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Cross-border Transfer of Currency or Assets through Informal Systems or Networks for Use in the Financing of Terrorism . CICTE Ninth Regular Session Washington D.C., March 5, 2009. Contents. International legislation and standards on the financing of terrorism What is GAFISUD? - PowerPoint PPT Presentation
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Cross-border Transfer of Currency or Assets through Informal Systems or Networks for
Use in the Financing of Terrorism
CICTENinth Regular Session
Washington D.C., March 5, 2009
Contents
• International legislation and standards on the financing of terrorism
• What is GAFISUD? • Situation in the region• GAFISUD actions
– Best practices– Typologies– Cross-border currency control exercises
Financing of TerrorismSpecial Recommendations
I. Ratification and implementation of UN instrumentsII. Criminalizing the financing of terrorism (FT)III. Freezing terrorist asstsIV. Reporting suspicious transactions V. International cooperationVI. Alternative remittanceVII. Wire transfersVIII. Non-profit organizationsIX. Cash couriers
FT / Wire transfers
• Special Recommendation VI: Alternative remittance
• Special Recommendation VII: Wire transfers
• Special Recommendation IX: Cash couriers
Special Recommendation VI Alternative Remittance
Objective• To increase transparency in cash
movements, ensuring that jurisdictions establish anti-money laundering and terrorism financing controls, especially in those sectors outside the formal financial system.
Special Recommendation VI Alternative Remittance
Essential elements• To require wire transfer company licensing or
registration • To ensure that wire transfer companies
implement the FATF recommendations applicable to financial institutions on:– Customer identification– Record-keeping– Reporting suspicious transactions
• To implement administrative, civil, or criminal oversight and sanctioning procedures
Special Recommendation VII
Objective• To prevent easy access by terrorists and
other criminals to wire transfers to move their funds and to detect this illicit practice when it occurs.
Special Recommendation VII
Essential elements• Minimum information for accurate
identification of transfer originators• Information remains available through the
payment chain.• Scrutiny and monitoring of suspicious wire
transfer activities with incomplete originator or beneficiary information.
Special Recommendation IXObjectives
• To prevent terrorists and other criminals from financing their activities or laundering the proceeds of their crimes through cross-border transport of currency or any other bearer negotiable instrument.
• To stop or restrain cash and bearer negotiable instruments that are suspected to be related to terrorist financing or money laundering, or that are falsely declared or disclosed.
Special Recommendation IXEssential elements
• A declaration system or other disclosure obligation to detect the physical cross-border transport of currency and bearer negotiable instruments.
• Legal authority to restrain money concealed or falsely declared.
• Effective, proportionate and dissuasive sanctions against persons who make false declarations.
• Pertinent measures, including legislative ones, to confiscate currency or bearer negotiable instruments potentially related to terrorist financing or money laundering
What is GAFISUD?
MENAFATF
GAFISUD MONEYVAL
GAFIC
APG
GAFI
Working groups
DNFAPs WG
Legal WG preventive compliance monitoring WG.
Police WG
FIU WG
GAFISUD
Situation in the region
* Value assigned to each category: NC = 1 PC = 2 MC = 3 C = 4
Argentina Bolivia Brazil Chile Colombia Ecuador México Paraguay Peru Uruguay
Rec. 2nd Round 2nd Round 3rd Round 2nd Round 3rd Round 3rd ROUND 3RD ROUND 2ND ROUND
VI 1 2 4 1 2 1 2 1
VII 2 2 3 1 2 1 2 1
IX 1 2 1 1 2 1 2 1
GAFISUD Activities• Wire transfer guidelines• Guidelines on physical cross-border transport of
currency or assets• Study of GAFISUD typologies of complex asset
laundering and terrorism financing techniques• Regional currency and asset border control
exercises
Wire Transfer Guidelines
• Main measures:– Specific designation of an agency to issue regulations
and effect supervision– Licensing or registration as a prior requirement for
carrying out the activity • Minimum capital • Shareholder suitability
– Guidelines for, inter alia, customer identification, reporting suspicious transactions, maintaining transaction records, and civil, administrative, and criminal sanctions
Guidelines on Physical Cross-border Transport of Currency or Assets
Main measures:• To implement declaration system or other
disclosure obligation, whose reports are available to FIUs.
• To authorize authorities to request additional information on the origin and destination of falsely declared funds detected.
• To grant authority to retain and confiscate falsely declared funds.
• Creation of a database of over-threshold transactions.
GAFISUD typologies. Study of complex ML/FT techniques
Three key aspects (one or any combination)
• Wire transfer companies: controls may or may not be imposed in the region in accordance with international recommendations in this area
• Exchange sector: lack of or inadequate supervision and regulation in some countries of the region
• Physical cross-border transport: thresholds, or lack thereof, for currency entry and departure
GAFISUD typologies. Study of complex ML/FT techniques
• Typology name• Description: Explanation of the “money
laundering” process used by criminals in each typology.
• Alert signal: Any element that may allow for the detection of “money laundering” transactions related to the described typology.
• Example: Presentation of a generic case related to the typology.
• Example diagram: Graphic representation of the example.
Scheme
Regional Cash and Asset Border Control Exercises
• In the last two years, the GAFISUD Police Working Group conducted four currency and asset control exercises per border – Countries control entry/departure for 24 hours
at border posts and airports– Information entered in a spreadsheet and
analyzed by the Group
Regional Cash and Asset Border Control Exercises
Conclusions
• Lack of training of personnel to detect and analyze cash smuggling situations (a drug-detection approach has been taken)
• Lack of currency detection technology• Lack of departure controls (forms are
required and efforts targeted at country ports of entry)
Thank you!www.gafisud.org
José Alberto Balbuena [email protected]