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International Narcotics Control Strategy Report
Bureau of International Narcotics and Law Enforcement Affairs
March 2004
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United Nations

United Nations Security Council Resolutions

UN Security Council Resolutions (UNSCR) 1267, 1390 and 1455 obligate UN Member States to impose certain measures—namely, asset freezes, travel restrictions and an arms embargo—against individuals and entities associated with Usama Bin Ladin, or members of al-Qaida or the Taliban that are included on the consolidated list maintained and regularly updated by the UN 1267 Sanctions Committee. UNSCR 1452 allows for limited exceptions to the asset freeze provisions under certain circumstances. A Monitoring Group reports to the UN 1267 Sanctions Committee on the implementation of the resolutions.

United Nations Security Council Resolution 1373

On September 28, 2001 the United Nations Security Council adopted Resolution 1373 (UNSCR 1373) concerning terrorism. UNSCR 1373 requires States to take certain specified measures to combat terrorism. Among other things, it requires States to do the following: to freeze without delay funds, financial assets or other economic resources of persons who commit, attempt to commit, facilitate or participate in the commission of terrorist acts; to prohibit their nationals or any persons and entities within their territories from making any funds, financial assets or economic resources or other related services available—directly or indirectly—for the benefit of persons who commit, attempt to commit, facilitate or participate in the commission of terrorist acts; to ensure that terrorist acts are established as serious criminal offenses in domestic laws and regulations and that punishment duly reflects the seriousness of such terrorist acts; to deny safe haven to those who finance, plan, support or commit terrorist acts; and, to ensure that any person who participates in the financing, planning, preparation or perpetration of terrorist acts is brought to justice. UNSCR 1373 calls upon States to exchange information and cooperate to prevent the commission of terrorist acts.

UNSCR 1373 establishes a committee, the UN Counter-Terrorism Committee (CTC), to monitor implementation of the resolution and to receive reports from States on steps they have taken to implement the resolution. By the end of 2003, all 191 UN Member States had submitted reports to the CTC on their counterterrorism capabilities and steps they had taken to implement UNSCR 1373. In addition, 158 Member States had submitted follow-up second reports and 99 Member States had submitted third reports.

UN International Convention for the Suppression of the Financing of Terrorism

On December 9, 1999, the United Nations General Assembly adopted the International Convention for the Suppression of the Financing of Terrorism. It was opened for signature from January 10, 2000 to December 31, 2001. This Convention requires parties to criminalize the provision or collection of funds with the intent that they be used, or in the knowledge that they are to be used, to conduct certain terrorist activity. Article 18 of the Convention requires states parties to cooperate in the prevention of terrorist financing by adapting their domestic legislation, if necessary, to prevent and counter preparations in their respective territories for the commission of offenses specified in Article 2. To that end, Article 18 encourages implementation of numerous measures consistent with the FATF Forty Recommendations on Money Laundering. These measures, which states parties implement at their discretion, include the following: prohibiting accounts held by or benefiting people unidentified or unidentifiable; verifying the identity of the real parties to transactions; and, requiring financial institutions to verify the existence and the structure of the customer by obtaining proof of incorporation.

The Convention also encourages states parties to obligate financial institutions to report complex or large transactions and unusual patterns of transactions that have no apparent economic or lawful purpose, without incurring criminal or civil liability for good faith reporting; to require financial institutions to maintain records for five years; to supervise (for example, through licensing) money-transmission agencies; and to monitor the physical cross-border transportation of cash and bearer-negotiable instruments. Finally, the Convention addresses information exchange, including through the International Criminal Police Organization (Interpol). As of December 31, 2003, 107 states had become parties to the Convention; 25 other states had signed, but not ratified, the Convention. It entered into force internationally on April 9, 2002. The United States became a party to the Convention on June 26, 2002.

