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2011 International Narcotics Control Strategy Report (INCSR)--Volume II: Money Laundering and Financial Crimes Country Database--Montserrat through Suriname


Report
Bureau of International Narcotics and Law Enforcement Affairs
May 20, 2011

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Montserrat

Montserrat has one of the smallest financial sectors of the Caribbean overseas territories of the United Kingdom. The Montserratian economy has been effectively halted since the volcanic eruption in 1995 that reduced the population and business activity on the island. Less than 6,000 people remain resident on the island. The island's operating budget is largely supplied by the British government and administered through the Department for International Development (DFID). Export businesses currently based in Montserrat deal primarily in the selling and shipping of aggregate for construction. Imports include virtually everything available for sale on the island. An offshore financial services sector may attract money launderers because of a lack of regulatory resources. None of the offshore banks appears to have a physical presence on the island, complicating regulation.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, securities dealers, money transmission services, company management services, and financial leasing companies

Enhanced due diligence procedures for (PEPs): Foreign: YES Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, securities dealers, money transmission services, company management services, and financial leasing companies

Number of STRs received and time frame: 15 in 2010

Number of CTRs received and time frame: Not applicable

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 0 in 2010

Convictions: 0 in 2010

Assets forfeited: criminally: 0 in 2010 civilly: 0 in 2010

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Montserrat is a member of the Caribbean Financial Action Task Force (CFATF), a Financial Action Task Force (FATF)-style regional body. The most recent evaluation can be found here: http://www.imf.org/external/pubs/ft/scr/2003/cr03371.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Montserrat’s offshore banks pose significant risks, especially in the areas of know your customer rules and currency declarations. The lack of resources and personnel may reduce the effectiveness of those regulations that are in place. The regulations do not explicitly address offshore banks, and it remains unclear whether they are subject to the regulations’ requirements. Additionally, there are apparent deficiencies in the application of many guidelines since they remain a code of practice rather than mandatory legislation.

Montserrat is a United Kingdom (UK) Caribbean overseas territory and cannot sign or ratify international conventions in its own right. Rather, the UK is responsible for Montserrat’s international affairs and may arrange for the ratification of any convention to be extended to Montserrat. The 1988 Drug Convention was extended to Montserrat in 1995. The UN Convention against Corruption, the International Convention for the Suppression of the Financing of Terrorism, and the UN Convention against Transnational Organized Crime (UNTOC) have not yet been extended to Montserrat.

Montenegro

Independent since 2006, Montenegro continues to develop and improve the capabilities necessary to prevent money laundering, combat terrorist financing and fight corruption. Montenegro is a country of both origin and transit for organized crime activities, with money laundering, drug smuggling and corruption being major areas of concern. Montenegro is a part of the East-West transit corridor for drugs, and government authorities consider drug-related crimes the most serious source of illicit proceeds in the country. In addition, government sources claim laundered money primarily comes from the foreign off-shore zones (British Virgin Islands, Cyprus, Belize) through the purchase of real estate, the acquisition of consumer luxury items and investment in privately owned businesses. Certain factors, such as the high level of cash usage in the economy, may influence the effectiveness of the fight against money laundering and terrorist financing. Montenegro’s use of the euro, despite being outside the Euro-Zone, makes it potentially vulnerable to organized criminals seeking to launder cash.

Within Montenegro there exists a significant black market for smuggled items such as stolen cars, narcotics, cigarettes and counterfeit products. Many of these items are trafficked by organized criminal groups. Proceeds from illegal activities are invested heavily in real estate. Montenegrin authorities do not consider Montenegro to be exposed to terrorism or a haven for terrorist finance.

Corruption is another problem which impacts law enforcement organizations and the judiciary in Montenegro. While the government has made legislative and institutional efforts to eliminate corruption, these efforts have yet to produce significant results in the areas of public procurement, privatization, construction permits, public administration, the judicial system, law enforcement and local government. The origin of funds used to acquire companies or businesses during privatization is often unclear or lacking in transparency. Montenegrin criminal justice officials express serious concern about the extent of financial crimes in Montenegro, but lack concrete data to support suspicions and mechanisms to measure corruption and the impact of counter-corruption measures.

In June 2004, Montenegro passed a Free Trade Zone Law, which offers businesses benefits and exemptions from custom duties, taxes and other duties. The Port of Bar is currently the only free trade zone (FTZ) in Montenegro. The Port of Bar Holding Company operates the FTZ. The general business rules of the Bar free zone require each FTZ user to come to an agreement with the Customs Authority of Montenegro on the form of customs records to be maintained about the flow of goods.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, savings banks, credit agencies, loan brokers and savings and loan institutions; organizations performing payment transactions and post offices; investment and pension fund managers; stock brokers; insurance companies and brokers, and branches of foreign insurance companies dealing with life assurance; lotteries and games of chance; exchange offices; pawnshops; auditors, accountants, and tax advice service providers; issuers of electronic money; humanitarian, non-governmental and non-profit organizations; factoring and property management companies; payment and credit card issuers and operators; financial leasing companies; travel and real estate agents; safekeeping and guarantee services; and auctioneers and dealers of motor vehicles, vessels, aircraft, works of art, precious metals and stones, and high-value goods

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, savings banks, credit agencies, loan brokers and savings and loan institutions; organizations performing payment transactions and post offices; investment and pension fund managers; stock brokers; insurance companies and brokers, and branches of foreign insurance companies dealing with life assurance; lotteries and games of chance; exchange offices; pawnshops; auditors, accountants, and tax advice service providers; issuers of electronic money; humanitarian, non-governmental and non-profit organizations; factoring and property management companies; payment and credit card issuers and operators; financial leasing companies; travel and real estate agents; safekeeping and guarantee services; and auctioneers and dealers of motor vehicles, vessels, aircraft, works of art, precious metals and stones, and high-value goods

Number of STRs received and time frame: 99 from January 1 to December10, 2010

Number of CTRs received and time frame: 53,306 from January 1 to December 10, 2010

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Two in 2009 and none in 2010

Convictions: Two in 2009 and none in 2010

Assets forfeited: criminally: $216,200 in 2009 and $156,160 in 2010 civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Montenegro is a member of MONEYVAL, a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Montenegro_en.asp

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Harmonization of Montenegro’s laws with international standards for anti-money laundering/counter-terrorist financing (AML/CFT) legislation is still pending completion. Although the basic legal and institutional framework to deal with ML/TF is in place, the operational and investigative capacities of law enforcement and the judiciary need further enhancement. Montenegro’s FIU, the Administration for Prevention of Money Laundering, lacks sufficient human resources, workspace and IT equipment to deal with its numerous assignments. Remuneration is generally low in all AML/CFT-related agencies.

Collection and management of statistics need improvement, along with the capacity to investigate financial crimes of the police and prosecutors. Prosecutors continue to require additional time and training before they can efficiently take an active role in financial investigations. In addition, closer cooperation and coordination is needed between relevant supervisory agencies such as the Central Bank of Montenegro, Securities Exchange Commission, Insurance Supervision Agency and the FIU, and law enforcement institutions. Broader involvement from the private sector is also necessary.

The framework for international judicial cooperation in ML/TF cases is generally comprehensive. Although Montenegro has signed bilateral cooperation agreements with a number of countries, the country needs to strengthen implementation. During 2010, Montenegro signed bilateral agreements on cooperation in ML/TF with Moldova, San Marino, Russia, and Israel.

The implementation of asset forfeiture laws is still in the initial stages of development, as evidenced by a lack of confiscations related to money laundering crimes and the inability to freeze terrorist assets without delay.

Reporting of suspicious transactions by financial, and particularly non-banking institutions, requires significant improvement. According to the FIU, Montenegrin officials have not recognized the existence of informal systems of financial transfers or alternative remittance systems. While activities in the fight against terrorism are broadly aligned with the existing international regulatory framework, capacities to detect and address activities possibly linked to terrorism need to be further enhanced. There were no precise data on ML from the law enforcement/judicial authorities to assess an overall level of financial crimes in the country.

In August 2010, the Government of Montenegro announced that persons with a credible global reputation will be able to obtain Montenegrin citizenship if they directly invest at least 500,000 euros (approximately $666,700) in Montenegro and its economy. As of year end this new regulation is still pending; this is a potential issue of concern should the government enact such a provision.

Although legal and institutional mechanisms to fight corruption were strengthened, the perception of corruption remains widespread and could potentially affect efforts to combat money laundering. A Joint Investigative Team, consisting of representatives of law enforcement bodies and headed by the Special Prosecutor was formed in early 2010. In October 2010, the government of Montenegro adopted the Strategy for Prevention of Money Laundering and Terrorist Finance and adopted the Action Plan for its implementation through 2010-2012.

The Montenegrin FIU exchanged information with the US financial intelligence unit, FINCEN, in two high profile cases related to organized crime and money laundering.

Potentially significant accomplishments will be achieved when Montenegro completes amendments to the Law on Prevention of Money Laundering and Terrorist Finance, which are scheduled to be adopted in Parliament in early 2011. The amendments primarily relate to electronic money transfers, new technologies, unusual transactions, reporting of suspicious transactions, and extending the list of designated entities supervised by the FIU.

Morocco

Morocco is not a regional financial center but is well integrated into the international financial system. Money laundering is a concern due to Morocco’s international narcotics trade, vast informal sector, trafficking in persons, and large level of remittances from Moroccans living abroad. Cash-based transactions in connection with cannabis trafficking are of particular concern. Morocco remains the world’s second largest producer of cannabis, with revenues estimated at over $13 billion annually. While some of the narcotics proceeds are laundered in Morocco, most proceeds are thought to be laundered in Europe. The predominant use of cash, informal value transfer systems and remittances from abroad help fuel Morocco’s informal sector. Only three in ten Moroccans use banks; credible estimates of Morocco’s informal sector place it at nearly 15 percent of GDP, and potentially employing over a third of the urban workforce. In 2009, remittances from Moroccans living abroad were approximately nine percent of GDP and drive household consumption by large segments of the population.

Offshore banks are located in the Tangier free zone. They are regulated by an interagency commission chaired by the Ministry of Finance. The free trade zone also allows customs exemptions for goods manufactured in the zone for export abroad. There have been no reports of trade-based money laundering schemes or terrorist financing activities using the Tangier free zone.

Criminal activities of particular risk include bulk cash smuggling, and unverified reports of trade-based money laundering, including under- and over-invoicing and the purchase of smuggled goods. Most businesses are cash-based with little invoicing or paper trails. Unregulated money exchanges remain a problem in Morocco and were a prime impetus for Morocco’s anti-money laundering legislation. Although the legislation targets previously unregulated cash transfers, the country’s vast informal sector creates conditions for this practice to continue.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Domestic and offshore banks, finance companies, insurance industry, lawyers, accountants, real estate intermediaries, and gaming operators

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Domestic and offshore banks, finance companies, insurance industry, lawyers, accountants, real estate intermediaries, and gaming operators

Number of STRs received and time frame: 70 since October 2009

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Nine since October 2009

Convictions: Nine since October 2009

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Morocco is a member of the Middle East North Africa Financial Action Task Force (MENAFATF), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.menafatf.org/TopicList.asp?cType=train

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of Morocco (GOM) has made considerable progress since the promulgation of the 2007 AML law. The juridical framework for countering illicit finance continues to be refined, and a series of proposed amendments responds well to Morocco’s practical experience. The establishment of Morocco’s financial intelligence unit (FIU) in October 2009 was a considerable mark of progress. Morocco’s ability to enforce its anti-money laundering statutes should improve as the FIU becomes operational. Proposed amendments, currently under consideration by the Parliament, will further clarify and stipulate STR processing requirements.

The size and adaptive nature of Morocco’s informal economy presents serious concerns. Regulatory oversight and investigative expertise must be developed that targets Morocco’s large money remittance networks. Regional trade-based money laundering and informal value transfer systems should be addressed.

Mozambique

Mozambique is not a regional financial center. Money laundering is believed to be fairly common and is linked principally to customs fraud and narcotics trafficking, although there may be links to terrorist groups as well. Most narcotics are destined for South African and European markets; Mozambique is not a significant consumption destination and is rarely a transshipment point to the United States. Local organized crime controls narcotics trafficking operations in the country, with significant involvement by Pakistani and Indian immigrants. While money laundering in the banking sector is considered to be a serious problem, foreign currency exchange houses, cash couriers, and the hawala remittance system play more significant roles in financial crimes and money laundering. Much of the laundering is believed to be happening at foreign currency exchange houses. The number of exchange houses operating in Mozambique surpasses the number required for normal business. Authorities believe the proceeds from illicit activities also have helped finance commercial real estate developments, particularly in the capital. Black markets for smuggled goods and informal financial services are widespread, dwarfing the formal retail and banking sectors in most parts of the country.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: YES

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: NO

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks and credit companies; securities companies and exchanges; debt collectors, leasing and rental companies; gaming facilities; capital/asset management concerns; payment and currency exchange operators; insurance brokers; and overseas subsidiaries or branches of Mozambican financial institutions

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks and credit companies; securities companies and exchanges; debt collectors, leasing and rental companies; gaming facilities; capital/asset management concerns; payment and currency exchange operators; insurance brokers; and overseas subsidiaries or branches of Mozambican financial institutions

Number of STRs received and time frame: Not available

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: YES

Mozambique is a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), a Financial Action Task Force (FATF)-style regional body. It has not yet had a mutual evaluation.

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Limited resources and high levels of corruption hamper the government of Mozambique’s ability to fight money laundering and terrorist financing and enforce anti-money laundering regulations. Drug traffickers use U.S. dollars as their primary currency when moving proceeds through local financial institutions; however, local institutions lack the funding, training, and personnel necessary to investigate money laundering activities and enforce the law. Porous borders and a lack of effective customs enforcement facilitate smuggling, trade-based money laundering, and informal value transfer systems.

Authorities acknowledge that alternative remittance systems are common in Mozambique, many of which operate in exchange houses that, on paper, are heavily regulated but in fact can easily avoid reporting requirements. There are no serious legislative, judicial, regulatory, or enforcement measures being considered to address this problem.

The law to establish the Financial Intelligence Office, Mozambique’s FIU, was approved by the Parliament in July 2007. The Director General of the Financial Intelligence Office was appointed in September 2008, and in 2010, the Office hired the initial staff. Since October 2010, the staff has been located in new FIU premises, although the offices are not fully operational.

Financial institutions do not have direct access to the names of persons or entities included on the UN 1267 Sanctions Committee’s consolidated list; this list is distributed only to the Central Bank, the Attorney General, the Ministry of Finance, and the Ministry of Foreign Affairs.

Namibia

Although Namibia has one of the most highly developed financial systems in Africa, it is not considered a regional financial center. Sources of potential money laundering in Namibia are related to both regional and domestic criminal activities. Falsification or misuse of identity documents, customs violations, trafficking of precious metals and gems, trafficking in illegal drugs, and stolen vehicles - mostly from South Africa - are regional problems that affect Namibia. Organized crime groups involved in smuggling activities generally use Namibia as a transit point - particularly for goods destined for Angola. Domestically, real estate as well as minerals and gems are reportedly used as vehicles for money laundering. Namibian authorities believe the proceeds of these activities are laundered through Namibian financial institutions, but on a small scale. The Namibian government has set up Export Processing Zones (EPZ). There is no indication of significant money laundering or terrorist financing via EPZs.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks and non-bank financial institutions, Casinos or gaming institutions, exchange houses, stock brokerages, cash couriers, casinos, dealers in jewels and precious metals, insurance companies, pawn shops, realtors, high-value dealers in art and vehicles, and intermediaries such as lawyers, accountants, notaries, or broker/dealers

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks and non-bank financial institutions, exchange houses, stock brokerages, cash couriers, casinos, dealers in jewels and precious metals, insurance companies, pawn shops, realtors, high-value dealers in art and vehicles; and intermediaries such as lawyers, accountants, notaries, or broker/dealers

Number of STRs received and time frame: 483 from May 2009 to December 2010

Number of CTRs received and time frame: Not applicable

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 0

Convictions: 0

Assets forfeited: criminally: YES civilly: YES

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: YES

Namibia is a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), a Financial Action Task Force-style regional body. Its most recent mutual evaluation report can be found here: http://www.esaamlg.org/userfiles/Namibia_detailed_report.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Namibia is revising its anti-money laundering framework to change from a rules-based to a risk-based approach. In certain subsectors regulatory bodies cannot impose sanctions such as the withdrawal of licenses for members that are not complying with Namibia’s AML framework. There are separate bills in draft to cover gambling and estate agents that would augment the powers of regulatory authorities to monitor and enforce Namibia’s AML framework. There have not yet been any arrests or prosecutions for money laundering. Three cases have resulted in provisional forfeiture orders. One provisional order was overturned in the courts. The remaining two provisional orders can still be challenged in the courts.

Namibia has not reached any bilateral agreement with the United States authorities on a mechanism for exchange of records in criminal matters. However, Namibia has made substantial efforts to cooperate with the United States in the area of law enforcement, especially in the area of extradition. Namibia has cooperative agreements with countries in the Southern African Development Community.

Namibia should continue to implement its AML laws and should pass the pending anti-terrorism bill. As part of the implementation process, the Government of Namibia (GON) should ensure sufficient resources and training are provided to supervisory, analytical, investigative, prosecutorial and judicial entities with responsibilities under the laws. Cross-border currency reporting should be implemented and further measures taken to enforce Namibia’s porous borders. The GON should become a party to the UN Convention for the Suppression of the Financing of Terrorism.

Nauru

Nauru is a small Central Pacific island nation with a population of approximately 10,000. It is an independent republic and an associate member of the British Commonwealth. Nauru does not control its exchange rate. It does set its budget and fiscal expenditures but it does not set the monetary policy of its currency, the Australian dollar. No banks operate on the island; all offshore firms were closed last year. Nauru is in talks with regional banking companies to establish commercial bank outlets. In line with its National Sustainable Development Strategy (NSDS) 2005–2025, the government enacted and enforced legislation to abolish offshore banks used for money laundering by criminal syndicates. Nevertheless, Nauru is an established “zero” tax haven, as it does not levy any income, corporate, capital gains, real estate, inheritance, estate, gift, sales, or stamp taxes. There is no known major criminal activity on Nauru itself that generates laundered funds.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: Unknown

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: Unknown

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Not available

Enhanced due diligence procedures for PEPs: Foreign: Unknown Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Non-bank financial institutions, money remitters, securities and investment businesses, insurance, real estate agents, dealers in precious metals and stones, trust or company service providers, and legal entities

Number of STRs received and time frame: 0 in 2010

Number of CTRs received and time frame: 0 in 2010

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: NO civilly: NO

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: NO

Nauru is a member of Asia/Pacific Group on Money Laundering (APG), a Financial Action Task Force (FATF)-style regional body. It is in the process of undergoing a mutual evaluation. Upon adoption, the evaluation report may be found here: http://apgml.org/documents/default.aspx?DocumentCategoryID=17

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Nauru’s Anti-Money Laundering Act 2008 provides for the freezing and forfeiting of tainted and terrorist property. However, there has not been any occasion to enforce existing asset seizure and forfeiture laws.

The Government of Nauru (GON) should establish and implement reporting requirements for inbound currency and negotiable instruments. The GON should become a party to the UN Convention against Corruption, the 1988 UN Drug Convention, and the UN Convention against Transnational Organized Crime.

