Anti money laundering presentation

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AML/CFT Issues in Tajikistan: 

AML/CFT Issues in Tajikistan Cari Votava World Bank / UNODC AML/CFT Mentor Senior Financial Sector Specialist 11World Bank Central Asia Regional Office 41 Kazybek bi Street, Building A Almaty, Kazakhstan 050100 tel: +7-327-298-0580 fax: +7-327-298-0581 email: cvotava@worldbank.org

AML/CFT Risks in Tajikistan: 

AML/CFT Risks in Tajikistan Major drug-trafficking route Economy & financial sector growing Weak governance & financial sector supervision Large informal market sector & cash-based economy Surrounding countries implementing AML/CFT systems

Costs of money laundering & terrorism: 

Costs of money laundering & terrorism “States that don’t fight corruption & money laundering, are allowing these resources to be used to support these crimes.” Financial & economic stability Human security Uneven playing field for honest businesses Increased costs of doing business Promotes corruption Lowers tax base Undermines social welfare cost burden paid by poor

International Obligations of Tajikistan : 

International Obligations of Tajikistan UN SC Resolutions 1267 & 1373, et al. UN Conv. Against Trafficking of Narcotics & Psychotropic Substances, 1988 UN Convention for Suppression of Terrorist Financing, 1999 UN Convention Against Transnational Organized Crime, 2000 UN Anti-Corruption Convention

International Best Practices: FATF 40 + 9 Recommendations : 

International Best Practices: FATF 40 + 9 Recommendations Properly criminalize ML/TF offenses (legal definitions & dissuasive penalties) Create & operationalize financial intelligence unit (FIU) Preventative measures Suspicious transaction reporting obligations FIU (CDD/KYC, etc) Supervisory oversight of compliance, sanction non-compliance Legislative measures to allow: wide X-border legal assistance to facilitate investigations, seizures, arrests and prosecutions Sufficient domestic inter-agency cooperation National AML/CFT strategic plan with clear goals & system for on-going evaluation & improvement Egmont membership

International AML/CFT Structures: 

International AML/CFT Structures FATF & FATF-Style Regional Bodies support implementation of international AML/CFT standards conduct Mutual AML/CFT Evaluations typologies research Eurasian Group “EAG” (created Nov. 2004) Chair: Russia; Deputy Chair: Kyrgyzstan Working Groups: Legal: Mutual Evaluation process & issues (1st round 2007) Technical Assistance: Donor Coordination & Training Typologies: Publications & training on trends/methods Evaluator Training 2006 Russian AML/CFT Training & Methodological Center Annual Public-Private Sector Dialogue Meeting Annual Donor Coordination Meetings Egmont Group

Technical Assistance Needs Assessments : 

Technical Assistance Needs Assessments World Bank UNODC/Mentor (Jan. 2005) EAG (Nov. 2005) EBRD / IMF (Nov. 2006)

UNODC AML/CFT Mentors: 

UNODC AML/CFT Mentors

World Bank/UNODC AML/CFT Mentor Program in Central Asia: 

World Bank/UNODC AML/CFT Mentor Program in Central Asia ‘Role & Function of FIU’ Workshops Monthly full-day training sessions on technical implementation: KG, KZ & UZ (2005-2006) Support & advise EAG on all training programs Participate in all EAG TA Needs Assessments Donor Coordination Coordinate all training with EAG Monthly AML/CFT Newsletter (email) Quarterly AML/CFT Donor Meetings (KZ)

Technical Assistance programs (2004 – 2006): 

Technical Assistance programs (2004 – 2006) Legislative drafting assistance (multiple donors) EBRD/SECO/EU: AML Workshop, Dushanbe (Sept. 2005) ------------------------------------------ EAG Eval. Training, Moscow: (Dec. 2005, Mar, 2006 & June 2006) EAG: Training for FIU staff, Moscow (March 2006) UNODC/UNDP/OSCE: Int’l Cooperation in Criminal Cases, Ashgabad, (March 2006) AML/CFT Judges Training Judges, Almaty, (May 2006) IMF Seminar: Terrorist Financing, Italy (May 2006) EAG: AML/CFT Workshop, St. Petersburg (May 2006) EAG Working Group Mtg., Issyk Kul (Aug. 2006) EBRD: AML Workshop, Bishkek (Oct 2006) EAG AML/CFT Private Sector Mtg., Moscow (Dec. 2006) EAG Donor & Working Group Mtgs., Moscow (Dec. 2006)

Challenges: 

Challenges Impetus for AML/CFT lacking at political level Resources Dissipation of technical assistance and training Counterpart official or authority (Min Income & Revenues?) Inter-agency coordination requires direction and delegation of authority of government Legal framework: intention for current draft law ? Action plans for AML/CFT efforts in 2007

Opportunities: 

Opportunities High donor interest due to AML/CFT risks AML/CFT is field of “global mutual learning” AML/CFT effectiveness: sharing info & knowledge transfer vital No shortage of Various AML/CFT implementation models FIU types Russian-speaking experts Willingness to share expertise “Global chain only as strong as it’s weakest link”

AML/CFT systems exist in: 

AML/CFT systems exist in Russia Ukraine Georgia Baltics Central Europe Balkans

AML/CFT Concerns: 

AML/CFT Concerns Weak banking sector Perceived trust in financial sector low Potential harm to banking sector Misuse of FIU & confidential financial data

Recommendations: 

Recommendations Clear indication of political will or desire to implement AML/CFT framework Workshop on ‘Role & Function of FIU’ One-year action plan Clearly delegated roles & responsibilities Designate official responsible for monitoring, evaluation, on-going improvement Delegate official with sufficient capacity, time and resources Commission Inter-Agency Work Group to carry out Action Plan

Recommendations - 2: 

Recommendations - 2 Draft & send TA “wish list” Donors & EAG Use AML/CFT Evaluation Report to revise Action Plan & Wish List Finalize AML/CFT draft law & send to Parliament for enactment Consider institutional location of FIU and to whom it will report Continue regular donor coordination to avoid further waste of donor resources

acronyms: 

acronyms AML: anti-money laundering CFT: countering the financing of terrorism UN: United Nations FATF: Financial Action Task Force Against Money Laundering ML/TF: money laundering/terrorist financing FIU: financial intelligence unit EAG: Euroasian Group (FATF-Style Regional Body) UNODC: UN Office for Drugs and Crime TA: Technical Assistance EBRD: European Bank for Reconstruction & Development SECO: IMF: International Monetary Fund

Thank you for your attention: 

Thank you for your attention Cari Votava World Bank / UNODC AML/CFT Mentor Senior Financial Sector Specialist 1818World Bank Central Asia Regional Office 41 Kazybek bi Street, Building A Almaty, Kazakhstan 050100 tel: +7-327-298-0580 fax: +7-327-298-0581 email: cvotava@worldbank.org