UN Convention against Transnational Organized Crime

The UN Convention against Transnational Organized Crime (Convention) was signed by 125 countries, including the United States, at a high-level signing conference December 12-14, 2000 in Palermo, Italy. It is the first legally binding multilateral treaty specifically targeting transnational organized crime. Two supplemental Protocols addressing trafficking in persons and migrant smuggling were also signed by many countries in Palermo. Each instrument enters into force on the ninetieth day after the 40th state deposits an instrument of ratification, acceptance, approval or accession. The Convention entered into force September 29, 2003, and the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children entered into force December 25, 2003. However, at the end of 2003, the Protocol against the Smuggling of Migrants by Land, Sea and Air had not yet entered into force. As of the end of 2003, 147 countries had signed the Convention and 59 countries had deposited instruments of ratification.

The Convention takes aim at preventing and combating transnational organized crime through a common toolkit of criminal law techniques and international cooperation. It requires states parties to have laws criminalizing the most prevalent types of criminal conduct associated with organized crime groups, including money laundering, obstruction of justice, corruption of public officials and conspiracy. The article on money laundering regulation requires parties to institute a comprehensive domestic regulatory and supervisory regime for banks and financial institutions to deter and detect money laundering. The regime will have to emphasize requirements for customer identification, record keeping and reporting of suspicious transactions.

UN Convention against Corruption

The UN Convention against Corruption (Convention), signed by 96 countries, including the United States, at a high-level signing conference December 9-11, 2003 in Merida, Mexico, is the first legally binding multilateral treaty to address on a global basis the problems relating to corruption. The Convention expands on the provisions of existing regional anti-corruption instruments to prevent corruption and provides channels for governments to recover assets that have been illicitly acquired by corrupt former officials. The Convention also provides for the criminalization of certain corruption-related activities such as bribery and money laundering, and for the provision of mutual legal assistance related to those activities. As the Convention against Transnational Organized Crime does, this Convention requires parties to institute a comprehensive domestic regulatory and supervisory regime for banks and financial institutions to deter and detect money laundering. That regime must emphasize requirements for customer identification, record keeping and reporting of suspicious transactions.

The Financial Action Task Force

The Financial Action Task Force on Money Laundering (FATF), established at the G-7 Economic Summit in Paris in 1989, is an inter-governmental body whose purpose is the development of international standards and the promotion of policies aimed at combating money laundering and the financing of terrorism.

The FATF originally was given the responsibility of examining money laundering techniques and trends, evaluating anti-money laundering measures, and recommending additional steps to be taken. In 1990, FATF first issued its Forty Recommendations on Money Laundering. These recommendations were designed to prevent proceeds of crime from being utilized in future criminal activities and affecting legitimate economic activity. Revised in 1996, and most recently in 2003, to reflect changes in money laundering patterns, these recommendations, along with the FATF Eight Special Recommendations on Terrorist Financing, are widely acknowledged as the international standards in these areas. FATF focused on several major initiatives during 2003.

FATF monitors members' progress in implementing anti-money laundering measures, examines money laundering techniques and countermeasures, and promotes the adoption and implementation of effective anti-money laundering measures globally. In performing these activities, FATF collaborates with various other international organizations, including several FATF-style regional bodies.

In June 2003, membership in the FATF expanded from 31 to 33 jurisdictions--with the addition of South Africa and Russia--and includes two regional organizations. FATF members collectively represent the major financial centers of North America, South America, Europe, Africa, Asia, and the Pacific. The FATF member delegations are drawn from a wide range of disciplines, including experts from Ministries of Finance, Justice, Interior and Foreign Affairs; financial supervisory authorities; and law enforcement agencies. Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, European Commission, Finland, France, Germany, Greece, Gulf Co-operation Council, Hong Kong China, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, Kingdom of the Netherlands, New Zealand, Norway, Portugal, Russian Federation, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, United Kingdom and the United States are members of FATF.