Nepal

Nepal is not a regional financial center. Government corruption, poorly regulated trade, weak financial sector regulation, and a large informal economy make the country vulnerable to money laundering and terrorist financing. The major sources of laundered proceeds stem from tax evasion, corruption, counterfeit currency, smuggling, and invoice manipulation. There is a large, unregulated, informal remittance system in Nepal, which is also vulnerable to money laundering and terrorist financing.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE US OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All crimes approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, securities agents, insurance agents, casinos, money remitters and changers, cooperatives, some government agencies, lawyers and notaries, auditors and high value metals and stone traders

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, securities agents, insurance agents, casinos, money remitters and changers, cooperatives, some government agencies, lawyers and notaries, auditors, and high value metals and stone traders

Number of STRs received and time frame: Over 200 in 2010

Number of CTRs received and time frame: Over 1,000 per month in 2010

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: One over one year

Convictions: One over one year

Assets forfeited: criminally: None civilly: None

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Nepal is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action Task Force (FATF)-style regional body. As of September 2010, Nepal is undergoing a mutual evaluation by the APG. Its most recent completed mutual evaluation can be found here: http://www.apgml.org/documents/docs/8/Nepal%20MER%20Executive%20Summary.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Nepal has enacted anti-money laundering laws and has established a financial intelligence unit (FIU), but is still in the beginning stages of implementing an effective anti-money laundering/combating the financing of terrorism (AML/CFT) regime. Much of the financial sector lacks basic awareness of the new AML/CFT requirements and suspicious transaction reporting requirements and procedures. While the Assets Laundering Prevention Act was passed in 2008, Nepal’s FIU is still putting in place the required directives. Due to gaps in the Act, the KYC rules may not be enforceable, and the FIU directives’ provisions on customer due diligence lack sanctions for failure to comply. In addition, the Government of Nepal (GON) lacks human resource expertise and skills in the responsible agencies, particularly in investigation techniques. Nepal also lacks a comprehensive anti-terrorism law, undermining enforcement efforts.

Coordination among the key government agencies is weak. The Nepal Police have no direct role in money laundering enforcement, which is the responsibility of the Department of Revenue Investigation, which also oversees tax enforcement. Tax evasion is rampant in Nepal, and the Department of Revenue Investigation’s dual role inhibits money laundering enforcement as financial institutions and individuals are reluctant to provide relevant information.

As a matter of practice, only banks receive the UN list of designated terrorists and terrorist entities; most money transmitters, foreign exchange dealers, cooperatives, and other non-bank financial institutions do not receive the lists. In addition, most financial institutions do not have real-time checks of UN designated entities.

FIU officials have identified under-and-over invoicing as a major money laundering challenge. The FIU is in the process of developing an e-reporting system to help improve data collection, but the system will not be functional for another one or two years.

Netherlands

The Netherlands is a major financial center and consequently an attractive venue for laundering funds generated from illicit activities. These activities are often related to the sale of cocaine, cannabis, or synthetic and designer drugs (such as ecstasy). Financial fraud, especially tax-evasion, is believed to generate a considerable portion of domestic money laundering, and there is increasingly less evidence of trade-based money laundering. There are no indications of syndicate-type structures in organized crime or money laundering, and there is virtually no black market for smuggled goods in the Netherlands. In 2009, the number of suspicious transfers was at the lowest level in seven years. Although under the Schengen Accord there are no formal controls on national borders within the European Union (EU), the Dutch authorities run special operations in the border areas with Germany and Belgium to keep smuggling to a minimum.

Six islands in the Caribbean fall under the jurisdiction of the Kingdom of the Netherlands. Bonaire, St. Eustasius, and Saba are special municipalities of the country the Netherlands. Aruba, Curacao, and St. Maarten are countries within the Kingdom of the Netherlands.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: NO

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, exchange offices, casinos, money service businesses, lawyers, notaries, tax specialists, accountants, life insurers, trust and company service providers, credit card companies

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, credit institutions, securities institutions, investment institutions, money transaction offices, providers of money transaction services, life insurers and insurance brokers, credit card companies, casinos, traders in high-value goods, other traders, accountants, lawyers, business economic consultants, tax consultants, real estate brokers, estate agents, civil-law notaries, independent legal consultants, trust and asset administrative companies

Number of STRs received and time frame: 164,000 in 2009

Number of CTRs received and time frame: 32,100 in 2009

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 770 January through June 2009

Convictions: 328 January through June 2009

Assets forfeited: criminally: 50 million euro (approximately $64.9 million) in 2009

civilly: Not applicable

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

The Netherlands is a member of the Financial Action Task Force (FATF). In lieu of an evaluation by the FATF, the International Monetary Fund (IMF) prepared a Report on the Observance of Standards and Codes (ROSC). The Netherlands underwent a new FATF evaluation in 2010 that is not available as of yearend 2010. The ROSC can be found here: http://www.imf.org/external/pubs/ft/scr/2004/cr04312.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

In June 2008, the Netherlands Court of Audit published its investigation of the Government of the Netherland’s policy for combating money laundering and terrorist financing. The report criticizes the Ministries of Interior, Finance, and Justice for: lack of information sharing among them; too little use of asset seizure powers; limited financial crime expertise and capacity within law enforcement; and light supervision of notaries, lawyers, and accountants. The ministries agreed in large part with these conclusions and are taking steps to address them.

The Netherlands has established an “unusual transaction” reporting system. Designated entities are required to file unusual transaction reports (UTRs) with the Netherlands’ financial intelligence unit (FIU) on any transaction that appears unusual (applying a broader standard than “suspicious”) or when there is reason to believe that a transaction is connected with money laundering or terrorist financing. The FIU investigates UTRs and forwards them to law enforcement for criminal investigation; once the FIU forwards the report, the report is then classified as a suspicious transaction report (STR).

The United States enjoys strong cooperation with the Netherlands in fighting international crime, including money laundering. The Netherlands has ratified the bilateral implementing instruments for the U.S.-EU mutual legal assistance agreement (MLAT) and extradition treaties. The U.S.-EU MLAT came into force in February 2010. One provision included in the U.S.-EU MLAT will facilitate the exchange of information on bank accounts. The Dutch Ministry of Justice and the National Police work together with U.S. law enforcement authorities in the Netherlands on operational money laundering initiatives.

While historically Dutch public prosecutors have moved to seize assets in only a small proportion of money laundering cases, the recent assignment of two dedicated money laundering prosecutors is slowly bringing change. The limited asset seizure is due to a shortage of trained financial investigators and a compartmentalized approach where the financial analysts and operational drug investigation teams often do not act in unison. In order to further increase the confiscation of criminal assets, the Dutch Minister of Justice has introduced a new law, currently before Parliament, that introduces confiscation as a standard procedure of any money driven criminal case, increasing the capacity within law enforcement agencies to take such actions.

Financial institutions do not receive the UN list of designated terrorists directly from the Dutch government, but the Dutch Central Bank holds them responsible for implementing the EU ‘Freeze list’ (the Combined Targeted Financial Sanctions List).

In 2009, the Public Prosecution Office served a summons to suspects of money laundering offenses in 779 cases. The Netherlands Court of Audit reported in June 2009 that 87 percent of money laundering cases referred to the Office of Public Prosecution resulted in a conviction.

In a notable conviction, a Rotterdam court sentenced seven men in April 2009 for cocaine trafficking and laundering at least 22 million Euros (approximately $31,650,000). Authorities confiscated twenty properties as well as $3.6 million and 900,000 Euros (approximately $1,295,000) in cash. In August 2009, the Public Prosecutor’s office in Maastricht confiscated 134 properties and pieces of land from a real estate dealer suspected of money laundering, cannabis cultivation and tax fraud. This is reportedly the largest judicial seizure of property ever in the Netherlands.

New Zealand

New Zealand is not a major regional or offshore financial center, and most financial activities are domestic. The financial sector includes a small number of registered banks, most of which are Australian-owned, as well as non-bank deposit takers, insurance companies, securities dealers, money remitters, and currency exchangers. New Zealand also has a small number of casinos, which operate gaming machines and a variety of table games. Money laundering cases are infrequent in New Zealand. However, authorities note that it is difficult to estimate the extent of money laundering activities, since every serious crime that generates proceeds could lead to a money laundering offense.

Money laundering mostly occurs through the financial system, but the purchase of real estate and other high value assets, as well as the use of foreign exchange dealers has become an increasingly popular method of laundering money. Narcotics proceeds (mostly from methamphetamine and cannabis sales) and fraud-associated activity (primarily Internet-banking fraud) are the primary sources of illicit funds. International organized criminal elements, mostly from Asia, are known to operate in New Zealand, but not to a wide extent. New Zealand is a low threat environment for terrorist finance. New Zealand is actively taking measures to comply with international standards and strengthening its ability to detect and deter money laundering and terrorist financing.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, exchange offices, and money service businesses; credit card companies; mortgage lenders; casinos; securities brokers/dealers; safekeeping; asset and individual or collective portfolio managers; and, life insurance or other investment related insurance

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, exchange offices, and money service businesses; credit card companies; mortgage lenders; casinos; securities brokers/dealers;, safekeeping; asset and individual or collective portfolio managers; and, life insurance or other investment related insurance

Number of STRs received and time frame: Approximately 3,040 (January 1-August 31, 2010)

Number of CTRs received and time frame: Not applicable

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

New Zealand is a member of the Financial Action Task Force (FATF) and the Asia/Pacific Group on Money Laundering, a FATF-style regional body. Its most recent mutual evaluation can be found here: http://www.fatf-gafi.org/dataoecd/1/61/43998312.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

With the enactment of the AML/CFT legislation (AML/CFT Act), New Zealand is working to bring its legal framework in line with international standards. Although the AML/CFT Act is in force, these requirements do not come into full effect until December 2012 to give industry time to come into compliance. The effectiveness of this legislation and its implementation will not be fully known until that time.

The AML/CFT Act allows for civil penalties as decided by the court, which is payable to the Crown or to any other person specified by the Court.

New Zealand and the United States do not require a bilateral mutual legal assistance treaty (MLAT) to enter into a mutual assistance relationship. The United States has been designated as a “prescribed foreign country” in New Zealand’s Mutual Assistance in Criminal Matters Act 1992, enabling New Zealand to process requests for assistance from the United States on a reciprocal basis. In practice, New Zealand and U.S. authorities have a good record of cooperation and information sharing in this area.

Nicaragua

The Republic of Nicaragua is not considered a regional financial center. It continues to be a transshipment route for South American cocaine and heroin destined for the United States and cash returning to South America. Open source reports suggest the narcotics trade is increasingly linked to arms trafficking. Money laundering is primarily related to proceeds from illegal narcotics and political corruption. There is no indication that money laundering is being used to fund terrorist activities. There is no significant evidence to believe a market for smuggled goods exists in Nicaragua.

Nicaragua’s geographic location makes it an ideal haven for transnational organized crime groups, including human and drug trafficking organizations. The Central America Four Agreement between El Salvador, Guatemala, Honduras, and Nicaragua allows for free movement of the citizens of these countries across their respective borders without passing through immigration or customs inspection. As such, the agreement represents a vulnerability to each country for the cross-border movement of contraband and illicit proceeds of crime. Furthermore, corruption and the politicization of the judicial system, the Supreme Court in particular, continue to seriously impede anti-money laundering law enforcement efforts in Nicaragua.

Nicaragua is not considered an offshore financial center. The Nicaraguan Government reports that, as of December 15, 2010, there are 125 companies operating in free trade zones (FTZs) throughout Nicaragua and a total of 49 industrial parks, directly employing approximately 75,000 workers, up from 72,000 workers as of June 2009. Most FTZs are located in Managua and approximately 78% belong to the textile and apparel sector. The National Free Trade Zone Commission, a government agency, regulates all FTZs and the companies operating in them. The Nicaraguan Customs Agency monitors all FTZ imports and exports. It is suspected that money laundering occurs via “traditional” mechanisms such as legal businesses; however, there have been no convictions for money laundering in either sector. There are no reported hawala or other similar alternative remittance systems operating in Nicaragua, however, some evidence exists that there are informal “cash and carry” networks for delivering remittances from abroad that may be vulnerable to, or indicative of, money laundering.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, financial institutions, credit institutions, stock exchange systems, savings and loan cooperatives, brokerage firms, money exchangers, casinos, and pawn shops

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, financial institutions, credit institutions, stock exchange systems, savings and loan cooperatives, brokerage firms, money exchangers, casinos, and pawn shops

Number of STRs received and time frame: 360 - January through November 2010

Number of CTRs received and time frame: N/A

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Eight - January to October 2010

Convictions: Seven - January to October 2010

Assets forfeited: criminally: $1,742,700 - January 2010 to November 2010 civilly: N/A

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Nicaragua is a member of the Caribbean Financial Action Task Force (CFATF), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.cfatf-gafic.org/downloadables/mer/Nicaragua_3rd_Round_MER_%28Final%29_English.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Statutes enacted to criminalize money laundering and terrorist financing lack sufficient enforcement due to weak enforcement mechanisms and a corrupt judicial system. There were at least two money laundering/drug trafficking cases in which convicted drug traffickers’ sentences were reduced or dismissed by appellate judges under suspicious circumstances.

The law against organized crime has many enforcement deficiencies including not requiring mandatory reporting of suspicious transactions or customers to authorities. The Government has enacted institutional regulations to address some deficiencies but the regulations are weak and lack enforcement capacity grounded in Nicaraguan law. While the law grants the Financial Analysis Commission the ability to monitor other financial institutions it lacks the resources or the power to enforce regulations. Nicaragua does not have a financial intelligence unit. STRs are filed with the National Police Directorate.

Nicaragua did not identify, freeze, seize, and/or forfeit assets in 2010. Asset forfeiture provisions do not include the ability to freeze terrorist assets without delay.

Niger

Niger is not a regional financial center, and its banking sector is rudimentary. It is a member of the Central Bank of West African States (BCEAO), and shares its central bank and currency with other countries in the region. High transaction costs deter businesses from placing large amounts of cash in the banking system. Most economic activity takes place in the informal financial sector.

Money laundering and financial crimes are commonplace in Niger. The country is primarily a transit country for funds related to the trafficking of narcotics and other forms of contraband. Niger is one of the poorest and least developed countries in the world and is not a significant source of criminal proceeds. Since 2008, kidnappings for ransom have become a preferred fundraising method for terrorist groups.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Public Treasury and State Savings Deposit institutions; BCEAO; banks, microfinance institutions, and money exchanges; insurance companies and brokers; securities exchanges or brokers; post office; mutual funds and fixed capital investment companies; lawyers, asset or fund custodians, and management and intermediation firms; business brokers for financial entities, auditors, and real estate agents; high-value goods dealers; fund carriers; owners or managers of casinos; travel agencies; and, NGOs

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Public Treasury and State Savings Deposit institutions; BCEAO; banks, microfinance institutions, and money exchanges; insurance companies and brokers; securities exchanges or brokers; post office; mutual funds and fixed capital investment companies; lawyers, asset or fund custodians, and management and intermediation firms; business brokers for financial entities, auditors, and real estate agents; high-value goods dealers; fund carriers; owners or managers of casinos; travel agencies; and, NGOs

Number of STRs received and time frame: Two in 2009 and one in 2010

Number of CTRs received and time frame: None

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Two in 2007

Convictions: One in 2008

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: YES

Niger is a member of the Intergovernmental Action Group against Money Laundering in West Africa (GIABA), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found at: http://www.giaba.org/

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Niger’s money laundering and terrorist financing laws are not in full compliance with international standards. Niger participates in international law enforcement cooperation, mutual legal assistance, and asset sharing groups within the region, but does not have bilateral arrangements with the United States. On January 21, 2010, Niger enacted Law # 2010-05 on Terror Financing. This law sets in place a legal framework addressing cross-border transportation of currency as well as charities and nonprofit organizations.

The National Center for the Treatment of Financial Information (CENTIF), Niger’s FIU, has accomplished little since it was established in 2004. Only two of the eight reports of suspicious activities received since CENTIF’s creation were judged sufficiently serious to merit legal action, leading to one conviction. The CENTIF has also suffered setbacks: the office and records of an ongoing investigation were destroyed by a fire; and it has been forced to move locations twice. CENTIF’s president has emphasized the organization’s lack of capacity and funding.

Although addressed in the AML/CFT laws, customer due diligence procedures for designated non-financial businesses and professions have not been implemented.

Nigeria

Nigeria is a major drug trans-shipment point and a significant center for criminal financial activity. Individuals and criminal organizations take advantage of the country's location, porous borders, weak laws, corruption, lack of enforcement, and poor socio-economic conditions to launder the proceeds of crime. The proceeds of illicit drugs in Nigeria derive largely from foreign criminal activity rather than domestic activities. One of the schemes used by drug traffickers to repatriate and launder their proceeds involves the importation of various commodities, predominantly luxury cars and other items such as textiles, computers, and mobile telephone units.

Proceeds from drug trafficking, oil theft or bunkering, bribery and embezzlement, contraband smuggling, theft, corruption, and financial crimes, such as bank fraud, real estate fraud, and identity theft, constitute major sources of illicit proceeds in Nigeria. Advance fee fraud, also known as "419" fraud in reference to the fraud section in Nigeria's criminal code, remains a lucrative financial crime that generates hundreds of millions of illicit dollars annually. Money laundering in Nigeria takes many forms, including investment in real estate; wire transfers to offshore banks; political party financing; deposits in foreign bank accounts; use of professional services, such as lawyers, accountants, and investment advisers; and cash smuggling. Nigerian criminal enterprises use a variety of ways to subvert international and domestic law enforcement efforts and evade detection.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All crimes approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING: NO

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, community banks, mortgage institutions, development finance banks, financial service companies, bureaux de change; the insurance, and securities and investment industries; discount houses; finance companies; money brokerages; factoring, project and export financing, and equipment leasing; debt and pension fund administration; fund and investment management; private ledger services; project consultancy; estate agents; lawyers; accountants; and, casinos

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, community banks, mortgage institutions, development finance banks, financial service companies, bureaux de change; the insurance, and securities and investment industries; discount houses; finance companies; money brokerages; factoring, project and export financing, and equipment leasing; debt and pension fund administration; fund and investment management; private ledger services; project consultancy; estate agents; lawyers; accountants; and, casinos

Number of STRs received and time frame: 2,084 in 2010

Number of CTRs received and time frame: 13,575,712 in 2010

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Ten in 2010

Convictions: 0

Assets forfeited: criminally: 0 civilly: 0

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Nigeria is a member of the Intergovernmental Action Group Against Money Laundering in West Africa (GIABA), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.giaba.org/index.php?type=c&id=49&mod=2&men=2

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Corruption continues to be a significant problem. Weak law enforcement and long delays within the justice sector have hindered the progress of many prosecutions and investigations. Additionally, Nigerian legislation does not provide safe harbor for financial institutions, or their employees, who file STRs in good faith. The GON should amend its legislation to include safe harbor provisions. In 2010, there were no money laundering convictions. The National Assembly should adopt the proposed Special Courts Bill that will establish a special court with specific jurisdiction and trained judges to handle financial crimes, and should consider passing amendments to the Money Laundering Prohibition Act, 2004.

Nigeria does not have an asset forfeiture fund. Consequently, seized assets remain in the custody of the seizing agency until they revert to the Government of Nigeria (GON). Due to lack of proper accountability, forfeited assets are sometimes lost or stolen.

Nigeria’s failure to criminalize terrorist financing limits its ability to inhibit terrorism-related activity. Additionally, Nigeria is not able to freeze terrorist assets in accordance with UNSCR 1267. The GON should enact appropriate laws, such as the Prevention of Terrorism Bill, to correct these deficiencies.

