Title: State%20Bank%20of%20Pakistan%20National%20Seminar%20on%20Anti-Money%20Laundering%20and%20Counter%20Terrorist%20Financing
1State 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
2Introduction
- The APG
- Regional challenges in combating money laundering
and terrorism financing - Regional vulnerabilities typologies
- Risks of not responding
- Meeting the challenges
3The 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 APGs main roles are the implementation of
the AML/CFT global standards and the regional
assessment of compliance.
4The 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.
5APG Members
- The APG presently consists of 28 members
- Australia Marshall Islands, Republic of the
- Bangladesh Mongolia
- Brunei Darussalam Nepal
- Cambodia New Zealand
- Chinese Taipei Niue
- Cook Islands Pakistan
- Fiji Islands Palau
- Hong Kong,China Philippines
- India Samoa
- Indonesia Singapore
- Japan Sri Lanka
- Korea, Republic of Thailand
- Macau,China United States of America
- Malaysia Vanuatu
6New members expected in 2005 Canada Myanmar La
o PDR Vietnam
7APG RELATIONSHIPS WITH INTERNATIONAL AND REGIONAL
ORGANISATIONS
APEC Asia/Pacific Economic Cooperation
ASEAN Association of South East Asian Nations
ARF ASEAN Regional Forum
ASEM Asia Europe Meetings
ADB Asian Development Bank
IMF International Monetary Fund
APG Asia/Pacific Group on Money Laundering
EGMONT GROUP OF FIUs
THE WORLD BANK
WCO World Customs Organisation
UNODC United Nations Office on Drugs Crime
OCO Oceania Customs Organisation
Pacific Islands Forum
UNCTC United Nations Counter Terrorism Committee
APG Observers
Key
8Regional 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
9- 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
10- 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
11- 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
12- Significant levels of other
- profit-driven crime
- People smuggling and human trafficking
- Arms trafficking
- Fraud
- Smuggling
- Other profit driven crimes eg Illegal logging
13- 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
14- 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
trade-based money laundering typologies
15- 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
16Risks 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
17APG 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
18Meeting 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
19Meeting the ChallengesCapacity 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
20Meeting 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
21Useful 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
22Useful sources for typologies information
- APG typologies reports
- http//www.apgml.org/content/typologies_repor
ts.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/
23- For more information contact the APG Secretariat
via - mail_at_apgml.org