Non-Cooperative Countries and Territories Exercise

In 2000, the FATF published its first list of jurisdictions deemed to be noncooperative in the global fight against money laundering (NCCT). Inclusion on the list was determined by an assessment of the jurisdiction against 25 distinct criteria covering the following four broad areas:

  • Loopholes in financial regulations;

  • Obstacles raised by other regulatory requirements;

  • Obstacles to international cooperation; and,

  • Inadequate resources for preventing and detecting money laundering activities.
In deciding whether a jurisdiction should be removed from the NCCT list, the FATF membership must be satisfied that a jurisdiction has addressed the previously identified deficiencies. The FATF relies on its collective judgment, and attaches particular importance to reforms in the areas of criminal law, financial supervision, customer identification, suspicious activity reporting, and international co-operation. As necessary, legislation and regulations must have been enacted and have come into effect before removal from the list may be considered. Additionally, the FATF seeks to ensure that the jurisdiction is implementing needed reforms. Thus, information related to institutional arrangements, the filing and utilization of suspicious activity reports, examinations of financial institutions, and the conduct of money laundering investigations, is considered.

During 2003, the FATF removed Grenada and St. Vincent and the Grenadines from its list of noncooperative jurisdictions. In November of 2003, it called upon its membership to impose additional countermeasures on Burma, a jurisdiction on the NCCT list that had yet to address major deficiencies in its anti-money laundering regime. At the close of 2003, nine jurisdictions remained on the FATF's NCCT list: Burma, Cook Islands, Egypt, Guatemala, Indonesia, Nauru, Nigeria, Philippines and Ukraine.

Revision of the FATF Forty Recommendations on Money Laundering

The FATF Forty Recommendations on Money Laundering constitute the generally accepted international anti-money laundering standard and cover such relevant areas as regulatory, supervisory and criminal law, as well as international cooperation.

Money laundering methods and techniques change as new measures to combat money laundering are implemented and new technologies are developed. Therefore, in 2001, FATF embarked on a review of the FATF Forty Recommendations to ensure that they were current. This effort was concluded in June 2003, when the FATF released its latest revised Forty Recommendations. The following are among the more prominent changes in these revised recommendations:

  • Expansion of Criminal Money Laundering Laws;

  • Enhanced Due Diligence for Correspondent Banking;

  • Increased Scrutiny for Politically Exposed Persons;

  • Prohibition of Shell Banks;

  • Justifying Use of Bearer Shares;

  • Expansion of Definition of "Financial Institution";

  • Application of AML Provisions to Gatekeepers; and

  • Tightening Third Party Introducer Standards.
Combating the Financing of Terrorism

Shortly after September 11, 2001, the FATF mandate was expanded beyond money laundering to support the worldwide effort to combat terrorist financing. During an extraordinary plenary meeting in Washington, D.C. on October 29-30, 2001, FATF adopted Eight Special Recommendations on Terrorist Financing. These Special Recommendations now represent the international standard in this area.

The FATF membership has completed self-assessments against the Eight Special Recommendations, and the FATF has called upon all countries and jurisdictions to take part in a similar exercise. During 2003, the FATF worked to provide additional interpretation and guidance with respect to its recommendations on terrorist financing. Included in this effort was the issuance of an interpretive note and a best practices paper on alternative remittance systems and an interpretive note on wire transfers (Special Recommendations VI and VII respectively). More recently, the FATF issued, in October 2003, an interpretive note to Special Recommendation III, involving the freezing and confiscating of terrorist assets. The FATF additionally offered a summary of international best practices on SR III with specific regard to the freezing of terrorist assets.

The FATF continues to work with jurisdictions that lack appropriate measures to combat terrorist financing. At the October 2003 Plenary, FATF launched an assessment initiative in collaboration with the G-8's Counter Terrorism Action Group (CTAG). At the request of CTAG, FATF has begun assessing the counterterrorist financing technical assistance needs of several jurisdictions. These assessments and follow up assistance by CTAG donor countries will assist countries in strengthening their counterterrorist financing regimes and in meeting the standards set by the FATF Eight Special Recommendations as well as the relevant UN Security Council resolutions.