Niue

Niue is a self-governing democracy, operating in free association with New Zealand. The Government of Niue (GON) relies heavily on New Zealand to assist with external and economic affairs. Niue is not a regional financial center and has no free trade zones. The country has experienced a significant decline in population, largely from the emigration of its population to New Zealand.

Job opportunities in the formal sector generally are limited to government service or small industry. Niue sought to increase revenue by expanding its financial services sector, including offshore banking. This move resulted in significant money laundering and terrorist financing vulnerabilities, and the GON eliminated offshore banking in 2002.

Niue has in recent years tightened its legislation and formed a financial intelligence unit (FIU) to comply with international standards against money laundering and terrorist financing.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: Not available

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: Not available

UN lists of designated terrorists or terrorist entities distributed to financial institutions: Not available

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Financial institutions; safe deposit box, trust and company service providers, and individual funds trustees; insurers and insurance intermediaries; securities dealers, futures brokers, money exchangers and remitters; issuers, sellers, or redeemers of travelers checks, money orders, or similar instruments; payroll and payroll funds delivery businesses; dealers in precious metals and stones; real estate agents; casinos and gambling houses (including internet gaming); lawyers, notaries, and accountants engaged in real estate, client financial management, and the creation, operation and management of companies; and legal persons and arrangements

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Financial institutions; safe deposit box, trust and company service providers, and individual funds trustees; insurers and insurance intermediaries; securities dealers, futures brokers, money exchangers and remitters; issuers, sellers, or redeemers of travelers checks, money orders, or similar instruments; payroll and payroll funds delivery businesses; dealers in precious metals and stones; real estate agents; casinos and gambling houses (including internet gaming); lawyers, notaries, and accountants engaged in real estate, client financial management, and the creation, operation and management of companies; and legal persons and arrangements

Number of STRs received and time frame: Not available

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: YES

Niue is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action Task Force (FATF)-style regional body. A copy of its most recent evaluation is not currently available. A new evaluation is scheduled for fourth quarter 2011.

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Niue Financial Intelligence Unit has been active since 2006 and is exchanging financial intelligence related to money laundering and financing of terrorism with the New Zealand FIU.

The Niue Crown Law office reports it has received a small number of cash transaction reports. However, it is not apparent that any prosecutions or asset seizures have occurred under its anti-money laundering/counter-terrorist financing (AML/CFT) legislation.

Niue is not a member of the United Nations. Niue generally complies with international AML/CFT standards, and AML/CFT legislation includes the 2004 United Nations Sanctions Regulations (Terrorism Suppression and Afghanistan Measures).

Norway

Although it is a high income country, Norway is not considered a regional financial center. Norway’s significance in terms of money laundering is low. There are illicit proceeds related to narcotics sales and production, prostitution, robberies, smuggling, and white collar crimes like embezzlement, tax evasion and fraud. Criminal proceeds laundered in the jurisdiction derive primarily from domestic criminal activity, often by foreign criminal gangs or guest workers who in turn remit the proceeds home. Money laundering and terrorist financing primarily occur through exchange houses and banks, but also to an increasing degree, through alternative remittance systems such as hawala.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: NO

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, the Central Bank, finance companies, emoney institutions, pension funds, postal operators, auditors, asset managers, securities dealers, credit agents, money exchangers, insurance companies, accountants, lawyers, notaries, auction houses, realtors, money transporters, holding houses, dealers in autos and high-value goods

Enhanced due diligence procedures for PEPs: foreign: YES domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, the Central Bank, finance companies, emoney institutions, pension funds, postal operators, auditors, asset managers, securities dealers, credit agents, money exchangers, insurance companies, accountants, lawyers, notaries, auction houses, realtors, money transporters, holding houses, dealers in autos and high-value goods

Number of STRs received and time frame: 5,294 through the third quarter of 2010

Number of CTRs received and time frame: 3,681 in 2009

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Norway is a member of the Financial Action Task Force (FATF). Its most recent mutual evaluation can be found here: http://www.fatf-gafi.org/document/14/0,3343,en_32250379_32236963_43177166_1_1_1_1,00.html

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The FIU voices some concern over the low number and poor quality of reports from certain entities covered by the reporting obligation. Banks, auditors and insurance companies maintain high levels of reporting, while reports from dealers in cars and other expensive items is low and decreasing. Reporting from attorneys is up, but low compared to the high number of transactions covered by this sector. The FIU is attempting to improve the quality of STR reporting by providing specific guidance and follow up to obligated entities. Although aggregate data is not available, for the size of the Norwegian economy the number of money laundering prosecutions and convictions is low.

According to the Norwegian police, institutions’ individual compliance departments are responsible for obtaining information on the UN lists of designated terrorists and terrorist entities.

Oman

Oman is not a regional or offshore financial center and does not have significant money laundering or terrorist financing concerns. Due to its location on the tip of the Strait of Hormuz, Oman is home to a small number of smugglers operating between Musandam, the northern-most exclave of Oman, and Iran. Trade is generally financed in small amounts of cash. There is also a small amount of narcotics trafficking in Oman, although the government is proactive in tracking and prosecuting drug traffickers. Sources of illegal proceeds are generally small and derived from smuggling or drug trafficking activities. Hawaladars based in Oman that have been involved with illicit transfers for terrorist financing purposes have been closed down by Omani authorities.

As of March 2010, Oman had a total of 17 licensed banks with 428 operating offices. In 2009, Oman’s three largest banks accounted for 65 percent of total assets and credit, 58 percent of total deposits and had combined assets of $23.8 billion.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks; foreign exchange companies; investment and credit companies; insurance companies; companies and individuals providing financial services; stock and securities brokers; real estate brokers; dealers in gold, precious metals and stones; notary publics; lawyers and accountants

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks; foreign exchange companies; investment and credit companies; insurance companies; companies and individuals providing financial services; stock and securities brokers; real estate brokers; dealers in gold, precious metals and stones; notary publics; lawyers and accountants

Number of STRs received and time frame: Not available

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 23 in 2009

Convictions: 13 in 2009

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Oman is a member of the Middle East North Africa Financial Action Task Force (MENAFATF), a FATF-style regional body. Oman was evaluated in 2010. Once adopted, the mutual evaluation will be found here: http://www.menafatf.org

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of Oman is steadily improving its legal system related to AML/CFT, including a 2010 overhaul of its legislation. Through the new AML/CFT law, Oman has retooled its legal, regulatory and enforcement mechanisms to accord with international standards. The Omani government is generally transparent regarding its AML/CFT enforcement efforts, although it does not publish information regarding suspicious transactions and criminal prosecutions. The Omani authorities should hasten efforts to finalize steps aimed at empowering the financial intelligence unit to enhance its operational capability. Growing Iranian overtures toward Oman for increased trade and engagement may create conditions for AML/CFT concerns.

In July 2010, Oman issued Royal Decree number 79/2010, which enacts new comprehensive AML/CFT legislation. The AML/CFT Act consolidates Oman’s previous anti-money laundering and terrorist financing laws, creates a national committee for combating money laundering and terrorist financing, and codifies Oman’s “safe harbor” and mutual legal assistance regulations. The Act also names the Financial Investigations Unit in Royal Oman Police, created in 2008, as the responsible entity for enforcing AML/CFT laws and regulations.

Oman should become a party to the UN Convention against Corruption and the UN International Convention for the Suppression of the Financing of Terrorism.

Pakistan

Pakistan continues to suffer from financial crimes related to narcotics trafficking, terrorism, smuggling, tax evasion, corruption, counterfeit goods and fraud. Pakistani criminal networks play a central role in the transshipment of narcotics and smuggled goods from Afghanistan to international markets. The abuse of the charitable sector, trade-based money laundering, use of hawala/hundi, and physical cross-border cash transfers are common methods used to launder money and finance terrorism in Pakistan and the region. Pakistan’s real estate sector is also a popular destination for illicit funds, as many real estate transactions are poorly documented. Pakistan does not have firm control of its borders with Afghanistan, Iran or China, which facilitates the flow of smuggled goods to and from the Federally Administered Tribal Areas (FATA) and Baluchistan. Some consumer goods transiting Pakistan duty-free under the Afghan Transit Trade Agreement are funneled off to be sold illegally in Pakistan. As madrassas (Islamic schools) lack oversight, they have been used as training grounds for terrorists and for terrorist funding, which allows terrorist and militant organizations to receive financial support under the guise of support of Islamic education.

Money laundering and terrorist financing often occur in Pakistan via an overlap of the hundi/hawala alternative remittance system and the formal banking system. The State Bank of Pakistan (SBP) requires all hawaladars to obtain licenses and meet minimum capital requirements. Despite this requirement, few hawalas have been registered by the authorities, and unlicensed hawaladars continue to operate illegally throughout Pakistan (particularly Peshawar and Karachi). Fraudulent invoicing is typical in hawala/hundi counter-valuation schemes. Legitimate remittances from Pakistani expatriates residing abroad now flow mostly through the formal banking sector and through licensed money transmitting businesses. According to authorities, in calendar 2010, remittances through formal channels totaled $9.7 billion, out of an estimated total of $14 billion.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: YES

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks (conventional and Islamic, micro-finance banks, development finance institutions), exchange companies, securities markets, non-bank financial companies, and insurance companies

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Any institution: accepting deposits; lending; financial leasing; issuing and managing of means of payment, including credit and debit cards and electronic money; transferring money or value; changing money or currency; participating in share issues and providing services in relation to share issues; engaging in portfolio management; conducting insurance transactions; or carrying out business as an intermediary

Number of STRs received and time frame: Not available

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 0 in 2010

Convictions: 0 in 2010

Assets forfeited: criminally: None civilly: None

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: NO

Pakistan is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://apgml.org/documents/docs/17/Pakistan%20MER%20-%20final%20version.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Pervasive corruption and a lack of political will continue to be the two primary obstacles to an effective anti-money laundering and counter-terrorist financing regime in Pakistan. Pakistan ranks 143 out of 178 countries surveyed in Transparency International’s 2010 International Corruption Perception Index. Considering the extent of the financial crime and terrorist financing challenges facing Pakistan, the absence of prosecutions and convictions is telling.

During 2010, the FATF identified Pakistan as a jurisdiction with significant AML/CFT vulnerabilities. In response, the Pakistani government expressed high-level political commitment to address deficiencies in its AML/CFT regime. Despite the passage of the Anti-Money Laundering Act of 2010, legislative shortcomings are pervasive and should be addressed accordingly. Additionally, Pakistan’s lack of police and judicial capacity contributes to its lack of prosecutions and convictions. Pakistan’s financial intelligence unit (FIU) must be strengthened and should be given operational autonomy. The FIU also needs a strong information technology infrastructure to aid in the core functions of collection, analysis and dissemination of financial intelligence. Suspicious and currency transaction reporting should be fully implemented, comprehensive and actionable. Pakistani law enforcement should not, however, become dependent on these reports to initiate investigations; rather, law enforcement authorities should be proactive in pursuing money laundering and terrorist financing in their field investigations. Restrictive information-sharing rules both within the interagency and with foreign counterparts hinder international cooperation.

The Anti-Terrorist Act (ATA) allows the Pakistani government to ban a fund, entity or individual on the grounds of involvement with terrorist activity and permits freezing of accounts. Although legally allowed, there have been deficiencies concerning the timeliness and thoroughness of the asset freezing regime and no formal system is in place to implement an asset forfeiture regime. Section 11B of the ATA specifies that an organization is proscribed or listed if and when the GOP has reason to believe it is involved with terrorism. In light of the role private charities have played in terrorist financing, Pakistan must work quickly to conduct outreach, supervise, and monitor charitable organizations and their activities. Meaningful action should be taken to shut down internationally designated charities and prevent their reopening.

At present there is no requirement to declare inbound currency. Pakistan’s relatively strict currency exportation requirements may lead hawaladars to export foreign currency out of the country by other means, including smuggling it across the porous border with Afghanistan. Pakistan should implement and enforce inbound and outbound cross-border currency reporting requirements and focus greater efforts on identifying and targeting illicit cash couriers.

Palau

Palau is not a regional or offshore financial center. The primary sources of illegal proceeds are consumer marijuana sales, prostitution, and illegal fishing by unlicensed foreign vessels. Corruption in the governmental sector includes the misuse of government funds and cronyism, in part due to Palau’s small size and extensive family networks. Palau is a low-risk jurisdiction for organized crime and terrorist financing.

Palau has one free trade zone, the Ngardmau Free Trade Zone (NFTZ). A public corporation, Ngardmau Free Trade Zone Authority, oversees the development of the NFTZ and issues licenses for businesses to operate there. NFTZ licensing exempts businesses from Foreign Investment Act requirements and certain import and export taxes. To date, no development has taken place within the area designated for the free trade zone and the NFTZ directors continue to search for developers and investors.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: NO

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, credit unions, and money remitters

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, credit unions, money remitters, and non-governmental organizations

Number of STRs received and time frame: Not available

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Palau is a member of the Asia/Pacific Group on Money Laundering (APG), a FATF-style regional body. Its most recent mutual evaluation can be found here:

http://www.apgml.org/documents/docs/17/Palau%202008.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Money Laundering Prevention and Control Act (MLPCA), amended in 2007, addresses many of the deficiencies in the Government of Palau’s (GOP) AML/CFT regime but does not include all predicate crimes prescribed in the international standards. However, the stronger measures are hampered by a lack of human, financial, and structural capacity, along with an absence of implementing regulations.

Significant deficiencies remain in the areas of customer due diligence (CDD), record keeping, monitoring of transactions, and supervision. The Financial Institutions Commission (FIC) is the AML/CFT supervisor, but it does not have the resources to ensure AML/CFT compliance nor to issue any regulations. The designated non-financial businesses and professions (DNFBPs) operating in Palau are not covered by the MLPCA.

The Palau Financial Intelligence Unit (FIU) is responsible for receiving and analyzing SARs, along with tracing, seizing, and freezing assets, but lacks a dedicated budget and staff. The GOP, with assistance from the Pacific Anti-Money Laundering Program (PALP) mentor, organized a multi-agency SAR review team to review the reports and help identify and initiate investigations. The multi-agency approach has enabled the FIU to function given its limitations of manpower and funding, and has fostered information sharing and joint investigations between the relevant law enforcement agencies. It is not, however, a long-term solution, and the GOP should dedicate funds and permanent staff to the FIU.

The Cash Courier Disclosure Act has been used successfully by Palau Customs and Security to make bulk cash currency seizures at the airport. The GOP should extend its excellent monitoring of the airport to all its border points of entry and exit to protect against the smuggling of bulk cash, narcotics and other contraband.

Palau’s Counter-Terrorism Act specifically addresses its obligation under UN Security Council Resolution 1373. However, it does not adequately address provisional measures of seizing of evidence and property and the freezing of capital and financial transactions related to the financing of terrorism. Palau should strengthen its ability to freeze and confiscate assets related to the financing of terrorism. The GOP should circulate the UNSCR 1267 Sanctions Committee’s consolidated list of terrorist entities. Palau should also become a party to the 1988 UN Drug Convention, the UN Convention against Corruption, and the UN Convention against Transnational Organized Crime.

Panama

Panama’s strategic geographic location and its economic openness make it a natural location for laundering money derived from drug sales. However, location is only one reason for Panama’s attractiveness for money launderers. Panama is promoting itself as the new hub for Central America because it is a leader in developing the physical and financial infrastructure that go with that role. The Colon Free Trade Zone is the second largest free trade zone in the world and the major airline, Copa, is expanding international and local flights. The financial sector is increasing direct marketing efforts to attract regional financial institutions. This current and future access to infrastructure and global connections attracts international clients who know how to use financial and commercial accounts for money laundering.

During 2010, Panama made progress on the policy front in improving the transparency of its financial system. The Government of Panama (GOP) is working diligently to ensure its removal from the OECD’s grey list by signing a Tax Information Exchange Agreement (TIEA) with the United States in November and signing Double Taxation Treaties (DTTs), which include similar information exchange provisions, with 13 other OECD members. It is drafting new anti-money laundering legislation and strengthening its financial intelligence unit’s authority. Panama still has unregulated parallel market exchanges like hawalas.

Unfortunately, the lack of enforcement of Panamanian banking and anti-money laundering laws undercuts the policy progress the GOP has made. The very factors that contribute to Panama’s economic growth and financial sector sophistication – the dollar-based economy, the large number of offshore banks and shell companies, loosely regulated free trade zones, and sustained growth in the ports and maritime industries – are also mechanisms that are vulnerable to abuse for money laundering and other illicit financial activities. Legislation that allows bearer share corporations remains in effect and provides a near impenetrable corporate veil for shareholders. In addition, corruption and weak regulatory bodies impede Panama’s progress toward a more transparent economy.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.?: YES

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, savings cooperatives, savings and mortgage banks, and money exchanges; investment houses and brokerage firms; insurance and reinsurance companies; fiduciaries; casinos; free trade zones; finance companies; and real estate brokers

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, cooperatives, and money exchanges, casinos, fiduciaries; insurance companies, government entities focused on the lottery, and investment houses

Number of STRs received and time frame: 944 in 2009

Number of CTRs received and time frame: Not available

MONEY LAUNDERINGCRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: 0

Assets forfeited (seized): criminally: $41 million in 2010 civilly: Not applicable

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

In July 2010 Panama became a member of the Financial Action Task Force on money laundering in South America GAFISUD, a Financial Action Task Force (FATF)-style regional body. It moved from the Caribbean Financial Action Task Force to the GAFISUD because the authorities felt it shared more goals and problems with the GAFISUD members. Its most recent mutual evaluation report can be found here:

http://www.cfatf-gafic.org/downloadables/mer/Panama_3rd_Round_MER_(Final)_English.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Panama allows the use of bearer shares and shell company structures based on bearer shares to provide privacy for share holders. These structures are very vulnerable to abuse by criminal groups to launder funds. Panama took steps in 2010 to enhance the transparency of its financial system. In addition to the signature of the TIEA with the U.S. and DTTs with other OECD members, the GOP enacted legislation (Law 33 of July 2010) which requires banks and law firms to share transaction and ownership information with the GOP and authorizes the sharing of such information with foreign tax authorities pursuant to TIEA requests. Law 33 complements existing “know your customer” requirements.

Panama allows the transfer of seized assets to other countries when the seizure occurs in the course of an investigation conducted pursuant to a mutual legal assistance request. One asset transfer example occurred in April 2010 in a New York investigation led by the United States Department of Justice which led to the seizure of approximately $40 million worth of gold, jewelry and assorted gemstones. The assets were seized by the GOP at the request of the U.S. Government, and eventually repatriated to the U.S. Government in recognition of forfeiture orders entered by the United States Attorney’s Office for the Southern District of New York.

Panama’s judicial system has not sentenced anyone under the current money laundering laws. In October, 2010, a former municipal employee and accomplices were brought up on charges of laundering approximately $2 million using a corporate entity. Other recent cases were either dismissed or are still under investigation.

The Colon Free Trade Zone (CFZ) continues to be vulnerable to illicit financial activities in part because of the following practices: the ease of third party payments made by an intermediary apparently unrelated to the seller or purchaser; use of amended internal credit documents without reasonable justification; customers not required to produce appropriate documentation (e.g., invoice) to support a requested transaction; significant discrepancies exist between transport document information and the invoice; the long-awaited electronic transaction recording information system is operational but not widely used – a total of 5,000 keys to the electronic system were provided to CFZ companies, but most continue to submit transaction information in hard-copy format ; and, the ease with which bulk cash can be brought into Panama through the main international airport by declaring it is for use in the CFZ.

