FINANCIAL INTELLIGENCE CENTRE

1
FINANCIAL INTELLIGENCE CENTRE

• Briefing to the Portfolio and Select Committees
  on Finance
• MEMORANDUM OF UNDERSTANDING
• OF THE
• EASTERN AND SOUTHERN AFRICAN ANTI-MONEY
  LAUNDERING (ESAAMLG)
• 25 JUNE 2002

2
FINANCIAL INTELLIGENCE CENTRE

• Objectives of the Briefing
• To brief the Committees on the Approval by
  Cabinet for the signing of the Eastern and
  Southern African Anti-Money Laundering Group
  ESAAMLG Memorandum of Understanding within the
  context of
• The establishment of the FIC within an regional
  institutional context
• The Eastern and Southern African Anti-Money
  Laundering Group (ESAAMLG)
• The ESAAMLG Memorandum of Understanding
• Relationship to the Financial Action Task Force
  (FATF)

3
FINANCIAL INTELLIGENCE CENTRE

• Background
• Proposal to establish a regional anti-money
  laundering group in Africa first recommended at
  workshop held in South Africa in October 1995.
• Eastern and Southern African Anti-Money
  Laundering Group (ESAAMLG) launched at meeting of
  Ministers in Tanzania, 1999.
• Memorandum of Understanding (MOU) acts as the
  base document for active membership but SA
  still to sign.

4
FINANCIAL INTELLIGENCE CENTRE

• ESAAMLG Memorandum Of Understanding (MOU) Key
  elements
• ESAAMLG objectives
• Adopt and implement the 40(8) Recommendations of
  the FATF
• Apply anti-money laundering measures to all
  serious crimes
• Implement measures contained in multi-lateral
  agreements and initiatives to which they
  subscribe for the prevention and control of the
  laundering of proceeds of all serious crime.

5
FINANCIAL INTELLIGENCE CENTRE

• MOU (cont)
• Members of the ESAAMLG/ Signatories to the MOU  
• Kenya
• Malawi
• Mauritius
• Mozambique
• Namibia
• Swaziland
• Seychelles
• Tanzania
• Uganda
•  
• ESAAMLG Countries which have not yet signed the
  MOU
•  
• Botswana
• Lesotho
• South Africa
• Zambia

6
FINANCIAL INTELLIGENCE CENTRE

• MOU (cont)
• Provision made for Co-operating and Supporting
  Nations
• Countries which express support for ESAAMLG
  objectives have undergone positive FATF mutual
  evaluation process
• US, UK.
• Provision is made for observer countries
  organisations
• Commonwealth Secretariat
• UN Global Programme Against Money Laundering
• Financial Action Task Force (FATF) Secretariat
• World Bank International Monetary Fund
• Interpol
• World Customs Organisation
• African Development Bank
• Southern African Development Community
  Secretariat
• Common Market for East and Southern Africa
  Secretariat
• East African Community Secretariat and the
• East African Development Bank.

7
FINANCIAL INTELLIGENCE CENTRE

• MOU (cont)
• Funding
• Annual membership subscription of US 20, 000
• Structure
• Ministerial Council annual meeting
• Task Force of Senior Officials twice-annual
  meeting
• Secretariat based in Dar Es Salaam
• Ministerial Council
• Key decision making body
• Consists of Ministerial representative
• Annual meeting
• Elect office-bearers (President and
  vice-president)
• Approve financial report work programme
  secretariat audit adopt policy approve new
  members etc

8
FINANCIAL INTELLIGENCE CENTRE

• MOU (cont)
• Task Force of officials
• Members represented by senior official
• Meet twice annually
• Prepare for Council meetings
• Monitor work of Secretariat
• Secretariat
• Perform technical duties
• Implement work programme, including -
• assessment processes, training, facilitate and
  liaise with third parties, monitor AML
  developments
• Submit to the Task Force -
• annual report financial reports work programme
  budget

9
FINANCIAL INTELLIGENCE CENTRE

• MOU (cont)
• National Committees/ FIUs
• All member countries will establish FIUs
• Self-Assessment/ Mutual Evaluation
• All member countries will agree to undergo
  self-assessments and mutual evaluations
• Language
• English