The FATF and the International Financial Institutions

Money laundering and the financing of terrorism are worldwide concerns that undermine the integrity of domestic and global financial systems, increase risks and may impact national security. Since September 11, 2001, the international community has adopted a broad and comprehensive agenda to address these threats. As an important part of that effort, the International Financial Institutions (IFIs), notably the World Bank and the International Monetary Fund (IMF), have agreed to take on an enhanced role in the global fight against money laundering and the financing of terrorism.

A significant part of this enhanced role involves integrating anti-money laundering and counterterrorist financing (AML/CTF) considerations into the IFIs' financial sector assessment, surveillance and diagnostic activities. There has been increased recognition of the need for the IMF and World Bank to increase their involvement in strengthening financial regulatory frameworks and in providing technical assistance to authorities on AML/CTF matters.

The IMF and World Bank are now including assessments of members' AML/CTF regimes in the course of their Financial Sector Assessment Program (FSAP) reviews and in other aspects of their engagement with members. The IMF and World Bank collaborated closely with the FATF, other international standard setters (the Basel Committee of Banking Supervisors, the International Association of Insurance Supervisors, the International Organization of Securities Commissions) and the Egmont Group of Financial Intelligence Units to develop a comprehensive and unified methodology for measuring countries' implementation of AML/CTF principles, based on the FATF Forty Recommendations on Money Laundering and the FATF Eight Special Recommendations on Terrorist Financing.

In the fall of 2002, the FATF membership adopted, and the IMF and World Bank Executive Boards agreed to use, the comprehensive methodology to assess member compliance with AML/CTF principles. As an integral part of the enhanced program, the Executive Boards of the IMF and World Bank approved a twelve-month pilot project to assess members' compliance with AML/CTF principles using the methodology in participation with FATF and FATF-Style Regional Bodies. The United States and other G-7 members have volunteered to be assessed using the new AML/CTF methodology. The pilot project concluded at the end of 2003 and is now under review and evaluation. Subsequent to the release in June 2003 of the new FATF Forty Recommendations, the FATF, in cooperation with the IFIs, began revising the comprehensive assessment methodology. The revised methodology is expected to be completed and adopted by the FATF in February 2004.

The FATF 2003 Typologies Exercise

The FATF conducted its annual typologies exercise (November 17 and 18, 2003, in Oaxaca, Mexico) to examine current and emerging methods, trends, and patterns in money laundering and terrorist financing, and to consider effective countermeasures. The 2003 typologies exercise focused upon money laundering vulnerabilities in the insurance sector, nonprofit organizations and wire transfers, and their relationships to terrorist financing.

FATF-Style Regional Bodies

The FATF-style regional bodies (FSRBs), which are all observers of FATF, have similar form and functions to those of the FATF, and some FATF members are also members of these bodies. The FSRBs are regional groups that interpret and implement the international standards developed by FATF. The five currently active groups use peer pressure and mutual evaluations of member jurisdictions to encourage their laws' and practices' consistency with FATF standards and recommendations. The FSRBs monitor those whose level of compliance is determined to be less than acceptable, and coordinate and/or provide technical assistance to those and other members. Currently, there are ongoing discussions regarding the establishment of a Central Asia FSRB and a FSRB for the Middle East region. If these FSRBs were to be established, the only geographic region lacking a FSRB would be the Central Africa region.

Asia/Pacific Group on Money Laundering

The Asia/Pacific Group on Money Laundering (APG) is comprised of 26 nations from South Asia, Southeast Asia, East Asia and the South Pacific. They include Australia, Bangladesh, Brunei Darussalam, Chinese Taipei, Cook Islands, Fiji Islands, Hong Kong China, India, Indonesia, Japan, Korea (Republic of), Macau China, Malaysia, Marshall Islands, Nepal, New Zealand, Niue, Pakistan, Palau, Philippines, Samoa, Singapore, Sri Lanka, Thailand, United States and Vanuatu. There are also 13 observer jurisdictions and 13 observer international and regional organizations in the APG.