The several anti-money laundering regulatory bodies do not communicate well. Panama’s FIU (the UAF), Superintendencia, Banker’s Association, Customs, Consejo and the Judiciary branches do not know each other’s roles and responsibilities.

The UAF is overworked and lacks adequate resources to process, let alone enforce the required reporting. UAF is developing new software that will allow covered entities to submit their STRs electronically. Submissions currently must be made in hard copy with supporting electronic documentation included in CD format.

Money laundering, in and of itself, is still not a priority with the Panamanian Customs Authority. As long as money is properly declared, it flows easily across Panama’s borders. U.S. law enforcement agencies believe millions of dollars in cash and monetary instruments are declared openly upon entry at Panama’s airport without prompting further investigation by Panama’s Customs Authority. There were numerous press reports on corrupt customs/immigration officials during 2010. In October, Panama passed Law 67 which, among other actions, now requires the declaration of cash valued at $10,000 or over when leaving the country.

Panama cooperates with U.S. law enforcement agencies. There is increasing bilateral cooperation such as maritime operations and the partnership of the Panamanian and US Trade Transparency Units (TTU). Established in 2010 by U.S. Immigration and Customs Enforcement, the Panamanian TTU is a vetted unit whose data mining efforts have provided investigative assistance and insights for many GOP agencies, like the UAF and Panama’s tax authority. Some examples of the TTU’s successes include: the discovery of a network of banks and exchange houses that moved euros from Colombia, using Panamanian banks, to the U.S. and Europe; the use of harmonized tariff codes for perfumes, video gaming and precious metals to identify several companies in the CFZ involved in commercial fraud and possible trade-based money laundering; and, information that reveals possible export tax incentive fraud.

Panama’s regulated financial institutions are generally not believed to be willingly involved in transactions related to the proceeds from serious crime. If the GOP continues its efforts to improve its anti-money laundering legal framework, particularly eliminating bearer shares, criminalizing “tipping off,” initiating efforts to increase prosecutions and convictions, and creating a more transparent financial network, money laundering will become more difficult within Panama’s borders.

Papua New Guinea

Papua New Guinea (PNG) is not a major financial center. It has a relatively stable banking system closely integrated with the financial systems of Australia and New Zealand. Smuggling and public corruption are problems in PNG but there is no evidence these activities generate substantial funds that are laundered. PNG is developing mechanisms to combat money laundering and terrorist financing, but still has a long way to go towards effective enforcement.

PNG is not a destination country for most drugs of abuse. Marijuana is the most commonly produced, distributed, and used illegal drug in PNG, but is seldom trafficked out of the country and doesn’t usually amount to any significant value necessitating a sophisticated laundering process. Major sources of illegal proceeds include corporate non-payment of taxes, undervaluing extractible exports, and skirting customs regulations. Papua New Guinea does not have an offshore sector, free trade zone, informal financial sector, or other area particularly vulnerable to financial crimes.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERROIRST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions:

YES

KNOW-YOUR-CUSTOMER RULES

Covered entities: Financial institutions; gambling houses, casinos, and lotteries; investment managers; real estate agents; dealers in antiquities; money brokers; attorneys when acting for a client on a financial or real estate transaction; accountants when receiving funds in the course of business relating to deposits, investments or other prescribed business

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS

Covered entities: Financial institutions; gambling houses, casinos, and lotteries; investment managers; real estate agents; dealers in antiquities; money brokers; attorneys when acting for a client on a financial or real estate transaction; accountants when receiving funds in the course of business relating to deposits, investments or other prescribed business

Number of STRs received and time frame: 1,094 in 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS

Prosecutions: None

Convictions: None

Assets forfeited: criminally: None civilly: 1.3 million Kina (approximately $504,000) in 2010

RECORDS EXCHANGE MECHANISM

With U.S.: YES

With other governments/jurisdictions: YES

Papua New Guinea is a member of the Asia/Pacific Group on Money Laundering, a Financial Action Task Force (FATF)-style regional body. Papua New Guinea was scheduled to undergo a World Bank-led mutual evaluation in late 2010.

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS

Papua New Guinea’s legal system is still developing and transitioning from traditional law and order systems based on tribal seniority and indigenous customs. Western-style legislation is being generated, but enforcing agencies significantly lack the training, funding, assets, experience, and, in many cases, education to successfully combat sophisticated organized crime. Australian authorities partner closely with PNG counterparts to advise and build capacity in these regards.

The Government of Papua New Guinea should continue its work to develop procedures to conform to international anti-money laundering/counter-terrorist financing programs and standards. PNG law enforcement, specifically the Financial Intelligence Unit and Prosecutor’s office should work to identify, disrupt, and prosecute suspected money laundering operations. Papua New Guinea should become a party to the UN Convention against Transnational Organized Crime and the 1988 UN Drug Convention.

Paraguay

Paraguay is a major drug transit country and money laundering center. A multi-billion dollar contraband trade, fed in part by endemic, institutional corruption, occurs in the border region shared with Argentina and Brazil (the Tri-Border Area) and facilitates much of the money laundering in Paraguay. While the Government of Paraguay (GOP) suspects proceeds from narcotics trafficking are often laundered in the country, it is difficult to determine what percentage of the total amount of laundered funds is generated from narcotics sales or is controlled by drug trafficking organizations, organized crime, or terrorist groups operating locally. Trade-based money laundering and the trafficking in counterfeit goods are widespread. Weak controls in the financial sector, open borders, bearer shares, casinos, a surfeit of unregulated exchange houses, lax or non-enforcement of cross-border transportation of currency and negotiable instruments, ineffective and/or corrupt customs inspectors and police, and minimal enforcement activity for financial crimes allows money launderers, transnational criminal syndicates, and possible terrorist financiers to take advantage of Paraguay’s financial system.

Ciudad del Este, on Paraguay’s border with Brazil and Argentina, represents the heart of Paraguay’s underground or “informal” economy. The area is well known for arms and narcotics trafficking and violations of intellectual property rights with the illicit proceeds from these crimes a source of laundered funds. Some proceeds of these illicit activities have been supplied to terrorist organizations. A wide variety of counterfeit goods, including household electronics, cigarettes, software, computer equipment, video games, and DVDs are imported from Asia and transported across the border into Brazil. A small amount remains in Paraguay for sale in the local economy.

Many high-priced goods in Paraguay are paid for in U.S. dollars. In addition to bulk cash smuggling, the non-bank financial sector, particularly exchange houses, is often used to move illicit proceeds both from within and outside Paraguay into the U.S. banking system. Large sums of dollars generated from normal commercial activity and suspected illicit commercial activity are also transported physically from Paraguay through Uruguay and Brazil to banking centers in the United States. The Government of Paraguay (GOP) is in the early stages of recognizing and addressing the problem of the international transportation of currency and monetary instruments derived from illegal sources, so determining what portion of U.S. dollars are related to narcotrafficking is problematic.

As a land-locked nation, Paraguay does not have an offshore sector. However, Paraguay’s port authority manages free trade ports and warehouses in neighboring countries' seaports, which are used for the reception, storage, handling, and transshipment of merchandise transported to and from Paraguay. Such free trade ports are located in Argentina (Buenos Aires and Rosario); Brazil (Paranagua, Santos, and Rio Grande do Sul); Chile (Antofagasta and Mejillones); and Uruguay (Montevideo and Nueva Palmira). About three-fourths of all goods entering and exiting Paraguay are transported by barge on the large river system that connects Paraguay with Buenos Aires (Argentina) and Montevideo (Uruguay).

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: YES

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, finance companies, insurance companies, exchange houses, stock exchanges and securities dealers, investment companies, trust companies, mutual and pension fund administrators, credit and consumer cooperatives, gaming entities, real estate brokers, nongovernmental organizations, pawn shops, and dealers in precious stones, metals, art, and antiques

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, finance companies, insurance companies, exchange houses, stock exchanges and securities dealers, investment companies, trust companies, mutual and pension fund administrators, credit and consumer cooperatives, gaming entities, real estate brokers, nongovernmental organizations, pawn shops, and dealers in precious stones, metals, art, and antiques

Number of STRs received and time frame: 781 in 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 9 in 2010

Convictions: 0

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: YES

Paraguay is a member of the Financial Action Task Force against Money Laundering in South America (GAFISUD), a Financial Action Task Force-style regional body, of which Paraguay assumed the pro tempore Presidency in December 2010. Its most recent mutual evaluation can be found here: http://www.imf.org/external/pubs/ft/scr/2009/cr09235.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The GOP took a huge step forward in regard to money laundering in June 2010 when it passed an anti-terrorism law making terrorism financing an illegal act punishable by five to fifteen years in prison.

Paraguay has shown a great deal of cooperation with U.S. law enforcement agencies. In March 2007, U.S. Immigration and Customs Enforcement created a Paraguay-based Trade Transparency Unit (TTU) to aggressively analyze, identify and investigate companies and individuals involved in trade-based money laundering activities between Paraguay and the United States. As a result of the TTU, Paraguay has identified millions of dollars of lost revenue and has helped target a criminal organization accused of supporting a terrorist entity.

Paraguay is a member of the “3 + 1” Security Group with the United States and the Tri-Border Area countries. Paraguayan and U.S. law enforcement agencies cooperate on a case-by-case basis. To date, the Paraguayan financial intelligence unit (FIU) has signed 29 MOUs with other FIUs and is in the process of signing eight more.

Prosecutors handling financial crimes have limited resources to investigate and prosecute. In addition, the selection of judges, prosecutors and public defenders is largely based on politics, nepotism, and influence peddling. The lack of interagency cooperation throughout Paraguay, and particularly within law enforcement, is an impediment to effective enforcement, prosecution, and reporting efforts.

Asset forfeiture legislation is desperately needed in Paraguay. Paraguayan law does not provide for freezing or seizure of many criminally derived assets. Law enforcement can only freeze assets of persons under investigation for a crime in which the state risks loss of revenue from furtherance of a criminal act, such as tax evasion. Enforcement agencies have limited authority to seize or forfeit assets of suspected money launderers. Assets seized or forfeited are limited to transport vehicles, such as planes and cars, and normally do not include bank accounts. When a seizure does occur, law enforcement authorities cannot dispose of these assets until a defendant is convicted. A draft bill requesting power be granted to the Secretariat for the Prevention of Money or Property Laundering (SEPRELAD) to administratively freeze assets without judicial approval is currently being reviewed by the Paraguayan Presidency. However, the administrative freeze would only be temporary unless either extended by a court order, or finalized through a conviction.

The non-bank financial sector operates in a weak regulatory environment with limited supervision. The organization responsible for regulating and supervising credit unions, the National Institute of Cooperatives, lacks the capacity to enforce compliance. Exchange houses are another non-bank sector where enforcement of compliance requirements remains limited.

There are no laws that regulate the amount of currency that can be brought into or out of Paraguay. Required customs declaration reports are seldom checked. Customs operations at the airports or overland entry points provide no control of cross-border cash movements.

Peru

Peru is not a major regional financial center, nor is it an offshore financial center. Peru ranks as the world’s second largest producer of cocaine. Peru’s financial intelligence unit (FIU) estimates approximately $3 billion in illicit proceeds moves through the Peruvian financial sector each year, accounting for approximately two percent of Peru’s gross domestic product. Eighty-four percent of this amount relates to drug trafficking, drug operations and businesses, and the remaining relates to fiscal fraud, corruption, and illegal gun dealing. As a result, to integrate these illegal proceeds into the Peruvian economy, money laundering occurs on a significant scale. As the Peruvian economy has grown, financial crimes have also increased. The most common methods of money laundering in Peru involve real estate sales, casinos, business investments, high interest loans, construction, export businesses, hotels, and restaurants. Other factors which facilitate money laundering include Peru’s cash-based and heavily dollarized economy, large informal sector, pervasive corruption, and deficient regulatory supervision of designated non-financial businesses and professions (DNFBPs), such as the informal money exchange and wire transfer services. There is a significant black market for pirated and smuggled goods in which cash transactions are the norm. Corruption remains an issue of serious concern in Peru. The Government of Peru estimates the public budget loses 15% per year due to corruption.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: YES

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, financial institutions, insurance companies, stock funds and brokers, stock and commodities exchanges, credit and debit card companies, money exchange houses, mail and courier services, travel and tourism agencies, hotels and restaurants, notaries, the customs agency, casinos, auto dealers, construction or real estate firms, notaries, and dealers in precious stones and metals

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Financial institutions; casinos; investment houses; dealers of arms, antiques, precious metals and stones; warehouses, construction and real estate firms; financial and insurance companies; travel agents; vehicle dealerships, import and export agents; credit card companies, courier and postal services, money lenders, and money exchanges; customs; mining companies; individuals and enterprises that manufacture and commercialize explosives or chemical components used in drugs and explosives; and public entities that receive funds from other than the national treasury

Number of STRs received and time frame: 2,337 in 2010

Number of CTRs received and time frame: 2.5 million in 2010

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: None

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Peru is a member of the Financial Action Task Force (FATF) for South America (GAFISUD), a FATF-style regional body. Its most recent mutual evaluation can be found at: http://www.gafisud.info/actividades.asp?offset=-1

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

In July 2010, the Government of Peru (GOP) announced a National Action Plan to combat money laundering and terrorist financing.

Peru’s bank secrecy laws remain primary obstacles to effective investigation and enforcement. A number of bills under review in the Peruvian Congress would, if enacted, lift bank secrecy provisions and allow the FIU to access all financial transactions in a timely fashion. In addition, Peru would benefit from expanded supervision and regulation of financial institutions and DNFBPs.

Two specialized prosecutors are responsible for dealing with money laundering cases within the counternarcotics section of the Public Ministry. However, to date, there has not been a money laundering conviction in Peru largely because the Banking Secrecy and Tax Secrecy Law limits the FIU’s ability to properly investigate crimes. Moreover, problems at all steps of the prosecutorial system – including investigations, presenting investigative results to prosecutors, the language of investigative results, and the capacity of prosecutors themselves – also contribute to the lack of convictions. Prosecutors claim they cannot understand the format or language of many of the FIU’s investigative results, and the 120-day time frame for prosecutors to investigate results is insufficient. Compounding the problem, many judges do not understand money laundering cases, and banks often delay providing information to judges and prosecutors. Convictions tend to be for lesser offenses such as tax evasion, which is an easier offense to prosecute successfully.

Informal remittance businesses remain unsupervised and vulnerable to money laundering. These businesses include travel agencies and small wire transfer businesses. The Gaming Sector is also highly vulnerable to money laundering. Sixty percent of the casino sector is considered informal. There are no restrictions on cash-to-cash, cash-to-check, or cash-to-wire transfer type transactions in casinos. Currently 700 establishments are licensed and 70,000 slot machines operate in Peru.

The GOP has not yet specifically and fully established terrorist financing as a crime under Peruvian legislation in a manner that would conform to international standards. However, under Decree Law 25.475, any form of collaboration with terrorism, including economic collaboration, is criminalized. It is not unusual for the FIU to observe an enterprise believed to be related to an international terrorist entity attempt to transfer money from Europe through Peru and then on to other destinations. There are several bills pending in the Peruvian Congress concerning the definition of the crime of terrorist financing.

In November 2010, Peru signed a memorandum of understanding between its FIU and the U.S. Financial Crimes Enforcement Network concerning cooperation in the exchange of information related to money laundering and terrorist financing.

Philippines

The Republic of the Philippines is not a regional financial center. Despite its developed financial system, the Philippines is still a heavily cash-based economy, with substantial remittances from its large expatriate community. Nonetheless, money launderers generally use formal financial institutions to conceal proceeds of crime, and the weak national ID system makes implementing a robust “know your customer” system difficult.

The principle sources of criminal proceeds are human and drug trafficking, official corruption, and investment scams. The Philippines’ geographic position makes it attractive to human and narcotics traffickers; and relatively open sea borders complicate enforcement of currency controls. The Philippines continues to experience an increase in foreign organized criminal activity from China, Hong Kong, and Taiwan. Insurgency groups operating in the Philippines partially fund their activities through local crime and the trafficking of narcotics and arms, and engage in money laundering through ties to organized crime. Smuggling, including bulk cash smuggling, continues to be a problem.

There are free trade zones and four offshore banking units (OBUs). The Central Bank exercises regulatory supervision over OBUs and requires them to meet reporting provisions and other banking rules and regulations.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, quasi banks, trust entities, and all other institutions and their subsidiaries/affiliates supervised/regulated by the Philippine Central Bank; insurance and pre-need companies; securities dealers, brokers/sales representatives, investment houses, mutual funds, and other entities managing securities as agents/consultants; foreign exchange dealers, money changers, remittance/transfer agents; and, entities dealing in valuable objects, currency, financial derivatives, cash substitutes, and similar monetary instruments

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, quasi banks, trust entities, and all other institutions and their subsidiaries/affiliates supervised/regulated by the Philippine Central Bank; insurance and pre-need companies; securities dealers, brokers/sales representatives, investment houses, mutual funds, and other entities managing securities as agents/consultants; foreign exchange dealers, money changers, remittance/transfer agents; and, entities dealing in valuable objects, currency, financial derivatives, cash substitutes, and similar monetary instruments

Number of STRs received and time frame: 6,298 (January 1-November 30, 2010)

Number of CTRs received and time frame: 35,924,241 (January 1-November 30, 2010)

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 33 as of November 30, 2010

Convictions: One as of November 30, 2010

Assets forfeited: criminally: None civilly: approximately $20,592,909 as of November 30, 2010

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

The Philippines is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action Task Force (FATF)-style regional body. Its most recent evaluation can be found here: http://www.apgml.org/documents/docs/17/The%20Philippines%20DAR%20-%20Final%20%20210809.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Philippines’ financial intelligence unit (FIU) investigations are severely constrained by limited authority to access bank information. Except in instances of serious offenses such as kidnapping for ransom, drugs and terrorism-related activities, the FIU is required to secure a court order to examine bank deposit accounts related to unlawful activities enumerated in the Anti-Money Laundering Act. In addition, a Supreme Court ruling prevents ex parte inquiry into bank accounts. The FIU can, however, seek an ex parte freeze order from the Court of Appeals before seeking authorization to inquire into bank deposits. The FIU also must obtain a court order to freeze assets, including those of terrorists and terrorist organizations placed on the UN 1267 Sanctions Committee’s consolidated list and the lists of foreign governments. This requirement is inconsistent with the international standard, which calls for the preventative freezing of terrorist assets “without delay” from the time of designation. The Government of the Philippines (GOP) should enhance the FIU’s access to financial records, and ensure it can rapidly freeze terrorist assets.

Terrorist financing is not a stand-alone offense under Philippine law and therefore not a predicate crime under the Anti-Money Laundering Act. A person who finances the commission of terrorism may be prosecuted as a terrorist either as a principal by inducement pursuant to Article 17 of the Revised Penal Code or as an accomplice pursuant to Section 5 of the Human Security Act. However, this approach requires a terrorist act to have occurred and does not encompass general financial support to terrorist entities for other purposes (recruiting, training, social welfare projects, etc.). The GOP should criminalize terrorist financing as a stand-alone offense, and enhance training on its connection to money laundering.

The GOP has cooperated with the USG to share assets. However, the GOP should formalize asset sharing arrangements, and clearly designate which agencies have authority over this process.

