Laundering
WCO
UNODC
World Customs
Organisation
United Nations Office on
Drugs & Crime
OCO
Oceania Customs
Organisation
Key:
APG
APG Observers
UNCTC
United Nations Counter
Terrorism Committee
The Asia/Pacific Group on Money
Laundering (APG)
THE
WORLD
BANK
Pacific
Islands
Forum
Regional Challenges in
AML/CFT
Specific vulnerabilities include:
•
•
•
•
•
•
Relatively low institutional capacity
Corruption (particularly in developing countries)
Major drug producing centres in region
High use of alternative remittance systems
Extensive use of cash and high value items
Serious terrorist activity and on-going threats
The Asia/Pacific Group on Money
Laundering (APG)
Low levels of institutional
capacity
• Large number of developing countries in
the region
• Diversity in the levels of institutional
development across the region
• Many countries are working hard to
develop legal and governance structures
The Asia/Pacific Group on Money
Laundering (APG)
Corruption
• Corruption generates enormous profits to be
laundered
• Corruption is a key factor in both predicate criminal
activities and money laundering
• Systemic corruption undermines regulatory and
legislative AML/CFT regimes
• Systemic corruption undermines institutional
development
The Asia/Pacific Group on Money
Laundering (APG)
Major drug production centres
and trafficking points in the region
• Heroin, opium, amphetamine type substances
(including precursor chemicals), ecstasy, cannabis
• Increasing domestic drug consumption within Asia,
particularly heroin & amphetamine type stimulants.
• Major drug transport ‘hubs’ and drug distribution
points
The Asia/Pacific Group on Money
Laundering (APG)
Significant levels of other
profit-driven crime
• People smuggling and human trafficking
• Arms trafficking
• Fraud
• Smuggling
• Other profit driven crimes – eg Illegal logging
The Asia/Pacific Group on Money
Laundering (APG)
High use of cash and alternative
remittance systems (ARS)
• ARS has a legitimate role in many countries to
remit monies to/from developing countries
• Cash economies and large ARS sectors are
highly vulnerable to exploitation for money
laundering and terrorist financing
• Cash couriers seen as a particular vulnerability
• Cash economies and ARS reflects relatively low
levels of trust in regulated financial sector
The Asia/Pacific Group on Money
Laundering (APG)
Cash and alternative remittance
systems typologies
• Use of informal channels (ARS and cash / gold
smuggling) is a common typology to remit
money - often mingling legitimate remittances
and ‘black’ monies
• ARS and cash couriering linked to other tradebased money laundering typologies
The Asia/Pacific Group on Money
Laundering (APG)
Serious terrorist activity &
on-going terrorists threats
• Terrorist acts occurring across the region
• High use of informal channels for terrorist financing
(especially ARS & cash couriers)
• Terrorists using non-profit organisations for raising
and moving terrorist funds
• Terrorists identifying and exploiting ‘weak link’
economies
The Asia/Pacific Group on Money
Laundering (APG)
Risks of
non-compliance
• Increased criminal and terrorist
activity
• Stability of the banking system
& reputation damage
• Negative economic effects
• Sanctions / threat of actions by the international
community
• Weak links attract money launderers and terrorists
• National security issues
The Asia/Pacific Group on Money
Laundering (APG)
APG Regional Progress
• AML Laws
In 1995, 5 jurisdictions
In 2005, over 30 jurisdictions
• FIUs
In 2005, 17 APG member or observer
jurisdictions have an established FIU
The Asia/Pacific Group on Money
Laundering (APG)
Meeting the Challenges
APG Mutual Evaluations
• Provide peer reviews of compliance with the
global standards by relevant experts from
member countries’ legal, financial and law
enforcement systems
• Includes suggesting areas for improvement and
technical assistance through mutual feedback
The Asia/Pacific Group on Money
Laundering (APG)
Meeting the Challenges
Capacity Building
Technical Assistance and Training
• Regional coordination role for AML/CFT through the
APG Donor & Provider Group
• Resources such as model laws, training programs,
mentoring etc
• Country projects via multilateral & bilateral
cooperation
• Regional projects involving e.g. ADB, IMF, World
Bank, UNODC, Commonwealth Secretariat
The Asia/Pacific Group on Money
Laundering (APG)
Meeting the Challenges
Regional linkages to global initiatives
• Maintaining close links with the international community
• Keeping members up to date with international standards
• Participating in global standard setting
• Engaging in typologies research of methods and emerging
trends – eg APG has an ongoing Typologies Working Group
and an Annual Typologies Workshops of money laundering
experts
• Proposed Regional Workshop
The Asia/Pacific Group on Money
Laundering (APG)
Useful websites
For more information on AML/CFT visit:
APG - www.apgml.org
FATF - www.fatf-gafi.org
UNODC Global Programme Against Money Laundering
- www.unodc.org/money_laundering.html
The Egmont Group of FIUs
- www.egmontgroup.org
The Asia/Pacific Group on Money
Laundering (APG)
Useful sources for
typologies information
• APG typologies reports
http://www.apgml.org/content/typologies_reports.jsp
• FATF typologies reports
http://www.fatf-gafi.org/
• Egmont Group of FIUs – 100 Case Studies
http://www.ncis.co.uk/fiu.asp
• International Narcotics Control Strategy Report
(INCSR) 2005
http://www.state.gov/g/inl/rls/nrcrpt/2005/
The Asia/Pacific Group on Money
Laundering (APG)
For more information contact
the APG Secretariat via
[email protected]
The Asia/Pacific Group on Money
Laundering (APG)