The APG's mission is to contribute to the global fight against money laundering, organized crime and terrorist financing in the Asia/Pacific region by enhancing anti-money laundering and antiterrorist financing efforts. In 2003, Australia and Korea served as co-chairs of the APG.

Major achievements during 2003 included expansion of the APG with the addition of Brunei Darussalam, adoption of revised APG mutual evaluation procedures incorporating the standard AML/CTF methodology, the completion of two mutual evaluations (South Korea and Palau) and one IMF/World Bank-led assessment of an APG member (Bangladesh), further expansion of the APG's work in the area of technical assistance and training, and a successful typologies meeting in Kuala Lumpur, Malaysia. An APG Steering Group and a Typologies Working Group were also established.

The Sixth Annual Meeting of the APG, in Macau, China in September 2003, reached agreement on a range of issues, including the adoption of a budget and business plan for 2004, the approval of two mutual evaluation reports and an IMF/World Bank-led assessment, agreement to increase the APG Secretariat staff and consideration of future technical assistance and training priorities.

The APG Annual Meeting was preceded by a one day Forum on Technical Assistance and Training, the second such gathering. The Forum provided an opportunity to address coordination and priority issues among donors and providers. In addition, bilateral meetings between priority jurisdictions and interested donors and providers were held to discuss training priorities and to promote the coordinated delivery of assistance.

The Typologies Workshop in December 2003 provided a forum to develop in-depth, practical knowledge and increase understanding of money laundering and terrorist financing methods and trends in the region. The workshop included special presentations and breakout sessions on a number of special topics including terrorist financing, the abuse of wire transfers and nonprofit organizations, and currency smuggling and corruption issues. The APG Typologies Working Group was formally established and given its first task of producing the annual typologies report, which will be ready for the next APG annual meeting in June 2004.

After the typologies meeting, the APG held an intensive two-day training session for evaluators, in conjunction with the IMF/World Bank, to review the new standard assessment methodology. Participants included personnel with skills and experience in legal, financial and law enforcement matters who will now be ready to participate in future APG mutual evaluations or IMF/World Bank assessments of APG members.

The APG has an ambitious 2004 work program. Among other goals, the APG plans to conduct a number of new mutual evaluations/assessments, which will include Pakistan, India, Nepal, Sri Lanka, Niue, Marshall Islands, and Brunei Darussalam; and to coordinate and deliver increased technical assistance and training, which will be discussed at a Training and Technical Assistance Forum held at the Seventh Annual Meeting in Seoul in June 2004. The APG will also continue to cooperate with related organizations and bodies, including the FATF, other regional anti-money laundering bodies, international and regional financial institutions, the Egmont Group, the UN Global Programme Against Money Laundering, Interpol, the World Customs Organization, the Commonwealth Secretariat and the Pacific Islands Forum Secretariat.

Caribbean Financial Action Task Force

The Caribbean Financial Action Task Force (CFATF) continues to advance its anti-money laundering initiatives within the Caribbean basin. In October 2003, El Salvador became a full member of the CFATF, increasing its membership to 30 jurisdictions. CFATF members include Anguilla, Antigua and Barbuda, Aruba, Commonwealth of the Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Costa Rica, Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Montserrat, Netherlands Antilles, Nicaragua, Panama, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, Turks and Caicos Islands and Venezuela. In October 2003, Antigua and Barbuda assumed Chairmanship of the CFATF and the Egmont Group of Financial Intelligence Units was granted observer status to the CFATF.

Members of the CFATF subscribe to a Memorandum of Understanding (MOU) that delineates the CFATF's mission, objectives, and membership requirements. All members are required to make a political commitment to adhere to and implement the FATF Forty Recommendations on Money Laundering, the FATF Eight Special Recommendations on Terrorist Financing and the CFATF's additional 19 Recommendations, and to undergo peer review in the form of mutual evaluations to assess their level of implementation of the recommendations. Members are also required to contribute to the CFATF budget and to participate in the activities of the body.