Poland

Poland lies directly along one of the main routes used by narcotics traffickers and organized crime groups between the former Soviet Union republics and Western Europe. According to Polish government estimates, narcotics trafficking, organized crime activity, auto theft, smuggling, extortion, counterfeiting, burglary, and other crimes generate criminal proceeds in the range of $3 - $5 billion each year. According to the Government of Poland (GOP), evasion of customs duties and taxes is the largest source of illegal income. Fuel smuggling, by which local companies and organized crime groups seek to avoid excise taxes by forging gasoline delivery documents, is a major source of laundered proceeds. Money laundering through trade in scrap metal and recyclable material is a growing trend, as is the increasing activity of organized crime in the financial services area (internet banking, credit cards and electronic systems for money transfers). There are a growing number of cases involving entities located in tax haven countries. It is also believed that some money laundered in Poland originates in Russia or other countries of the former Soviet Union. The GOP estimates the gray economy, used primarily for tax evasion, may exceed 15 percent of Poland’s gross domestic product (GDP) for 2010. The GOP estimates the black economy comprises only one percent of GDP. Poland is not considered a regional financial center, nor is it considered a particularly important international destination for money laundering. The GOP considers the nation’s banks, insurance companies, brokerage houses, and casinos to be important venues of money laundering. The Finance Ministry maintains the effectiveness of actions against money laundering involving transfer of money to tax havens is limited but improving with the increase in the number of cooperation agreements concluded with counterparts in such countries.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, financial leasing and factoring companies, currency exchanges, investment companies and funds, the National Depository for Securities, gambling institutions, insurance companies, the National Bank of Poland, the Polish Post, foreign legal entities carrying out brokerage activities, electronic money institutions, credit unions, notaries, foundations, auctioneers, pawnshops, dealers of high-value goods and precious metals and stones

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, financial leasing and factoring companies, currency exchanges, investment companies and funds, the National Depository for Securities, gambling institutions, insurance companies, the National Bank of Poland, the Polish Post, electronic money institutions, credit unions, notaries, foundations, real estate agents, lawyers, auctioneers, pawnshops, dealers of high-value goods and precious metals and stones

Number of STRs received and time frame: 15,357 in 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 74 from December 2009 - June 2010

Convictions: 21 from December 2009 – June 2010

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Poland is a member of MONEYVAL, a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Poland_en.asp

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Over the last few years, the Government of Poland has gone to great lengths to strengthen and harmonize its anti-money laundering/counter-terrorist financing (AML/CFT) legal and regulatory tools and institutions with international standards. The creation of the autonomous offense of terrorist financing was a commendable step forward. In 2010, cooperation among relevant authorities and institutions increased. However, work remains to ensure effective implementation. Poland should ensure promulgating regulations are fully effective. The GOP should promote additional capacity building in the private sector and continue to improve communication and coordination among the FIU and relevant law enforcement agencies. Police and customs authorities, in particular, should receive training on recognizing money laundering and terrorist financing methodologies, including trade-based money laundering and informal value transfer systems.

Portugal

Portugal is an entry point for narcotics transiting into Europe. According to officials of the Government of Portugal (GOP), most of the money laundered in Portugal is narcotics-related. Portugal’s long coastline, vast territorial waters, and close relationships with countries in Latin America and Africa make it a gateway country for Latin American cocaine and drugs coming to Europe from North Africa. Portuguese authorities have detected proceeds from smuggled commodities, particularly tobacco products, in the financial system. Authorities have also noted significant criminal proceeds from corruption, trafficking in works of art and cultural artifacts, extortion, embezzlement, tax offenses, and aiding or facilitating alien smuggling. Currency exchanges and real estate purchases are often used to launder criminal proceeds.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, credit institutions, and investment companies; financial leasing, factoring, and mutual guarantee companies; electronic money institutions; life insurance, pension fund management, and credit securitization companies; venture capital and venture capital funds management companies; collective investment entities; postal service entities; casinos and lotteries; property dealers; lawyers, accountants, and auditors; and dealers in high-value goods

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, credit institutions, and investment companies; life insurance, financial leasing, factoring, and mutual guarantee companies; electronic money institutions; pension fund management, credit securitization, venture capital, and venture capital funds management companies; collective investment entities; postal service entities; casinos and lotteries; property dealers; lawyers, accountants, and auditors; and traders in high-value goods

Number of STRs received and time frame: 8,470 in 2010

Number of CTRs received and time frame: Not applicable

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 20 in 2010

Convictions: 14 in 2010

Assets forfeited: criminally: $2,390,000 (2010) civilly: None

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Portugal is a member of the Financial Action Task Force (FATF). Its most recent mutual evaluation can be found here: http://www.fatf-gafi.org/infobycountry/0,3380,en_32250379_32236963_1_70732_43383847_1_1,00.html

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The general legal principle in Portugal is that only individuals are subject to criminal liability. The criminal code provides for criminal corporate liability for money laundering and for certain other crimes.

Portugal considered the imposition of a large currency transaction reporting requirement but opted not to establish such a program.

Qatar

Qatar has become an increasingly important Gulf banking and financial services center. Despite the growth of the banking sector and increasing options for financial services, Qatar still has a largely cash economy. Qatar has had low rates of crime, although crime rates have increased in recent years. There are several trends which make Qatar increasingly vulnerable to money laundering, including: a large number of expatriate laborers who send remittances to their home countries; the growth in trade and the financial sector’s expansion; liberalization and growth in the real estate sector; uneven corporate oversight; and Iran’s efforts to bypass sanctions through gulf economies.

The Government of Qatar (GOQ) signed a new AML/CFT law into force on April 30, 2010. The law criminalizes money laundering and terrorist financing in line with international standards. It also introduces a suspicious transaction reporting regime and requirements for customer due diligence and record-keeping. Revised, consistent regulations have been issued by all three of the main financial regulators in Qatar: the Qatar Central Bank, the Qatar Financial Markets Authority, and the Qatar Financial Center Regulatory Authority. All three regulators have begun to do onsite inspections to check compliance with the new law and regulations. However, significant work remains to fully implement new financial regulations, and there remain deficiencies with regard to terrorist financing.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

All serious crimes approach or list approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, real estate brokers, dealers of precious metals or stones, lawyers and notaries, trust funds and company service providers, and charities

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, real estate brokers, dealers of precious metals or stones, lawyers and notaries, trust funds and company service providers, and charities

Number of STRs received and time frame: 91 in 2009; 164 January – August 2010

Number of CTRs received and time frame: Not applicable

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Two since May 2010

Convictions: None in 2010

Assets forfeited: criminally: None in 2010 civilly: Not applicable

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: YES

Qatar is a member of the Middle East and North Africa Financial Action Task Force (MENAFATF) a FATF-style regional body. Its most recent mutual evaluation can be found here: http://www.menafatf.org/images/UploadFiles/QatarMER1.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

With the new AML/CFT law and accompanying regulations, Qatar has demonstrated its commitment to improving its AML/CFT regulatory regime. Despite the considerable efforts of Qatari authorities, some weaknesses remain. There is currently no threshold for reporting of bulk cash coming into or leaving Qatar. Additionally, trafficking in persons is not a predicate offense for money laundering. Significant work remains to implement the regulations and procedures resulting from the new law, and additional resources and training will be required to develop the necessary institutional capacity. The 2010 AML/CFT law requires financial institutions and designated non-financial businesses and professions to put in place appropriate risk management systems to determine if a customer or a beneficial owner is a politically exposed person (PEP), and if so, to obtain approval from senior management before establishing a business relationship with the customer; take all reasonable measures to establish the source of wealth and funds; and conduct ongoing monitoring of business relationships with PEPs. Each of the financial sector supervisors has issued revised regulations to financial institutions to complement the new AML/CFT Law.

The Qatar Financial Information Unit has issued new guidelines on STR reporting obligations and, in 2010, engaged in outreach and workshops with financial institutions. Despite these efforts, the level of STR filings by banks and brokers remains largely the same in the period 2008 – 2010, and there were no STRs disseminated to the Public Prosecutor’s Office (PPO) in 2010. The 2010 AML/CFT Law establishes an office for seizure and confiscation under the PPO; a department has now been established for this purpose. The Qatari authorities determined that confiscated assets would be sent to the general account of the Ministry of Finance. The AML/CFT law also establishes a framework for international cooperation, including provisions for cooperation, mutual legal assistance and extradition for ML/TF purposes. The GOQ exchanges information with the United States on a case-by-case basis.

The AML/CFT law includes a provision which authorizes the Terrorist Financing Committee, located in the Ministry of Interior, to designate by resolution those who finance terrorism, terrorists and terrorist organizations. No designations have yet been made and no terrorist financing STRs have been filed as of yearend 2010. There is a lack of procedure to implement obligations pursuant to UNSCR 1373. While the Public Prosecutor can issue an immediate order freezing the funds of any individuals or entities found on the UNSCR 1267 list, there is currently no equivalent procedure for dealing with reporting obligations under UNSCR 1373, although work is underway to address this.

Separately, under the AML/CFT law, the Governor of the Qatar Central Bank may freeze funds, balances or accounts for a period of ten business days where there is a suspicion they may be used for terrorist financing. He must then notify the PPO who may then extend the order. After conviction of a defendant for a predicate offense, ML offense or TF offense, the Court will issue an order for confiscation of the proceeds and instrumentalities of crime, and funds forming the object of the offense.

Regarding Iran-related terrorism and proliferation transactions, the Central Bank ordered financial institutions to freeze any assets of entities listed in UNSCRs 1737, 1747, and 1803, and prohibits them from carrying out any transactions with listed entities. However, Iran’s Bank Saderat - an entity of concern in UNSCR 1803 - was allowed to open a second branch in Doha in June 2008. GOQ officials have communicated that no additional branches or new correspondent relations will be permitted.

Romania

Romania’s geographical location makes it a natural transit country for trafficking in narcotics, arms, stolen vehicles and persons by transnational organized criminal elements. As a result, Romania is vulnerable to financial activities associated with such crimes, including money laundering. Tax fraud, fraudulent claims in consumer lending, and trans-border smuggling of counterfeit goods are additional types of financial crimes prevalent in Romania. Laundered money comes primarily from international crime syndicates who conduct their criminal activity in Romania, and subsequently launder their illicit proceeds through illegitimate front companies. Commercial transactions have been the main method of money laundering, primarily through use of shell and offshore companies; this principally involves fraudulent claims for value added tax (VAT) reimbursement.

Romania also has some of the highest rates of cybercrime and online credit card fraud in the world. Studies have found Romanian servers to be the second largest source of cybercrime transactions worldwide. Although a majority of their victims reside in the United States, Romanian cyber-criminals are increasingly targeting victims elsewhere in Europe, as well as in Romania itself. For 2010, Romania has not reported any cases of money laundering derived from drug trafficking or corruption, and only one case of money laundering where smuggling was the predicate offense.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF U.S. CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks; non-banking financial institutions; insurers and re-insurers; securities brokers; private pension funds; accounting, consulting, audit and law firms; notaries; and real estate brokers

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks; non-banking financial institutions; insurers and re-insurers; securities brokers; private pension funds; accounting, consulting, audit and law firms; notaries; and real estate brokers

Number of STRs received and time frame: 2,944 from January to November, 2010

Number of CTRs received and time frame: 38,269 from January to November, 2010

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 143 from January to October, 2010

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Romania is a member of MONEYVAL, a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.coe.int/t/dghl/monitoring/moneyval/Evaluations/round3/MONEYVAL%282008%2906Rep-ROM3_en.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of Romania (GOR) should continue its efforts to ensure that non-bank financial institutions are adequately supervised. Additionally, the knowledge level of this sector should be increased regarding its reporting and record keeping responsibilities and the identification of suspicious transactions. Romania’s FIU faces the continual challenge of limited financial, human, and technical resources. The GOR should continue to improve communication between reporting and monitoring entities, as well as between prosecutors and the FIU. Romania’s FIU received training in these areas during 2010, through the European Union’s Twinning program. The Twinning program produced a new on-line secure reporting system, as well as a manual on the risk-based approach and suspicious transaction indicators for reporting entities. The GOR also passed a National Strategy for the Prevention and Combat of Money Laundering and Terrorism Financing through the program.

In order to improve the rate of money laundering prosecutions and convictions, Romania should not become overly reliant on STRs and other forms of financial intelligence but rather empower law enforcement and customs authorities to detect and investigate money laundering at the street level and at borders and ports. Romania should improve implementation of existing procedures for the timely freezing, seizure, and forfeiture of criminal or terrorist-related assets. Romania should continue to make progress in combating corruption in government and commerce.

Russia

Russia is a regional financial center with a relatively small, but growing, number of depositors. The current administration aspires to establish the capital, Moscow, as an international financial center. However, money laundering (ML) and terrorist financing (TF) are prevalent in Russia, where there is a high level of organized crime and corruption. Domestic sources of laundered funds include organized crime, evasion of tax and customs duties, fraud, public corruption, and smuggling operations. Criminal elements from Russia and neighboring countries continue to use Russia’s financial system and foreign legal entities to launder money. Criminals invest and launder their proceeds in real estate and security instruments, or use them to buy luxury consumer goods. Russia has been a repeated victim of terrorism, and some TF schemes involve the misuse of alternative remittance networks by foreign and North Caucasian terrorist groups. Despite making progress in combating financial crimes, Russia remains vulnerable to such activities. Russia’s risk factors, such as the many large-scale financial transactions associated with its vast natural resources; the state’s major role in the economy; the country’s porous borders and its role as a geographic gateway between Europe and Asia; and chronic under-funding and lack of capacity of regulatory and law enforcement agencies, create an environment in which corruption and financial crimes flourish.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: YES

CRIMINALIZATION OF MONEY LAUNDERING:

All serious crimes approach or list approach to predicate crimes: All crimes

Legal persons covered: criminally: NO civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered Entities: Banks and credit institutions; Russia Post; payment acceptance and money transfer services; securities, insurance and leasing companies; investment and non-state pension funds; casinos and gambling outlets, dealers in precious metals and stones, real estate agents, and pawnshops

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks and credit institutions, securities markets, investment and pension funds, Russian Post, insurance sector, leasing companies, dealers in precious metals and stones, casinos, real estate agents, lawyers, notaries, and persons providing legal or accounting services

Number of STRs received and time frame: 3,147,937 - January 1 to October 1, 2010

Number of CTRs received and time frame: 5,030,727 - January 1 to October 1, 2010

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 50 - January 1, 2010 to October 1, 2010; 208 in 2009

Convictions: 110 in 2009

Assets forfeited: criminally: $9.6 million - 2009 civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Russia is a member of the Financial Action Task Force (FATF). It also is a member of two FATF-style regional bodies: the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) and the Eurasian Group on Combating Money Laundering and the Financing of Terrorism (EAG). Its most recent mutual evaluation can be found here: http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Russia_en.asp

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Through aggressive enactment and implementation of comprehensive anti-money laundering/combating the financing of terrorism (AML/CFT) legislation, Russia has established much of the legal and enforcement framework to deal with money laundering and terrorist financing. On July 23, 2010, Russia adopted amendments that improve legislation on AML/CFT. These amendments focus on three main areas: expanding AML/CFT coverage, clarifying legal definitions, and improving administrative oversight for enforcement of AML/CFT legislation. AML/CFT coverage has been expanded to subsidiary branches, representative offices, and affiliates of financial institutions located outside the Russian Federation. Furthermore, microfinance and short-term loans, which have grown significantly in Russia, are now subject to AML/CFT laws. In addition to expanding AML/CFT coverage, the new amendments clarify definitions critical to enforcement, such as the “beneficiary” of transactions. Other refined definitions in the July amendments include: “organization of internal control,” “conduct of internal control,” “customer,” “identification,” and “data recording.”

Amendments to the Code of Administrative Infringements improve regulatory oversight for violation of AML/CFT legislation. These amendments broaden the authority of the FIU (Rosfinmonitoring) and the Central Bank of Russia to conduct investigations of ML violations. Order 203, issued August 3 by Rosfinmonitoring, replaces Order 256 regarding the obligation to conduct staff training on AML issues. Directive 967-R sets forth requirements for all non-banking organizations concerning the development of ML internal control rules. The Code of Administrative Offenses now specifies five types of “ML safety” violations, instead of grouping all violations under one general offense.

It is too early to assess the impact of the 2010 amendments to the AML/CFT Law. Implementing regulations have not been issued for critical components of the new law, such as monitoring of affiliates’ operations outside the Russian Federation. Furthermore, it will take time for private sector entities to incorporate the clarified definitions into their AML/CFT practices. Reforms to the Code of Administrative Infringements do not address the full array of regulatory oversight challenges for enforcement of AML/CFT liability.

Russia takes an “all crimes” approach to money laundering predicate offenses, with the exception of six financial crimes, such as insider trading and stock market manipulation. To address these exceptions, Law 241-FZ was passed on October 30, 2009 to criminalize insider trading, stock market manipulation, and other similar crimes, but it does not take effect until 2014. Under Russian law, corporations cannot be held criminally liable; only a natural person is subject to criminal liability. Additionally, “tipping off” by bank directors and employees is not explicitly prohibited; the relevant section of the legislation only criminalizes revealing “measures taken against money laundering and terrorist financing”. Some new payment mechanisms, such as certain internet-based payment systems, are not covered by Russia’s AML/CFT controls.

Although Russia continues to establish and develop anti-corruption measures, corruption continues to be a problem. The Government of Russia should continue to aggressively pursue corruption; similarly, it should continue to pursue increased transparency in the financial sector and ensure that domestic PEPs are monitored with the same scrutiny as foreign PEPs.

Russia has successfully spread awareness of AML/CFT in its financial sector and has weeded out noncompliant financial institutions; however, significant discrepancies still remain between the standards of international and local domestic banks. Further attempts should be made to bring the AML efforts of all Russian banks to a more sophisticated level, including continued enhancement of the compliance training and certification process.

Russia hosts and funds the Secretariat of the EAG, and through this effort has contributed to improving the region’s AML/CFT capacity. Russia should continue to play a leadership role through sustained involvement in the regional and international bodies focusing on AML/CFT regime implementation.

Rwanda

Rwanda is not a major or offshore financial center. Rwanda has a cash-based economy, and a relatively unsophisticated financial system with limited use of electronic funds transfers or credit card transactions. In March 2009, Rwanda approved and published a comprehensive law on the “Prevention and Suppression of Money Laundering and Financing of Terrorism.” This law establishes the legislative framework to adhere to all relevant money laundering standards. However, this legislation is still in the process of being implemented and key action elements such as the establishment of a financial intelligence unit (FIU) are pending. In general, Rwandan financial enforcement authorities lack the training, resources and technical expertise to effectively investigate and enforce laws concerning money laundering and terrorist financing.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, non-bank financial institutions and designated non-financial businesses

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks and non-bank financial institutions

Number of STRs received and time frame: Two in 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 0 in 2010

Convictions: 0 in 2010

Assets forfeited: criminally: 0 civilly: 0

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Rwanda is not a member of a Financial Action Task Force-style regional body.

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Reportedly, the Central Bank distributes UN-designated lists of terrorists to bank and non-bank financial institutions; however, in practice, this is not always done thoroughly.

All foreign currency transactions in excess of $20,000 are reported to the Central Bank.

Rwanda’s Law 48/2008 “Prevention and Suppression of Money Laundering and Financing of Terrorism” published in March 2009, establishes a comprehensive legislative framework to adhere to all relevant money laundering standards. However, this legislation is still in the process of being implemented. The Government of Rwanda has much work to do in implementing the new rules and regulations. Training and heightening the awareness of money laundering methodologies and countermeasures in relevant departments and agencies involved in border enforcement and combating financial crimes is essential.