10
FINANCIAL INTELLIGENCE CENTRE

• ESAAMLG is regional-style body of the Financial
  Action Task Force (FATF)
• FATF is de facto international coordinating body
  responsible for combating money laundering
• Consists of twenty-nine member countries and two
  regional bodies.
• Has developed a set of Recommendations which set
  global standard for anti-money laundering (AML)
  and combating financing of terrorism (CFT)
• Recommendations known as FATF 408
•  
• Minimum criteria FATF membership
• Full political commitment to FATF objectives,
• Implementation of 408 Recommendations
• (legislative framework STRs and KYC
  obligations), and
• Active participation relevant FATF-style regional
  body (ESSAMLG)
•  
• FIC Act means SA largely complies with FATF
• SA wishes to become member of the FATF
• SA also required to become active member of the
  ESAAMLG.

11
FINANCIAL INTELLIGENCE CENTRE

• ESAAMLG (and FATF) membership important
•  
• ESAAMLG membership required for FATF compliance
• Obviates pressure to place SA on FATF list of
  NCCT/ blacklist
• Creates opportunity for use of expertise and
  experience in the region
•  
• Money laundering cannot be dealt with in
  isolation by one country  
• Regional cooperation will further strengthen SA
  anti-money laundering regime
• Business (esp financial sector) increasingly
  faces AML questions from international
  counterparts re compliance, membership of
  international bodies. Pressure growing post Sept
  2001.

12
FINANCIAL INTELLIGENCE CENTRE

• Process and Interaction with FATF and ESAAMLG
• FATF -
• Delegation visited (May) SA political commitment
  given
• Membership application process under way
• Plenary meeting approval (June)
• Invited as observer to Plenary October 2002
• Evaluation process in March 2003
• Membership from June 2003?
• ESAAMLG
• Officials meeting in Dar-es-Salaam
• Cabinet has approved that Min of Fin should sign
  MOU
• Active membership from August
• Ratification by Parliament required thereafter.

13
FINANCIAL INTELLIGENCE CENTRE

• ends
• 25 JUNE 2002

14
(No Transcript)
15
FINANCIAL INTELLIGENCE CENTRE
Annexure Financial Action Task Force Members

• Argentina
• Australia
• Austria
• Belgium
• Brazil
• Canada
• Denmark
• Finland
• France
• Germany
• Greece
• Hong Kong, China
• Iceland
• Ireland
• Italy
• Japan

• Luxembourg
• Mexico
• Kingdom of the Netherlands
• New Zealand
• Norway
• Portugal
• Singapore
• Spain
• Sweden
• Switzerland
• Turkey
• United Kingdom and
• United States.
• European Commission and the
• Gulf Co-operation Council.

16
FINANCIAL INTELLIGENCE CENTRE

• Annexure
• FATF LIST OF NON-COOPERATING COUNTRIES AND
  TERRITORIES (NCCT) June 2002
• Cook Islands Nauru
• Dominica Nigeria
• Egypt Niue
• Grenada The Philippines
• Guatemala Russia
• Indonesia St Vincent The Grenadines
• Marshall Islands Ukraine
• Myanmar (Burma)
• Hungary, Israel, Lebanon and St Kitts Nevis
  removed, 21 June 2002

17
FINANCIAL INTELLIGENCE CENTRE
Annexure FATF RELATIONSHIPS
FATF-style Regional Bodies

• FATF
• 29 countries represented
• Membership by invitation
• Country members
• Policy matters

South American Financial Action Task Force
(SAFATF)
Caribbean Financial Action Task Force (CFATF)

• FATF-style Regional Body - ESAAMLG
• (9 countries represented)
• Country members
• Regional policy matters

Asia/ Pacific Group on Money Laundering (APGML)
18
FINANCIAL INTELLIGENCE CENTRE
Annexure FIC Overall Architecture
Internat. Links
Investigative Authorities eg.
Accountable Institutions
sharing
SAPS
sharing
Supervisory Bodies (FSB)
FIC
Bank
Coordination
Compliance
Data storage Analysis Reports
NDPP
Insur- ance
Reports
Reports
SARS
Casino
Awareness training
Investigations
ML Advisory Council