In July 2001, the CFATF initiated its second round of mutual evaluations, focused on the effective implementation of the FATF and CFATF Recommendations, as well as the FATF's NCCT 25 criteria. In October 2003, the CFATF's Council of Ministers approved two mutual evaluation reports, Antigua and Barbuda and the Turks and Caicos Islands. The Council of Ministers also reviewed the mutual evaluation report on Barbados. Mutual evaluation reports on Dominica, Grenada, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines, for which on-site visits were conducted during 2002, will be presented and discussed at the April 2004 CFATF Plenary in Trinidad and Tobago. These evaluations were conducted jointly with the World Bank using the common Anti-Money Laundering/Counter Financing of Terrorism (AML/CTF) Methodology. In 2003, the CFATF, IMF and World Bank jointly conducted several workshops for mutual evaluation examiners.

The CFATF has established an initiative to compile annual country reports on each member to assess compliance with the international anti-money laundering and counterterrorist financing standards. This project is intended to complement the mutual evaluation program and to enhance the CFATF's monitoring capacity. The first set of country reports has been drafted and is expected to be adopted and published in 2004.

In March 2003, the CFATF and the South American Financial Action Task Force (GAFISUD) conducted a joint two-day typologies exercise in Panama City, Panama, focused on terrorist financing and money laundering. During this exercise, 13 presenters from nine countries and one international organization shared expertise focused on detecting and combating terrorist financing and money laundering.

In October 2003, the Council of Ministers endorsed the revised 2003 FATF Forty Recommendations, FATF Interpretative Notes to Special Recommendations III and VI, and the FATF Best Practices Paper on Freezing Terrorist Assets. The Ministers further agreed that the 2003 FATF Forty Recommendations and the FATF Eight Special Recommendations on Terrorist Financing would serve as the benchmarks for the CFATF's third round of mutual evaluations.

Council of Europe MONEYVAL

MONEYVAL generally includes within its membership those Council of Europe member states that are not members of the FATF. MONEYVAL members include Albania, Andorra, Armenia, Azerbaijan, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Georgia, Hungary, Latvia, Liechtenstein, Lithuania, Macedonia, Malta, Moldova, Monaco, Poland, Romania, the Russian Federation, San Marino, Serbia and Montenegro, Slovakia, Slovenia and Ukraine. The terms of reference for the MONEYVAL Committee of the Council of Europe were amended in 2003 to permit the Russian Federation to continue its membership even after its accession to the FATF. MONEYVAL aims to encourage legal, financial and punitive measures among its members that are in line with international standards. To accomplish this, it relies on a system of mutual evaluations and peer pressure. MONEYVAL's mandate was most recently extended through the end of 2007.

In 2003, MONEYVAL worked to conclude its second round of mutual evaluations as well as certain first round evaluations of new members. MONEYVAL held three plenary sessions in 2003 during which mutual evaluation reports regarding Azerbaijan, Lithuania, Liechtenstein, Malta, Macedonia, Monaco, Poland, Romania and Slovakia were discussed and adopted. The mutual evaluation of Azerbaijan was notable in that it was conducted using the common assessment methodology agreed to by the FATF and the international financial institutions. MONEYVAL anticipates commencing its third round of mutual evaluations during the second half of 2004, after a revised common assessment methodology has been adopted.

At the close of 2003, MONEYVAL continued to list Georgia as subject to its compliance enhancing procedures due to the existence of continued identified deficiencies in Georgia's anti-money laundering control programs. Under these special procedures, MONEYVAL's actions can range from requiring regular reporting to the delivery of high-level warnings.