San Marino

In the last several years, the Republic of San Marino has been aggressively combating the image of a fiscal haven, improving its anti-money laundering regime, and increasing the transparency of its financial sector. While there is no significant market for illegal or smuggled goods in San Marino, money laundering occurs to some extent in both the formal and non-bank financial systems, unrelated to narcotics trafficking. Money laundering is mainly trade-based and carried out by foreigners to avoid higher taxes in their countries. However, the country has recently adopted stricter monitoring regulations and there appears to be a decrease overall in financial crimes. There are no free trade zones in San Marino.

Since September 2009, San Marino has been included in the OECD’s white list, and has signed Tax Information Exchange Agreements with over 30 countries (21 of which are OECD or EU member states).

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks and other financial institutions, the postal service, electronic money institutions, investment firms, insurance companies, lawyers, trust companies, accountants, auditors, gaming centers, money exchangers

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Financial institutions, insurance and re-insurance companies, and natural persons or entities whose professions or business activities involve the movement of money or securities, accountants and tax advisors, real estate agents, notaries, legal professionals, gaming centers and dealers in precious stones and metals

Number of STRs received and time frame: 296 in 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

San Marino is a member of The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL). Its most recent mutual evaluation report can be found here: http://www.coe.int/t/dghl/monitoring/moneyval/Countries/San%20Marino_en.asp

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

In the past, the lack of appropriate legislation and resources to enforce AML regulations made San Marino vulnerable to money laundering, especially from tax evasion and fraudulent financial activities such as false invoicing. In recent years, however, the country has made substantial improvements to meet international financial standards.

On July 20, 2010, San Marino became a party to the UN Convention against Transnational Organized Crime.

San Marino should continue to improve personnel training and increase resources with a view to fully implementing its laws and regulations. San Marino should become a party to the UN Convention against Corruption.

Saudi Arabia

The Kingdom of Saudi Arabia (KSA) is a growing financial center in the Gulf Region. Money laundering and terrorist financing are known to originate from Saudi criminal enterprises, private individuals, and Saudi-based charities. Based on media reports and discussions with Saudi officials, there is no indication of significant narcotics-related money laundering. Saudi bulk cash smuggling from individual donors and charities has reportedly been a major source of financing to extremist and terrorist groups over the past 25 years. With the advent of tighter bank regulations, funds are reportedly collected and illicitly transferred in cash, often via pilgrims performing Hajj and Umrah. Despite serious and effective efforts to counter the funding of terrorism originating from within its borders, entities in Saudi Arabia continue to serve as an important source of cash flowing to Sunni-based extremist groups. Saudi officials acknowledge difficulty in following the money trail with regard to illicit finance due to the preference for cash transactions in the country. The government does not regularly publish official criminal statistics.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: banks, money exchangers, real estate agents, dealers in precious metals and stones, lawyers and accountants

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: banks, insurance companies, exchange companies and institutions, investment and insurance companies, commercial companies, sole proprietorships, vocational activities

Number of STRs received and time frame: 2,968 (2004 – 2008)

Number of CTRs received and time frame: Not publically available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 237 (2004 – 2008)

Convictions: 162 (2004 – 2008)

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: YES

The Kingdom of Saudi Arabia is a member of the Middle East & North Africa Financial Action Task Force (MENAFATF), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.fatf-gafi.org/dataoecd/47/59/45727237.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Money service businesses operating outside of banks and licensed money changers are illegal in Saudi Arabia. To help counteract the appeal of these types of unlicensed money services particularly to many of the approximately eight million expatriates living in Saudi Arabia, Saudi banks have taken the initiative to create fast, efficient, high quality, and cost-effective fund transfer systems that have proven capable of attracting customers accustomed to using other non-sanctioned methods.

Saudi Arabia's Council of Senior Scholars (the Kingdom's highest judicial body and equivalent to the U.S. Supreme Court) issued an edict (fatwa) specifically defining acts of terrorism, specifying that committing such acts were illegal both in Muslim and non-Muslim countries, and declaring that financing terrorism, knowingly or unknowingly, was illegal and punishable under Islamic law. Fatwas from the Council of Senior Scholars constitute the most definitive interpretations of Shariah. Nevertheless, Saudi Arabia should enact a full statutory criminalization of terrorist financing and structure it as separate from the money laundering offense to clearly distinguish the money laundering and terrorist financing offenses.

Wide-sweeping counter-terrorism operations and resulting arrests over the past 12 months have demonstrated Saudi Arabia's ability to effectively disrupt planning and financing within the Kingdom. Contributions to charities are subject to strict guidelines, including that they must be in Saudi riyals; adhere to enhanced identification requirements; and payments may be made only by checks payable to the first beneficiary, which then must be deposited in a Saudi bank. Regulations also forbid charities from using ATMs and credit cards for charitable purposes, from making cash contributions, and from making money transfers outside of Saudi Arabia.

Saudi Arabia’s capacity to monitor compliance with and enforce its banking rules has improved and helped to stem the flow of illicit funds through Saudi financial institutions. The Saudis’ ability to stop bulk cash smuggling has also improved. However, cash illicitly collected and transferred via pilgrims on Hajj or Umrah continues to flow. Underground remittance systems such as hawala are also present in Saudi Arabia. The Kingdom should become a party to the UN Convention against Corruption.

Senegal

A regional financial center with a largely cash-based economy, Senegal is vulnerable to money laundering. Reportedly, most money laundering involves domestically generated proceeds from corruption and embezzlement. Also of concern are organized crime figures that launder and invest their personal and their organizations’ proceeds from the growing West Africa narcotics trade. There is also evidence of increasing criminal activity by foreigners, such as narcotics trafficking by Latin American groups and trafficking in persons involving Pakistanis.

Dakar’s active real estate market is largely financed by cash. Property ownership and transfer are not transparent. The continued building boom and high property prices suggest there is an increasing amount of funds with uncertain origin circulating in Senegal. The growing presence of hawala and other informal cash transfer networks and the increasing numbers of used imported vehicles suggest the existence of both value transfer via trade goods and illicit cash couriers. Trade-based money laundering (TBML) is centered in the region of Touba, a largely autonomous and unregulated free trade zone under the jurisdiction of the Mouride religious authority. Touba reportedly receives between $550 and $800 million per year in funds repatriated by networks of Senegalese traders and vendors abroad. Other areas of concern include the transportation of cash, gold and gems through Senegal’s airport and across its porous borders.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks; money exchanges; postal services; lawyers; securities and insurance brokers; auditors; real estate agents; dealers of high value goods such as art objects, precious stones, and metals; transporters of funds; casinos and gambling establishments, including state lotteries; travel agencies; non-governmental organizations, the Public Treasury

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks; money exchanges; postal services; lawyers; securities and insurance brokers; auditors; real estate agents; dealers of high value goods such as art objects, precious stones, and metals; transporters of funds; casinos and gambling establishments, including state lotteries; travel agencies; non-governmental organizations

Number of STRs received and time frame: 71 in 2009

Number of CTRs received and time frame: Not applicable

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Nine in 2009

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Senegal is a member of the Intergovernmental Action Group against Money Laundering in West Africa (GIABA), a Financial Action Task Force-style regional body. Its most recent mutual evaluation is available here: http://www.giaba.org/index.php?type=c&id=37&mod=2&men=2

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of Senegal (GOS) should continue to work with its partners in GIABA, the West African Economic and Monetary Union (WAEMU) and the Economic Community of West African States (ECOWAS) to develop comprehensive anti-money laundering/counter-terrorist financing (AML/CFT) regime. Senegal should continue to battle corruption and increase the frequency, transparency, and effectiveness of financial reviews and audits of financial institutions. Senegal should establish better uniform control of the cross-border flow of currency and other bearer-negotiable instruments for both residents and nonresidents. Senegalese law enforcement and customs authorities need to develop their expertise in identifying and investigating both traditional money laundering and money laundering within the informal economy as well as value transfer via trade goods. The Senegalese financial intelligence unit – CENTIF - should perform more outreach to obligated non-bank financial institutions to ensure a better understanding of the content and filing requirements for STRs. CENTIF, law enforcement, and Ministry of Justice authorities should work together to coordinate roles and responsibilities with regard to case investigation and assembly, and develop a deeper interagency understanding of money laundering and terrorist financing.

Serbia

Serbia is not considered a regional financial center. However, Serbia is situated on a major trade corridor known as the “Balkan route,” and commonly confronts narcotics trafficking; smuggling of persons, weapons and pirated goods; money laundering; and other criminal activities. While the bulk of narcotics seizures are of heroin, the Government of Serbia (GOS) advises that trafficking of cocaine originating in South American is on the rise and is expected to increase as organized crime groups restructure their operations. Corruption and organized crime also continue to be significant problems in Serbia.

Serbia has long been and continues to be a black market for smuggled goods. Illegal proceeds are generated from drug trafficking, corruption, tax evasion and organized crime, as well as other types of crimes. Proceeds from illegal activities are invested in all forms of real estate and, increasingly, into sports, particularly football (soccer) club operations. Some gray money flows to Cyprus, reportedly as payment for goods and services. GOS officials, however, believe these monetary flows have become less significant over the past few years. Banks in Macedonia, Hungary, Switzerland, Austria and China have emerged as destinations for laundered funds. Trade-based transactions, in the form of over- and under-invoicing, are a commonly used method for laundering money. There are reports that purchases of some private and state-owned companies have been linked to money laundering activities.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTION RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF U.S. CURRENCY, CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S., OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.? NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All crimes approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks; licensed money exchanges and remitters; investment and pension fund management companies; financial leasing providers; insurance companies, brokers, agents, and life insurance businesses; persons dealing with postal communications; broker-dealer companies; casinos and organizers of games of chance; auditors; real estate intermediaries; accountants; tax advisers; intermediaries in credit, lending, factoring and forfeiting; guarantors; and lawyers

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks; licensed money exchanges and remitters; investment and pension fund management companies; financial leasing providers; insurance companies, brokers, agents, and life insurance businesses; persons dealing with postal communications; broker-dealer companies; casinos and organizers of games of chance; auditors; real estate intermediaries; accountants; tax advisers; intermediaries in credit, lending, factoring and forfeiting; guarantors; and lawyers

Number of STRs received and time frame: 3,854 from January 1 to October 29, 2010

Number of CTRs received and time frame: 165,669 from January 1 to October 29, 2010

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 19, 2002 - 2010

Convictions: 13 convictions against 15 persons, of which six are final convictions against seven persons, 2002 - 2010

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Serbia is a member of MONEYVAL, a Financial Action Task Force-style regional body. Its most recent mutual evaluation can be found here: http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Serbia_en.asp

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Serbia has no law that establishes procedures for administrative freezing of assets. A Law on Restrictive Measures that will authorize use of this procedure is in the drafting stage at the Ministry of Foreign Affairs.

The GOS maintains bilateral agreements on mutual legal assistance with 31 countries, but not the United States. The FIU has signed information sharing agreements with 15 countries, and anticipates signing two more by the end of 2010.

The Government of Serbia (GOS) has taken a number of steps to improve its anti-money laundering/counter-terrorist financing (AML/CFT) regime in recent years. Regarding criminalization of terrorist financing, Serbia should insure that the terrorist financing offense is not linked to a specific terrorist act. Additionally, Serbia’s terrorist financing offense should include the entire range of activities listed in the annex to the Terrorist Financing Convention.

Serbia should continue to pursue measures to improve supervision of securities firms and other DNFBPs and to provide these institutions with sufficient guidance to ensure they understand and are able to comply with their responsibilities under the law. The GOS should adopt regulations and bylaws to help money service businesses and DNFBPs understand and implement all applicable requirements. The National Bank of Serbia and other supervisory bodies, as well as investigative agencies, the FIU, prosecutors, and judges require additional resources, in particular for building their professional capabilities. Law enforcement and prosecutors also need to make increased use of criminal money-laundering charges.

Seychelles

Seychelles is a not a major financial center. The Seychellois authorities consider drug trafficking, parallel market operations, theft and fraud as the major sources of illegal proceeds. Seychelles has been negatively affected by piracy off the coast of Somalia.

Seychelles is a consumer country for narcotics. To diversify its economy beyond tourism and fisheries, the Government of Seychelles (GOS) developed an offshore financial sector to increase foreign exchange earnings, and actively markets itself as an offshore financial and business center that allows the registration of nonresident business companies. These activities make the country vulnerable to money laundering. In its 2007-2017 Strategic Plan, the GOS proposes to facilitate the further development of the financial services sector through active promotion of Seychelles as an offshore jurisdiction, with emphasis on international business companies (IBCs), mutual funds, special license companies, and insurance companies. The Foundations Act, passed in December 2009, provides for the establishment and operation of private foundations to add to Seychelles’ offshore product offerings. The Seychelles International Business Authority, which regulates the offshore financial sector, provides training in such areas as company and trust administration, international tax planning, compliance and anti-money laundering.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks (both domestic and offshore), credit unions, insurance companies, trust and company service providers, casinos, real estate agents, money exchangers, notaries, lawyers, accountants, and dealers in precious metals and stones

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks (both domestic and offshore), credit unions, insurance companies, trust and company service providers, casinos, real estate agents, money exchangers, notaries, lawyers, accountants, and dealers in precious metals and precious stones

Number of STRs received and time frame: 29 from January 1 to November 30, 2010

Number of CTRs received and time frame: 0

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 0

Convictions: 0

Assets forfeited: criminally: 0 civilly: Approximately $110,000 - January 1 to November 30, 2010

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: YES

The Government of Seychelles is a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), a Financial Action Task Force-style regional body. Its most recent evaluation can be found here: http://www.esaamlg.org/reports/view_me.php?id=189

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of Seychelles (GOS) should work to improve the implementation of its AML/CFT framework, including the analysis of STRs and the pursuit of investigations and prosecutions for money laundering and terrorist financing. Seychelles should continue to work with its FIU to ensure it has the training and resources needed for outreach, analysis and dissemination. The GOS should expand its anti-money laundering efforts by prohibiting bearer shares, anonymous accounts and accounts in fictitious names, and clarifying its law regarding the complete identification of beneficial owners. Additionally, it should mandate enhanced due diligence procedures for politically exposed persons. The GOS also should amend its AML laws to state explicitly that all offshore activity is regulated in the same manner and to the same degree as onshore. The GOS should also consider codifying the ability to freeze assets rather than issuing restraining orders, and develop a cross-border currency reporting requirement.

Sierra Leone

Sierra Leone has a cash-based economy and is not a regional financial center. Money laundering activities are pervasive in the diamond sector. Despite tighter regulation, monitoring, and enforcement, in some areas significant diamond smuggling and the laundering of diamonds still exists. Drug smuggling is also a problem in Sierra Leone. Real estate and car dealerships also are vulnerable to money laundering activities. Loose oversight of financial institutions, weak regulations, pervasive corruption, porous borders, and a widespread informal money exchange and remittance system contribute to an atmosphere conducive to money laundering.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: NO

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks; financial leasing firms; money and currency changers; credit card, travelers check and other financial instrument issuers; investment companies, insurance, merchant and investment banks, and securities and commodities dealers

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks; financial leasing firms; money and currency changers; credit card, travelers check and other financial instrument issuers; investment companies, insurance, merchant and investment banks, and securities and commodities dealers

Number of STRs received and time frame: Five from January – November 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Sierra Leone is a member of the Inter Governmental Action Group Against Money Laundering in West Africa (GIABA), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.giaba.org/index.php?type=c&id=50&mod=2&men=2

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Anti-money laundering activities are covered by the Anti-Money Laundering Act of 2005 (AMLA), as well as guidelines issued by the Bank of Sierra Leone’s Financial Intelligence Unit (FIU) that significantly enhance the AMLA’s provisions and carry legal weight. These guidelines have been incorporated into the draft of a new Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT) bill that has been approved by the Cabinet and is expected to be passed by Parliament and enacted into law in early 2011.

Although the Government of Sierra Leone (GOSL) has enacted anti-money laundering legislation, the GOSL needs to take action to ensure its AML regime is effectively implemented. The FIU lacks the capacity to effectively monitor, regulate, analyze and disseminate financial intelligence. The AMLA charges the Transnational Organised Crime Unit (TOCU) and the Attorney General’s Office with investigating reports made by the FIU. TOCU is authorized to undertake complete investigations and effect arrests. The Attorney General’s Office has limited mandate to investigate and arrest. The Sierra Leone Police, National Revenue Authority, and Anti-Corruption Commission have very limited abilities to investigate money laundering crimes; the Anti-Corruption Commission is attempting to create a financial forensics capacity in the near future. Limited resources hamper law enforcement efforts in all arenas. Lack of training in financial crimes is also a hindrance to successful investigations and prosecutions. The GOSL should continue its efforts to counter the smuggling of diamonds and narcotics, and regulate sectors which are vulnerable to money laundering. Sierra Leone should continue to take steps to combat corruption at all levels of commerce and government. The GOSL should ratify the UN Convention against Transnational Organized Crime.

Singapore

Singapore is a significant international financial and investment center as well as a major offshore financial center. The structural gaps in Singapore’s financial regulations make it vulnerable to money launderers, and its financial crimes enforcement should be strengthened. Stringent bank secrecy laws and the lack of routine currency reporting requirements make Singapore a potentially attractive destination for drug traffickers, transnational criminals, foreign corrupt officials, terrorist organizations and their supporters seeking to launder money or fund terrorist activities. Authorities have taken action against Jemaah Islamiyah and its members and have identified and frozen terrorist assets held in Singapore. Terrorist financing in general remains a risk.

As of December 2009, there were 38 offshore banks in operation, all foreign-owned. Singapore has increasingly become a center for offshore private banking and asset management. Total assets under management in Singapore increased 40 percent in 2009 to S$1.2 trillion (approximately $861 billion). Singapore does not permit shell banks.

Singapore has eight free trade zones (FTZs), six for seaborne cargo and two for airfreight, regulated under the Free Trade Zone Act. The FTZs may be used for storage, repackaging of import and export cargo, assembly and other manufacturing activities approved by the Director General of Customs in conjunction with the Ministry of Finance.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, financial institutions, finance companies, merchant banks, life insurers, brokers, securities dealers, investment advisors, futures brokers and advisors, trust companies, approved trustees, and money changers and remitters

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, auditors, financial advisors, capital market service licensees and exempt persons, finance companies, lawyers, notaries, merchant banks, life insurers, trust companies, approved trustees, real estate agents and money changers and remitters

Number of STRs received and time frame: 11,004 in 2009

Number of CTRs received and time frame: No information available. Reporting began in 2010.

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 23 in 2008

Convictions: 24 in 2008

Assets forfeited: criminally: $10,962,377 civilly: Not applicable

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Singapore is a member of the Financial Action Task Force (FATF) and the Asia/Pacific Group on Money Laundering, a FATF-style regional body. Its most recent mutual evaluation can be found here: http://www.fatf-gafi.org/dataoecd/36/42/40453164.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Singapore’s rigid bank secrecy is sometimes an impediment to effective international cooperation in financial crimes enforcement. Less rigid bank secrecy restrictions would enhance Singapore’s law enforcement cooperation in areas such as information sharing and conformance to international standards and best practices.

