Money Laundering • Hide • Disguise • TRUE ORIGIN OF THE CRIMINAL PROCEEDS.
Criminals…Law Enforcement Authorities • Law Enforcement Authorities • Reducing Crime • Criminals • Retain Funds • Recycle for Further Crimes
Predicate Offences (Unlawful Activities) • Drug trafficking • Counterfeiting • Smuggling • Theft • Embezzlement • Racketeering • Tax evasion • Kidnapping • Illegal arms sales • Bribery • Illegal trade of cultural property
Laundering Process • Placement • Layering • Integration
Placement Problems • 50,000$ of 10$ bills=2 feet high • A bill weighs aprrox. One gram • There are aprrox. 454 bills per pound • 50lbs of 10$ bills = 227.000$ • 50lbs of 20$ bills = 454.000$ • 50lbs of 50$ bills =1.135.000$ • 50lbs of 100$ bills =2.270.000$ • 50lbs cocaine = 600.000$ • 50lbs marijuana = 300.000$
ECONOMIC IMPACTS OFMONEY LAUNDERING • Misallocation Of Funds • Unpredictable Movements Of Funds • Reputation Risk • Undermines the Legitimate Private Sector • Economic Development issues • Loss of Tax Revenue • Loss of Control of Economic Policy • Other
Estimation Of Laundered Money • %2-5 World GNP Annually • 500 Billion to 1.5 Trillion USD (FATF) • Approaches • Issues • Hidden activities • Difference in Predicate offences • Black money>Laundered money
INTERNATIONAL EFFORTS • Financial Acton Task Force-1989 • The Vienna Conventinon-1988 • Basle Committee Statement of Principles-1988 • European Union Directive-1991 • IOSCO-1992 • Other
FAFT • 40 Recommendations • Country Evaluations • Typology Studies • Guidelines • Mutual Evaluation • Identifying Non-Cooperative Countries and Territories
Latest FATF Report About NCCOT’s • NCCOT’s • Jurisdictions Subject To The monitoring Process
Off Shore Centers • Tax Evasion • Evading Strict Regulation • Money Laundering • Confidentiality • Weak Supervision • Owning a bank, company
Some Figures Jurisdiction Banks Comp. Bahamas 305 47,040 Liechtenstein 17 75,000 Seychelles - 4,800 Nauru 400 - http://www.state.gov
A Brief History of Combating • 1972 Bank Secrecy Act- US • 1986 Money Laundering Control Act-US • Enactment Of Otter Countries Acts • Emerge of Financial Intelligent Units
Scope of The ACT’s • Criminalization of Laundering • Determining Predicate Offences • Establishing Of a FIU • AML Programs (Reporting, Identification, Recording etc of Transactions.. Etc) • Civil &Criminal Liabilities • Other (Information Exchange, Education..etc)
Basic FIU Model 1-Disclouseres transmitted to FIU 2-FIU receives additional information from law enforcement 3-Possible exchange with foreign counterpart FIU 4-After analysis, FIU provide case ti prosecutor for action
Egmont Group and Definition of FIU • EGMONT Group-1995 • Central national agency responsible for receiving, requesting, analyzing and disseminating to the competent authorities, disclosures of financial information, • concerning suspected proceeds of crime • in order to counter money laundering. • FIU’s of Some Countries
Security Markets • Industry Rely on Commissions • Due Diligence has taken Perception • International, Large, Liquid Nature • Availability of many Instruments and Institutions
Securities Market (Cont) • Layering Stage • Lack of Information • IOSCO Resolution-1992 • GAO survey of Securities Sector of USA
Patriot ACT –Brokers/Delaers • Before Patriot Act • Currency Transaction Reports • Funds Transfers and Transmittals • Suspicious Activity Reporting-Red Flags • Other
Patriot Act-Brokers/Dealers • SEC 312 Private Banking Account • SEC 313 Correspondent Account • SEC 314 Financial Institution Cooperation Provision • SEC 319 Domestic and Foreign Bank Records Production
Patriot Act-Brokers/Dealers • SEC 352 Anti Money Laundering Programs • SEC 356 Suspicious Activity Report by the Securities and futures Industry • SEC 256 Customer Identification and Verification
Typologies • Typologies from FATF and Other Sources
Conclusion • Reducing Crime • Since 1990’s Significant Steps has taken • Lack of Statistical Data • Isolation of NCCOT’s from Global Financial Community • New Fighting Means Focusing on Detecting