Like the FATF, MONEYVAL has taken on additional responsibilities in the area of counterterrorist financing. In 2002, the Council's European Committee on Crime Problems revised MONEYVAL's terms of reference to specifically include the issue of financing terrorism. The current text recognizes the FATF Eight Special Recommendations on Terrorist Financing as international standards and authorizes the evaluation of the performance of MONEYVAL member states in complying with these standards. The Council's Multidisciplinary Group on International Action Against Terrorism has pointed to MONEYVAL's evaluation work as a priority for Council of Europe action. The Council of Europe's Parliamentary Assembly, in its Recommendation 1584, has similarly recognized the importance of MONEYVAL's monitoring and evaluation of all aspects connected with the financing of terrorism.

During 2004, in addition to its ongoing evaluation responsibilities, MONEYVAL will participate in the Committee of Experts on the revision of the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, more commonly known as the Strasbourg Convention. The feasibility of including preventive measures and counterterrorist financing in the Strasbourg Convention will be examined.

With funding provided by the European Commission, MONEYVAL has organized technical assistance programs for two member states—the Russian Federation and Ukraine. By December 2003, MONEYVAL had placed a resident advisor in Kiev.

Eastern and Southern African Anti-Money Laundering Group

The Eastern and Southern African Anti-Money Laundering Group (ESAAMLG) was launched at a meeting of ministers and high-level representatives in Arusha, Tanzania, in August 1999 and held its first meeting in April 2000. The group maintains its Secretariat in Dar es Salaam, Tanzania. Its member countries are Kenya, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Uganda, Botswana, Lesotho, Zambia and Zimbabwe. The United States, United Kingdom, Commonwealth Secretariat, United Nations and World Bank serve as cooperating nations and organizations.

The ESAAMLG continued its development as a FSRB in 2003 with the following achievements:

  • Expanded the ESAAMLG membership to formally include Botswana, Lesotho, Zambia and Zimbabwe as signatories to the ESAAMLG Memorandum of Understanding;

  • Conducted mutual evaluation workshops in Bagamoyo, Tanzania, in January 2003 and Dar es Salaam, Tanzania, in May 2003;

  • Hired an Executive Secretary in February 2003;

  • Assisted in the FATF's mutual evaluation of South Africa and Swaziland in April and August of 2003, respectively;

  • Established regional standing sub-groups of experts on legal, law enforcement and financial issues at the August 2003 meeting of the Task Force of Senior Officials;

  • Held the first meetings of the expert sub-groups and incorporated their findings and recommendations into the ESAAMLG Work Plan for 2003/2004;

  • Adopted the revised FATF Forty Recommendations and the common methodology agreed upon by the FATF, the IMF and the World Bank for conducting evaluations against the FATF Forty Recommendations;

  • Held the 2003 annual meeting in August of the ESAAMLG's Ministers in Kampala, Uganda; and,

  • Secured continued support and funding from Supporting and Cooperating Nations and Organizations, including a donation of $70,000.00 by the U.S. Government for programs against terrorist financing.
In accordance with the ESAAMLG Work Plan for 2003/2004, the ESAAMLG anticipates undertaking the following initiatives in 2004:
  • Completing a mutual evaluation training session at the end of January 2004 in Zambia (countries sending trainees are Botswana, Kenya, Lesotho, Malawi, Mauritius, Namibia, Tanzania, Uganda);

  • Piloting a computer-based Modular Anti-Money Laundering Training Program developed by the UN Global Programme against Money Laundering in Zambia in February 2004;

  • Completing mutual evaluations scheduled for Lesotho, Malawi and Namibia by the end of April 2004;

  • Working with World Bank First Initiative to fund a workshop in South Africa in May 2004 to assist all ESAAMLG members in developing a strategy outlining how they will go forward on developing an AML/CTF program; and,

  • Coordinating technical assistance to ESAAMLG members in developing and implementing AML/CTF strategies.
These initiatives will be reviewed and discussed at a meeting of the Task Force of Senior Officials in March 2004 and the annual Ministerial Meeting in August 2004.