Singapore’s legal system generally provides for the investigation and prosecution of money laundering offenses. However, the implementation of these laws is uneven, particularly in prosecuting money laundering as a stand-alone offense, and investigating foreign-sourced cases. Singaporean police are fairly successful at identifying domestic predicate offenses, and include ancillary money laundering charges as appropriate. Singapore should more aggressively pursue domestic stand-alone money laundering offenses as well.

Singapore’s large, stable, and sophisticated financial center may be attractive as a conduit for laundering proceeds generated by foreign criminal activities, including official corruption. The Suspicious Transaction Reporting Office (STRO) and criminal investigators are encouraged to identify money laundering that originates from foreign predicate offenses, and use stand-alone money laundering charges to prosecute third-party offenders in Singapore.

Slovak Republic

Slovakia’s geographic, economic, and legal environments with respect to money laundering are not atypical of a changing Central European economy. Its geographic location makes it a transit and destination country for trafficking in drugs, people and counterfeit goods, especially along the 100 km border with Ukraine. The statistics on money laundering cases investigated by Slovak law enforcement authorities indicate the most frequent predicate offenses for money laundering are financial crimes and crimes against property. There is significant cross-border auto theft and value-added tax (VAT) fraud; and smuggling of cigarettes and alcohol because of the tax disparity between Ukraine and Slovakia. Banks (mostly Slovak subsidiaries of foreign banks) remain the most frequently used financial institutions for money laundering. Criminal activity, including money laundering is characterized by a high level of organized crime.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES: YES

Covered entities: Financial institutions, the Export-Import Bank of the Slovak Republic, credit institutions; insurance companies, pension asset management companies, foreign currency exchanges, gambling/gaming operators, bankruptcy administrators, accountants, tax advisors, real estate agents, postal operators, real estate intermediaries, corporations (foundations, non-profit organizations, non-investment fund or other special corporations managing and distributing funds)

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Financial institutions, the Export-Import Bank of the Slovak Republic, credit institutions; insurance companies, pension asset management companies, foreign currency exchanges, gambling/gaming operators, bankruptcy administrators, accountants, tax advisors, real estate agents, postal operators, real estate intermediaries, corporations (foundations, non-profit organizations, non-investment fund or other special corporations managing and distributing funds)

Number of STRs received and time frame: 2,470 in 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 35 through the end of 2010

Convictions: Six through the end of 2010

Assets forfeited: criminally: None civilly: None

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

The Slovak Republic is a member of MONEYVAL, a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation report can be found here: www.coe.int/t/dghl/monitoring/moneyval/Countries/Slovakia_en.asp

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Amendments to the Penal Code (Act No. 300/2005 Coll.) and Code of Criminal Procedure (Act No. 301/2005 Coll.) of 2010 include the introduction of the autonomous criminal offense of terrorist financing and corporate liability.

In 2010, Act No. 101/2010 Coll. on the Proof of Origin of Property was introduced and approved, effective January 1, 2011. This law introduces the tool of non-conviction based confiscation within civil procedures, and stipulates conditions and procedures for public authorities in forfeiture of property.

Slovakia should also provide capacity enhancing materials to non-financial businesses and professions and improve supervision of these entities to ensure they meet their obligations.

Slovenia

Slovenia is neither a regional financial center nor a major drug producer, but is a transit country for drugs moving via the Balkan route to Western Europe. The Government of Slovenia (GOS) is aware that Slovenia’s geographic position makes it an attractive potential transit country for drug smugglers, and it continues to pursue active counternarcotics policies. Other predicate offenses of concern include business and tax fraud.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, agricultural credit institutions, lawyers, money changers, notaries, gaming centers, securities dealers

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, agricultural credit institutions, lawyers, money changers, notaries, gaming centers, securities dealers

Number of STRs received and time frame: 184 during 2010

Number of CTRs received and time frame: 220 during 2010

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 35 -- January-June 2010

Convictions: Two -- January-June 2010

Assets forfeited: criminally: 1.5 million euros (approximately $1.92 million) – time frame not available civilly: 0

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Slovenia is a member of MONEYVAL, a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Slovenia_en.asp

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

There are no major deficiencies in key preventive standards. Weak supervision and lack of guidance to certain non-banking sectors have an impact on the effectiveness of the Government of Slovenia’s (GOS) anti-money laundering/counter-terrorist financing (AML/CFT) regime.

The GOS should continue to enhance its AML/CFT legislation and procedures as appropriate. The GOS should immobilize company bearer shares. Despite prohibiting the establishment of new anonymous accounts, Slovenia has not taken action against the 3,000 anonymous bank accounts in existence. The GOS should convert these anonymous accounts, given the risk they pose to Slovenia’s AML/CFT regime.

Solomon Islands

The Solomon Islands is not a regional financial or offshore center, and there are no free trade zones. It has a relatively stable banking system closely integrated with the financial systems of Australia and New Zealand. While the overall risk of money laundering and terrorist financing is very low because of the jurisdiction’s isolated geographic location, very small community (which precludes anonymity), unsophisticated financial and commercial sectors, and a strict foreign exchange regime, the Solomon Islands’ financial system is nonetheless highly vulnerable to abuse due to a severe lack of capacity and oversight coupled with a weak culture of compliance.

High-level public corruption is the main source of illicit proceeds, primarily involving tax crime, customs fraud, and extractive industries (illegal logging, fishing and mining). Money laundering is relatively unsophisticated. Reportedly, most illicit proceeds tend to stay within the jurisdiction and are converted into high-value consumer goods (e.g., cars and electronics). The small proportion of cross-border money laundering tends to involve small, high volume transactions, although larger corruption payments are sometimes also placed in offshore bank accounts.

The Solomon Islands has a low threat of both international and domestic terrorism and terrorist financing. However, officials are evaluating domestic terrorist financing risks in light of violent ethnic conflict in 2000 and rioting in April 2006. Authorities note that many of the participants’ actions in these events would now be considered terrorism offenses under the Counter-Terrorism Act of 2009.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, credit or lending services, currency exchangers, remittance services, insurers and insurance intermediaries, securities dealers, futures brokers, and trustees and managers of unit trusts

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, credit or lending services, currency exchangers, remittance services, insurers and insurance intermediaries, securities dealers, futures brokers, and trustees and managers of unit trusts

Number of STRs received and time frame: 67 in 2010

Number of CTRs received and time frame: Not applicable

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 15 in 2010

Convictions: Four in 2010

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Solomon Islands is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation report can be found here: http://www.apgml.org/documents/docs/17/SOLOMON%20ISLANDS%20DAR_FINAL.pdf .

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of the Solomon Islands (GOSI) criminalizes money laundering and terrorist financing in a manner closely consistent with international standards, but enforcement is weak, largely because of a lack of financial investigation skills, training, resources, and clear enabling legislation.

Law enforcement authorities have extensive powers to confiscate proceeds and terrorist property and to provide mutual legal assistance, and Solomon Islands authorities are highly responsive to requests for assistance from other governments. However, the Solomon Islands does not yet have a freezing mechanism to implement UNSCRs 1267 and 1373. While the jurisdiction has imposed obligations on banks and other non-financial institutions to adopt some preventative AML/CFT measures, these obligations fall short of the requirements of international standards (especially on beneficial ownership and PEPs). Implementation and enforcement of preventive measures is negligible, due to severe capacity and resource constraints and lack of sanctioning powers. The GOSI should continue its work to implement AML/CFT requirements that conform to international standards. The Solomon Islands should become a party to the UN Convention against Transnational Organized Crime, the UN Convention against Corruption, and the 1988 UN Drug Convention, and should establish an effective regime to freeze terrorist assets.

High level corruption is a significant threat in the Solomon Islands. The problem is compounded because the weak culture of compliance often results in the failure to maintain and monitor records, and a disregard for any legal or regulatory regime. While some corrupt acts are limited to the exchange of benefits or nepotism and do not generate illicit proceeds, GOSI officials report the government has lost millions of dollars through corrupt government employees and has no ability to recover overpayments or enforce revenue collection.

Environmental crimes are increasing, and governmental authorities report losses in the range of hundreds of millions of dollars. There are growing concerns about the intersection of transnational crime and growing problems with wildlife smuggling and counterfeit currency, both of which may be used to finance illegal logging operations.

The Solomon Islands currently lacks a currency transaction reporting (CTR) regime, though draft legislation is being circulated. The GOSI should make passage and implementation of the CTR bill a priority.

Somalia

There is no recognized central government of Somalia. The Transitional Federal Government (TFG) controls only portions of the country's capital and remote pockets of some regions. The TFG is besieged by an insurgency that is led by international terrorist organization al-Shabaab. Many ministries exist in name only, or have non-functioning, mostly unpaid staff. There is no court system to speak of, and policing is rudimentary. The laws that exist - anti-money laundering (AML), counter-terror financing (CFT), or otherwise - are effectively unenforced given the security threats in Somalia and lack of capacity. Corruption is rampant. The financial system in Somalia operates almost completely outside of any system of oversight, either on the black market or via international money transfer companies/hawalas.

Due to its lack of a public regulatory system and its inaccessibility to international diplomats and law enforcement, little is known about money laundering in Somalia. No information is available on drug-related currency transactions channeling through Somali financial institutions. Because Somalia's narcotics trade is centered on khat, a controlled substance in much of the world but legal in Somalia, the proceeds are not illegal. Thus, it is not likely that khat money is laundered in Somalia. Most khat proceeds go back to khat transporters based outside Somalia in cash or via money transfer companies.

Pirates mostly launder their ransoms in northern Somalia, as well as perhaps in neighboring countries, the Middle East, or Europe. The ransoms are delivered through cash drops to pirates holding ships off Somalia's coast and divided among the pirates and those in their support networks. Officials in Somalia's northern region of Puntland reportedly benefit from pirate ransoms. They may facilitate ransom laundering or the transfer of ransom money to neighboring countries or globally. In this manner, public corruption significantly facilitates money laundering. Much of the ransom reportedly remains in cash. Anecdotal reports indicate that ransom money finances real estate, luxury goods, and businesses.

Smuggling is rampant. Somalia has one of the longest land borders and the longest coastline in Africa. The TFG and local officials control almost none of its borders, and goods flow into and out of Somalia with no TFG knowledge. There are occasional but unverified reports of U.S. dollar counterfeiting in al-Shabaab-controlled areas.

Somalia is a center for terrorism financing. Al-Shabaab is headquartered here and financed by contributions from terrorist financiers outside the region, including from the global Somali diaspora and business community. Some of the funds enter Somalia as cash, but a significant portion likely passes through hawalas. Al-Shabaab operations are also financed through extortion of private citizens and local businesses, revenue from seaports under their control, and to an unknown extent by diversion of humanitarian and development assistance.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: Not applicable

Legal persons covered: criminally: NO civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: NO

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: None

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: None

Number of STRs received and time frame: Not Applicable

Number of CTRs received and time frame: Not Applicable

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 0

Convictions: 0

Assets forfeited: criminally: 0 civilly: 0

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: NO

Somalia is a not a member of any Financial Action Task Force (FATF)-style regional body.

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Somalia has been without a functioning central government since 1991. There are no AML/CFT laws, and the financial regulations that do exist go unenforced given the lack of policing and investigative capacity and Somalia's insecurity. International standards, to the extent they are recognized, are self imposed in Somalia by hawalas and other financial entities that must meet international rules and regulations to do business elsewhere in the world. The lack of laws, regulatory bodies, and enforcement mechanisms to counter money laundering and financial crimes is likely due to a lack of capacity, and not a lack of political will. Obstacles to enacting AML/CFT laws include the TFG's lack of territorial control, threats to the government by the al-Shabaab insurgency, and lack of capacity and resources at all levels of government.

There were no arrests for money laundering in 2010. There was one interdiction of a suspected terrorist financier's couriering cash illegally into Somalia. However, interdictions such as this often result in an arrest, followed by indefinite detentions or releases given Somalia's inadequate judicial system. In one case, incoming counterfeit U.S. dollars were seized at Mogadishu International Airport. It is not clear what happened to the perpetrator.

There are no government entities charged with, or capable of tracking, seizing, or freezing illegal assets or terrorist funds. Somalia has no laws requiring forfeiture of laundered assets or of terrorist finances, and laws that could lend themselves to AML/CFT are not enforced.

The TFG has called on regional governments to help stem the flow of terrorist financing, including requesting that local governments trace, freeze, and seize funds and finances related to and supporting al-Shabaab. Somalia has cooperated with USG law enforcement on numerous occasions, most recently investigations concerning suspected terrorists and kidnapping, piracy and acts of terror committed inside and outside Somalia, but there has been no known assistance with regard to investigations involving financial crimes.

South Africa

South Africa’s position as the major financial center in the region, its relatively sophisticated banking and financial sector, and its large, cash-based market make it vulnerable to exploitation by transnational and domestic crime syndicates. The largest source of laundered funds in the country is proceeds from the narcotics trade. Fraud, theft, racketeering, corruption, currency speculation, poaching, theft of precious metals and minerals, small arms, human trafficking, stolen cars, and smuggling are also sources of laundered funds. Many criminal organizations are also involved in legitimate business operations. There is a significant black market for smuggled and stolen goods. In addition to criminal activity by South African nationals, observers note criminal activity by Nigerian, Pakistani, Andean and Indian drug traffickers, Chinese triads, Taiwanese groups, Lebanese trading syndicates, and the Russian mafia. There are few successful investigations and prosecutions.

South Africa is not an offshore financial center, nor does it have free trade zones. South Africa does operate Industrial Development Zones (IDZs). Imports and exports related to manufacturing or processing in the zones are duty free, provided that the finished product is exported. IDZs are located in Port Elizabeth, East London, Richards Bay, and Johannesburg International Airport. The South African Revenue Service monitors the customs control of these zones.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, credit institutions, post office banks, foreign exchange dealers, securities traders, entities that issue travelers checks, real estate agents, gambling institutions, gold dealers, attorneys, second hand car dealers, entities/people registered with the Johannesburg Stock Exchange, and money lenders

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, credit institutions, post office banks, foreign exchange dealers, securities traders, entities that issue travelers checks, real estate agents, gambling institutions, gold dealers, attorneys, second hand car dealers, entities/people registered with the Johannesburg Stock Exchange, and money lenders

Number of STRs received and time frame: 29,411 - April 2009 through March 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

South Africa is a member of the Financial Action Task Force (FATF) and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), a FATF-style regional body. Its most recent mutual evaluation can be found here: http://www.fatf-gafi.org/infobycountry/0,3380,en_32250379_32236963_1_70915_43383847_1_1,00.html

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

South Africa’s anti-money laundering regime has solid legislative backing, and generally imposes an affirmative responsibility upon financial institutions, businesses, and individuals to report suspicious transactions. However, while South Africa’s banking system is among the world’s most sophisticated, its relationship to the South African economy as a whole remains problematic for anti-money laundering purposes. There are gaps in enforcement of the reporting requirements, due in part to South Africa’s large informal economy and cash-oriented market. Law enforcement capacity is also considered to be lacking.

While money laundering is a specific offense under the South African penal code, it is not often charged as a stand-alone offense. Instead, prosecutors typically include money laundering as a secondary charge in conjunction with other offenses. Accordingly, South Africa does not generally keep separate statistics for money laundering-related prosecutions, convictions, or forfeited assets.

Spain

Spain is a major European center of money laundering activities as well as an important gateway for illicit narcotics entering Europe. Drug proceeds from other regions enter Spain as well, particularly proceeds from Afghan hashish from Morocco, cocaine entering Latin America, and, in significantly lower volume, heroin from Turkey and the Netherlands. Tax evasion in internal markets and the smuggling of goods along the coastline also continue to be sources of illicit funds in Spain. The smuggling of electronics and tobacco from Gibraltar remains an ongoing problem. Passengers traveling from Spain to Latin America reportedly smuggle sizeable sums of bulk cash. Colombian cartels allegedly use proceeds from drug sales in Spain to purchase goods in Asia that are subsequently sold legally in Colombia or at stores run by drug cartels in Europe. Credit card balances are paid in Spanish banks for charges made in Latin America, and money deposited in Spanish banks is withdrawn in Colombia through ATM networks.

An unknown percentage of drug trafficking proceeds are invested in Spanish real estate, particularly in the once-booming coastal areas in the south and east of the country, though less so since the speculative real estate bubble burst in 2008. Up to twenty percent of the 500 euro notes in use in Europe were reported to be in circulation in Spain during 2009, directly linked to the purchase of real estate to launder money. Efforts by Spain’s tax authority to deter fraudulent activity involving these large bank notes have kept the number of 500 euro notes at October 2008 levels (around 110 million notes).

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: YES

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on terrorism, which can be found at http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks; mutual savings associations; credit companies; insurance companies; financial advisers; brokerage and securities firms; pension fund managers; collective investment schemes; postal services; currency exchange outlets; individuals and unofficial financial institutions exchanging or transmitting money; realty agents; dealers in precious metals, stones, antiques and art; legal advisors and lawyers; accountants; auditors; notaries; and casinos

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks; mutual savings associations; credit companies; insurance companies; financial advisers; brokerage and securities firms; pension fund managers; collective investment schemes; postal services; currency exchange outlets; individuals and unofficial financial institutions exchanging or transmitting money; realty agents; dealers in precious metals, stones, antiques and art; legal advisors and lawyers; accountants; auditors; notaries; and casinos

Number of STRs received and time frame: 2,904 in 2008 (most recent available figures)

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Spain is a member of the Financial Action Task Force (FATF) and a cooperating and supporting nation to the Caribbean Financial Action Task Force, a FATF-style regional body. Its most recent mutual evaluation can be found here: http://www.fatf-gafi.org/dataoecd/52/3/37172019.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Spain has long been dedicated to fighting terrorist organizations, including ETA, GRAPO, and more recently, al-Qaida. Spanish law enforcement entities have identified several methods of terrorist financing: donations to finance nonprofit organizations (including ETA and Islamic groups); establishment of publishing companies that print and distribute books or periodicals for the purposes of propaganda, which then serve as a means for depositing funds obtained through kidnapping or extortion; fraudulent tax and financial assistance collections; the establishment of “cultural associations” used to facilitate the opening of accounts and provide a cover for terrorist financing activity; and alternative remittance system transfers.

Spanish authorities recognize the presence of alternative remittance systems. Informal non-bank outlets such as “locutorios” (communication centers that often offer wire transfer services) are used to move money in and out of Spain by making small international transfers for members of the immigrant community. Spanish regulators also note the presence of hawala networks in the Islamic community.

On April 29, 2010, Spain enacted Law 10/2010, on preventing money laundering and terrorist financing. The new law incorporates and enhances Law 19/1993 on preventing money laundering, and supersedes Law 12/2003, on preventing terrorist financing, which was never fully implemented. Law 10/2010 introduces a risk-based approach to preventing money laundering and terrorist financing and imposes stringent requirements on financial institutions as well as designated non-financial businesses and professionals (DNFBP). Additionally, implementation of Law 10/2010 will greatly enhance authorities’ capacity to combat terrorist financing by placing greater requirements, with stiffer penalties for non-compliance, on financial institutions and other businesses, and by strengthening monitoring and oversight. The new law entered into force immediately; however, implementing regulations will not be approved until 2011; until then, many of its provisions are not being implemented.

The Government of Spain should clarify whether its laws allow civil forfeiture. Spain should maintain and disseminate statistics on investigations, prosecutions, and civil asset forfeiture. More generally, the government needs to review the resources available for industry supervision and ensure that the FIU has the independence and resources it needs to effectively discharge its responsibilities.

Sri Lanka

Sri Lanka is neither a regional financial center nor a preferred center for money laundering. However, a large informal economy and significant number of cash-based transactions make Sri Lanka vulnerable to money laundering, and the government’s lack of a transparent tender mechanism for government projects invites corruption. Terrorists in Sri Lanka have exploited non-governmental and charitable organizations, and have used community building projects to conceal the proceeds of crime.

Sri Lanka is not an offshore center and has no free trade zones.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, registered finance companies, insurance companies, securities industry, casinos, real estate agents, dealers in precious metals and stones, lawyers, trusts and company service providers

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS (STRs):

Covered entities: Licensed commercial banks, licensed specialized banks, registered finance companies, stock brokerages, and insurance companies

Number of STRs received and time frame: 111 in 2009

Number of CTRs received and time frame: 1.6 million in 2009

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

Assets forfeited: criminally: Not available civilly: Not available

RECORDS EXCHANGE MECHANISM:

With the U.S.: NO

With other governments/jurisdictions: YES

Sri Lanka is a member of Asia/Pacific Group on Money Laundering (APG), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.apgml.org/documents/docs/17/Sri%20Lanka%20MER%20-%20Final%2010August06.pdf .

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

In February 2010, the Government of Sri Lanka provided a high-level written commitment and developed an action plan to address strategic deficiencies in its AML/CFT regime. As part of its AML/CFT efforts, Sri Lanka should strengthen the criminalization of money laundering and terrorist financing, and establish and implement procedures to identify and freeze terrorist assets. Sri Lanka should also enact disclosure protections, and criminalize tipping off in AML/CFT cases.

Efforts are underway to amend the AML/CFT laws to address technical and substantive deficiencies in the legal framework and strengthen the authority of the FIU and law enforcement authorities engaged in AML/CFT detection and suppression. The new legislative package will include a draft law to strengthen forfeiture provisions relating to the proceeds of crime or funds related to the financing of terror. Sri Lanka should focus on passing these laws, which has not been a governmental priority.

Although AML/CFT laws cover non-financial entities such as casinos, real estate agents, dealers in precious metals and stones, lawyers, and trusts or company service providers, no regulator has issued KYC or currency transaction reporting (CTR) policies covering these institutions. Sri Lanka should draft and implement KYC and CTR policies to cover these entities.

St. Kitts and Nevis

St. Kitts and Nevis is a federation composed of two islands in the Eastern Caribbean. The federation is at major risk for corruption and money laundering due to the high volume of narcotics trafficking activity through and around the island, and the presence of known traffickers on the islands. The growth of its offshore sector and an inadequately regulated economic citizenship program further contribute to the federation’s money laundering vulnerabilities.

St. Kitts uses the East Caribbean dollar and its monetary authority is the Eastern Caribbean Central Bank (ECCB). The ECCB has direct responsibility for regulating and supervising the offshore banks in Nevis, as it does for the entire domestic sector of St. Kitts and Nevis, and for making recommendations regarding approval of offshore banking licenses. By law, all offshore banking licensees are required to have a physical presence in the federation; shell banks are not permitted. Seven other island economies are also members of the ECCB: Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St Lucia, and St Vincent and the Grenadines. The existence of this common currency may raise the risk of money laundering, but there is little evidence that the EC dollar is a primary vehicle for money laundering.

As a federation, there is anti-money laundering (AML), counter-terrorist financing (CFT), and offshore legislation governing both St. Kitts and Nevis. However, each island has the authority to organize its own financial structure. With most of the offshore financial activity concentrated in Nevis, it has independently developed its own offshore legislation. St. Kitts had licensed approximately 36 corporate service providers, three trust providers, 116 captive insurance companies and over 2100 companies and foundations. By contrast, Nevis had over 11,000 international business companies, 4,200 limited liability companies, over 1,000 trusts and over 110 insurance companies.

The Ministry of Finance oversees St. Kitts and Nevis’ Citizenship by Investment Program. An individual may qualify for citizenship with a $350,000 minimum investment in real estate. In addition, the Government of St. Kitts and Nevis (GOSKN) created the Sugar Industry Diversification Foundation (SIDF), after the closure of the federation’s sugar industry, as a special approved project for the purposes of citizenship by investment. To be eligible, an applicant must make a contribution ranging from $200,000 to $400,000 (based on the number of the applicant’s dependents). The GOSKN requires applicants to make a source of funds declaration and provide evidence supporting the declaration. According to the GOSKN, the Ministry of Finance has established a Citizenship Processing Unit to manage the screening and application process.

Bearer shares are permitted provided that bearer share certificates are retained in the safe custody of authorized persons or financial institutions authorized by the Minister of Finance. Legislation requires certain identifying information to be maintained about bearer certificates, including the name and address of the bearer as well as the certificate’s beneficial owner. All authorized custodians are required by law to obtain proper documents on shareholders or beneficial owners before incorporating exempt or other offshore companies. This information is not publicly available but is available to the regulator and other authorized persons.

The St. Kitts and Nevis Gaming Board is responsible for ensuring compliance by casinos. Internet gaming entities must apply for a license as an IBC.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, agricultural credit institutions, money exchangers, insurance companies, auditors, accountants, notaries, gaming centers, pawn shops, issuers of payment cards and traveler’s checks, auto dealers, real estate brokers/agents, trustees, dealers of precious metals and stones, non-profit organizations, and securities dealers

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, agricultural credit institutions, money exchangers, insurance companies, auditors, accountants, notaries, gaming centers, pawn shops, issuers of payment cards and traveler’s checks, auto dealers, real estate brokers/agents, trustees, dealers of precious metals and stones, non-profit organizations, and securities dealers

Number of STRs received and time frame: 217, January to September 2010

Number of CTRs received and time frame: Not applicable

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: None

Convictions: None

Assets forfeited: criminally: None civilly: Not applicable

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

St. Kitts and Nevis is a member of the Caribbean Financial Action Task Force (CFATF), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.cfatf-gafic.org/downloadables/mer/St.Kitts_Nevis_3rd_Round_MER_(Final)_English.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The government has been slow to respond to requests for mutual legal assistance due to a lack of staff.

Bank secrecy laws, the allowance of anonymous accounts, the lack of transparency of beneficial ownership of legal entities, and weak regulatory framework concerning customer due diligence and cases of cross border seizures of cash and bearer instruments, make Nevis, in particular, a haven for criminals to conceal their proceeds. To address remaining vulnerabilities, the GOSKN should devote sufficient resources to effectively implement its AML/CFT regime, giving particular attention to its offshore financial sector and more rigorous customer due diligence and reporting requirements.

St. Kitts and Nevis should more precisely determine the exact number of Internet gaming companies present on the islands and provide the necessary oversight of these entities. The GOSKN needs to provide adequate resources and capacity to law enforcement agencies to effectively investigate money laundering cases. The government should consider implementing legislation to allow law enforcement authorities to postpone or waive the arrest of a suspected person and/or the seizure of cash so as to identify other persons involved in the offense. Additionally, the GOSKN should adopt or amend legislation, as necessary, to ensure its ability to freeze terrorist assets without delay is in accord with international standards and UN mandates.

The GOSKN should provide for close supervision of its economic citizenship programs or else consider their discontinuance. Additionally, Nevis should expand its supervision program to credit unions, local insurance companies, money service businesses and money transfer agencies. To strengthen its legal framework against money laundering, St. Kitts and Nevis should move expeditiously to become a party to the UN Convention against Corruption.

St. Lucia

St. Lucia has developed an offshore financial service center that is vulnerable to money laundering. Transshipment of narcotics (cocaine and marijuana), unregulated money remittance businesses, cash smuggling, and bank fraud, such as counterfeit U.S. checks and identity theft, are among the primary sources for laundered funds in St. Lucia. Trade and customs-based fraud and corruption also pose significant money laundering risks. The trade in gems and jewelry has also been used to launder funds and poses a considerable money laundering risk.

St. Lucia uses the East Caribbean dollar and its monetary authority is the Eastern Caribbean Central Bank (ECCB). Seven other island economies are also members of the ECCB: Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St Kitts and Nevis, and St Vincent and the Grenadines. The existence of this common currency may raise the risk of money laundering, but there is little evidence that the EC dollar is a primary vehicle for money laundering.

Currently, St. Lucia has seven offshore banks, two investment banks, 2,851 international business companies, 26 international insurance companies, four trust companies, three mutual fund administrators, and 15 registered agents. Shell companies are not permitted. The offshore sector is regulated by the Financial Sector Supervision Unit. The Government of St. Lucia (GOSL) also has one free trade zone (FTZ), managed by the St. Lucia Air and Sea Ports Authority (SLASPA) and located in the seaport of Vieux Fort, where investors may establish businesses and conduct trade and commerce within the FTZ or between the FTZ and foreign countries. Identification of companies and individuals who use the zone is required. There are no casinos or Internet gaming sites in St. Lucia.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Domestic and offshore banks, building societies, financial services providers, credit unions, trust companies, insurance companies, agricultural credit institutions, money exchangers, accountants, notaries, gaming centers, auto dealers and securities dealers

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Domestic and offshore banks, building societies, financial services providers, credit unions, trust companies, insurance companies, agricultural credit institutions, money exchangers, notaries, gaming centers, auto dealers and securities dealers

Number of STRs received and time frame: 83, January to November 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: None

Convictions: None

Assets forfeited: criminally: None civilly: Not applicable

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

St. Lucia is a member of the Caribbean Financial Action Task Force (CFATF), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.cfatf-gafic.org/downloadables/mer/Saint_Lucia_3rd_Round_MER_(Final)_English.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The failure to criminalize important elements of terrorist financing poses a potentially significant risk. In order to lessen its risks, St. Lucia should examine the list of predicate offenses for money laundering, and criminalize self-laundering and terrorist financing. Additionally, the GOSL should amend its legislation, as necessary, to explicitly prohibit “tipping off” and to provide safe harbor coverage against both civil and criminal liability for individuals and financial institutions who file STRs.

Money remitters should be brought under the regulatory framework, and St. Lucia should implement risk-based assessment procedures, implement enhanced due diligence for PEPs and consider requirements for reporting large monetary transactions to the FIU.

The GOSL should intensify its efforts to investigate, prosecute, and sentence money launderers and those involved in other financial crimes, and should permit extradition in cases of money laundering and terrorist financing. The lack of money laundering prosecutions or convictions suggests that the FIU is under-resourced. There also is a need for increased resources in the Customs Department to address the lax customs regime.

St. Vincent and the Grenadines

St. Vincent and the Grenadines (SVG) is a small but active offshore financial center with a relatively large number of international business companies (IBCs). The country remains vulnerable to money laundering and other financial crimes as a result of drug trafficking and its offshore financial sector. Money laundering is principally affiliated with the production and trafficking of marijuana in SVG, as well as the trafficking of other narcotics from South America. Money laundering occurs in various financial institutions such as domestic and offshore banks and money remitters. There has been a slight increase in fraud and the use of counterfeit instruments over the last year, such as tendering counterfeit checks or cash.

St. Vincent and the Grenadines uses the East Caribbean dollar and its monetary authority is the Eastern Caribbean Central Bank (ECCB). Seven other island economies are also members of the ECCB: Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St Lucia, and St Kitts and Nevis. The existence of this common currency may raise the risk of money laundering, but there is little evidence that the EC dollar is a primary vehicle for money laundering.

The offshore sector includes four offshore banks, 9,601 IBCs, eight offshore insurance companies, 103 mutual funds, 23 registered agents, and 119 international trusts. There are no offshore casinos, and no Internet gaming licenses have been issued. No physical presence is required for offshore sector entities and businesses, with the exception of offshore banks. Nominee directors are not mandatory except when an IBC is formed to carry on banking business. Bearer shares are permitted for IBCs but not for banks. The Government of St. Vincent and the Grenadines (GOSVG) requires registration and custody of bearer share certificates by a registered agent who must also keep a record of each bearer certificate issued or deposited in its custody. The Offshore Finance Inspector has the ability to access the name or title of a customer account and confidential information about a customer that is in possession of a license. There are no free trade zones in SVG.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institution: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, agricultural credit institutions, money exchangers, gaming centers, securities dealers, lawyers, notaries, accountants, company and trust services providers (registered agents and trustees), real estate agents, jewelers, lottery agents and car dealers

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Domestic and offshore banks, money remitters, insurance companies, credit unions, trust service providers, customs and notaries, gaming centers, securities dealers, lawyers, notaries, accountants, company and trust services providers (registered agents and trustees), real estate agents, jewelers, lottery agents and car dealers

Number of STRs received and time frame: 412, January to October 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Three

Convictions: None

Assets forfeited: criminally: None civilly: Not applicable

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

St. Vincent and the Grenadines is a member of the Caribbean Financial Action Task Force (CFATF), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.cfatf-gafic.org/downloadables/mer/Saint_Vincent_&_the_Grenadines_3rd_Round_MER_(Final)_English.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of St. Vincent and the Grenadines (GOSVG) has been cooperative with regard to international investigations, including a recent high-profile case involving an American financier.

The GOSVG should strengthen its AML/CFT regime by ensuring the FIU has access to all necessary information. It should also pursue proper reporting from designated non-financial businesses and professions (DNFBPs) and increased SARs from entities that seem to be under-reporting, including offshore banks, mutual funds, insurance companies and lawyers. Additional due diligence should be required for politically exposed persons (PEPs) and correspondent banking relationships. The GOSVG should insist the beneficial owners of IBCs are known and listed in a registry available to law enforcement, immobilize all bearer shares, and properly supervise and regulate all aspects of its offshore sector. The GOSVG should continue to provide training and devote resources to increase the cooperation among its regulatory, law enforcement, and FIU personnel in AML/CFT operations and investigations. Passage of civil forfeiture legislation and broader use of special investigative techniques should be pursued to strengthen the government’s AML efforts. St. Vincent and the Grenadines should also become a party to the UN Convention against Transnational Organized Crime and the UN Convention against Corruption.

Sudan

Sudan is the largest country in Africa. The Darfur conflict, the aftermath of two decades of civil war in the south, the lack of basic infrastructure in large areas, and a reliance by much of the population on subsistence agriculture ensure much of the population will remain at or below the poverty level for years. Sudan currently has limited access to international financial markets and institutions because of comprehensive U.S. economic sanctions. Traders and other legitimate business persons often carry large sums of bank notes because the electronic transfer of money outside of Sudan is not always possible. These large amounts of cash can complicate enforcement efforts.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: YES

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Commercial banks, exchange and brokerage shops, securities firms, insurance companies, gambling clubs, estate brokerages, mineral and gem traders, attorneys, and accountants

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Commercial banks, exchange and brokerage shops, securities firms, insurance companies, gambling clubs, estate brokerages, mineral and gem traders, attorneys, and accountants

Number of STRs received and time frame: 34 in 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: None in 2010

Convictions: Not Applicable

Assets forfeited: criminally: Not applicable civilly: Not applicable

RECORDS EXCHANGE MECHANISM:

With U.S.: NO

With other governments/jurisdictions: YES

Sudan is a member of the Middle East and North Africa Financial Action Task Force (MENAFATF), a Financial Action Task Force (FATF)-style regional body. A MENAFATF mutual evaluation on-site visit is scheduled for February 2011.

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Sudan’s Islamist links with international terrorist organizations led to Sudan's 1993 designation as a state sponsor of terrorism. In October 1997, the U.S. imposed comprehensive economic, trade, and financial sanctions against Sudan. In response to the Government of Sudan’s (GOS) continued complicity in violence occurring in Darfur, new economic sanctions were imposed in May 2007. The sanctions blocked assets of Sudanese citizens implicated in Darfur violence and sanctioned additional companies owned or controlled by the GOS.

In 2010, Sudan made strides in bringing the legislative basis for its anti-money laundering/counter-terrorist financing regime in line with international standards through passage of “The Money Laundering and Terrorism Financing Act of 2010” (MLFTA). It is unclear whether the implementing regulations for the MLFTA are enforceable. Going forward, Sudan must focus on full implementation of the new law and establishing and empowering effective enforcement institutions, particularly the financial intelligence unit. Sudan has been working to address its shortcomings, including (1) developing adequate procedures for identifying and freezing terrorist assets; (2) working toward a fully operational and effectively functioning financial intelligence unit, including applying to the Egmont Group for membership; (3) ensuring financial institutions are aware of and comply with their obligations to file suspicious transaction reports in relation to money laundering and terrorist financing and (4) beginning to implement a supervisory program for the regulators to ensure compliance with the provisions of the new law and regulations.

In two recent cases, individuals were detained on suspicion of money laundering after a large amount of currency was discovered in their luggage. Both were able to prove that the funds came from legitimate sources, although one case was turned over to the tax authorities and the other to customs for further investigation.

Suriname

Suriname is not a regional financial center. Narcotics-related money laundering is closely linked to transnational criminal activity related to the transshipment of cocaine to the United States, Europe, and Africa. Domestic drug trafficking organizations and organized crime, with links to international groups, are thought to control much of the money laundering proceeds, which are invested in casinos, real estate, and private sector businesses. Additionally, money laundering occurs as a result of poorly regulated private sector activities, such as casinos and car dealerships, the non-banking financial sector (including money exchange businesses or “cambios”), and through a variety of other means, including construction, the sale of gold purchased with illicit money, and the manipulation of commercial bank accounts.

Goods are smuggled into Suriname over the land/river borders with Guyana, Brazil, and French Guiana, as well as via vessels. Other goods are “smuggled” into Suriname via deceptive bills of lading, via the shipping ports. This is done mainly to avoid paying higher import duties. There is little evidence to suggest this is significantly funded by narcotics proceeds or other illicit proceeds. Contraband smuggling is not believed to generate funds that are laundered through the financial system.

Suriname is not an offshore financial center and has no free trade zones. There is a gold economy in the interior mining region of the country. Suriname has a significant informal economy; however, the majority of money laundering proceeds are not linked to this market but are moved through various corporate entities within the formal economy. Offshore banks and shell companies are not permitted in Suriname.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

“All serious crimes” approach or “list” approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: NO

CRIMINALIZATION OF TERRORIST FINANCING:

Ability to freeze terrorist assets without delay: NO

UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES

(Please refer to the Department of State’s Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/)

KNOW-YOUR-CUSTOMER RULES:

Covered entities: Banks, cambios, public notaries, lawyers, accountants, and insurance companies

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:

Covered entities: Banks, cambios, public notaries, lawyers, accountants, insurance companies, car dealerships, jewelry stores

Number of STRs received and time frame: 2,358 in 2010

Number of CTRs received and time frame: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Four in 2010

Convictions: Two in 2010

Assets forfeited: criminally: Not available civilly: None

RECORDS EXCHANGE MECHANISM:

With U.S.: YES

With other governments/jurisdictions: YES

Suriname is a member of the Caribbean Financial Action Task Force, a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.cfatf-gafic.org/mutual-evaluation-reports.html

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of Suriname (GOS) should assure all non-financial businesses and professions are subject to and fully implement customer identification and unusual transaction reporting procedures. Additionally, Suriname should ensure that those same entities are subject to adequate supervision and enforcement programs. The GOS should enact its pending legislation to enhance its asset seizure and forfeiture regime. Suriname should implement reforms to enhance the FIU’s capacity and authority. Additional efforts need to be made to ensure border enforcement. Customs and appropriate law enforcement need to investigate trade fraud and value transfer. The GOS should criminalize terrorist financing and become a party to the International Convention for the Suppression of the Financing of Terrorism and the UN Convention against Corruption.



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