Financial Action Task Force Against Money Laundering in South America

The Memorandum of Understanding establishing the Financial Action Task Force Against Money Laundering in South America, (Grupo de Acci�n Financiera de Sudamerica Contra el Lavado de Activos or GAFISUD) was signed on December 8, 2000 by nine member states: Argentina, Bolivia, Brazil, Colombia, Chile, Ecuador, Peru, Paraguay and Uruguay. Mexico, Portugal, Spain, the United States, the Inter-American Development Bank, the International Monetary Fund, the United Nations Office for Drug Control and Crime Prevention, and the World Bank have joined GAFISUD as cooperating and supporting observer members (PACOS). In addition, the Organization of American States' Inter-American Drug Abuse Control Commission (OAS/CICAD) is a special advisory member. GAFISUD is committed to the adoption and implementation of the FATF Forty Recommendations on Money Laundering. GAFISUD's mission also includes member self-assessment and mutual evaluation programs. Headquarters and a permanent Secretariat have been officially established in Buenos Aires, Argentina, and Uruguay has offered a training center as a permanent training venue for GAFISUD.

At the July 2003 Plenary of GAFISUD, Venezuela was admitted as a new member, increasing GAFISUD membership to 10 governments. Argentina was elected to serve as President of GAFISUD in 2004, following Uruguay's Presidency in 2003. The Egmont Group of Financial Intelligence Units was admitted as an observer in December 2003.

Also at the July 2003 Plenary in Buenos Aires, GAFISUD finalized and adopted Mutual Evaluation Reports on Chile, Ecuador, Paraguay, and Peru. This concluded GAFISUD's first round of mutual evaluations. The second round of mutual evaluations is scheduled to begin in summer 2004. Additionally, GAFISUD has adopted an Action Plan to Counter Terrorism and has endorsed the FATF Eight Special Recommendations on Terrorist Financing. GAFISUD has also endorsed the common AML/CTF Methodology for assessing compliance with the FATF Recommendations.

GAFISUD has been increasingly active in training and technical assistance. In March 2003, GAFISUD and CFATF organized a joint two-day typologies exercise in Panama City, Panama, that focused on terrorist financing and money laundering. During this exercise, 13 presenters from nine countries and one international organization shared expertise focused on detecting and combating terrorist financing and money laundering. This was the second joint GAFISUD-CFATF typologies exercise.

Also during 2003, GAFISUD, jointly with the IMF and the World Bank, conducted training for GAFISUD mutual evaluation examiners. In December 2003, GAFISUD conducted a Forum for Financial Institution Supervisors to provide training on implementation of the revised FATF Forty Recommendations. GAFISUD has also adopted a training work plan for 2004 that will focus on advanced training for financial investigators as well as enhancing legislation to more broadly permit the use, with appropriate safeguards, of special investigative techniques such as informants, undercover operations, task forces and electronic surveillance.

Inter-Governmental Action Group against Money Laundering (GIABA)

The Heads of State and Government of the Economic Community of West African States (ECOWAS) established the Inter-Governmental Action Group against Money Laundering (GIABA) in December 1999. GIABA's first meeting was held in Dakar, Senegal, in November 2000. Members include: Benin, Burkina Faso, Cape Verde Islands, the Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mauritania, Mali, Niger, Nigeria, Senegal and Togo. A Senegalese magistrate serves as the acting head of GIABA.

At the first meeting, GIABA endorsed the FATF Forty Recommendations on Money Laundering, recognized the FATF as an observer, and provided for self-assessment and mutual evaluation procedures to be carried out by GIABA. While the text prepared by the experts provided for a strong involvement of ECOWAS in the activities of GIABA, the Ministers agreed to give more autonomy to the new body.

In November 2002, GIABA held a meeting with representatives from 14 of the member countries (Liberia was not represented) to discuss the money laundering situation in the region and international efforts to combat money laundering. Representatives of FATF, the United Kingdom, the UN Global Programme against Money Laundering, and the U.S. Treasury Department made presentations. GIABA did not set a date for its next meeting and did not hold a plenary session in 2003.



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